Thank you for taking time out of your busy schedule to attend our workshop. We have a packed agenda. Our primary focus will be directed to leaves of

Thank you for taking time out of your busy schedule to attend our workshop. We have a packed agenda. Our primary focus will be directed to leaves of absence and the creation of the proper Contract Records, the reporting of salary, contributions, and service units. 6

Our agenda for today is: First, Reviewing Housekeeping Items: Security Profiles Employer Contacts Member Demographic Files Second, Submitting Contract Records; the focus will be on the Work Statuses as it relates to Leaves of Absence and the associated Start and End Dates of the Contract Records Third, Determining how to report the Salary to PSERS Last, review a couple of items associated with common reporting issues related to Balance of Contract and Work History Adjustments 7

We have a few items we need to discuss before we start talking about Leaves of Absence. Let s look at some General Information that affects all of us. 8

As you entered the workshop, one of your employer representatives received a copy of your PSERS security profile. You must verify the information. If you have any employees that are no longer in a position that require PSERS security, it is important to remove their names and replace with the appropriate individual. It is important to have at least two Security Administrators. It is up to you to determine how many users you have to handle each function. We have the forms available for you to make changes. If you complete them before you leave, I will take them back to process the changes. Remember it is important to make these types of changes as soon as you have knowledge of the resource changes. Make sure your contact information is up to date. PSERS uses this information to contact you. If you need help updating the information, please let me know and I will walk you through the process. We ve discovered that some of our employers don t understand how our system abbreviates addresses. When an address is uploaded, the pension system checks for USPS standardization. The system abbreviates the last word that is not already abbreviated as it complies with USPS rules. <Speaker use white board to show example> Example: 23 North West Street. If you submit the information as shown, the pension system will abbreviate the word Street to St. If you submit the information as 23 North West St, the pension system will abbreviate the word West to W. The address will be posted to the school employees record as 23 North W St. PSERS is experiencing a large volume of return mail each year (12% of the mail sent). USPS is becoming more stringent on its 9

specifications because of the use of technology. It is PSERS preference that you do not abbreviate any of the words within the street address and let the pension system apply the USPS standardization. We recently discovered that there are still a few employers who are uploading the entire Member Demographic file each month. It is important that only changes should be submitted. If you need help switching over, please give me a call so we can review the formatting and uploading rules. 9

Let s turn our attention to Contract Records. You may recall, last year we focused on the list of Work Status Codes and their definitions. This year, we are going to review information as it relates to Leave Codes, the difference between the Codes that end in C (Contributing) versus N (Non Contributing). We are going to talk about what is implied when you submit the Leave Codes. We will discuss the actions you need to take when the leave is extended, the member returns to work, or the member terminates employment. 10

When your school administration grants a school employee a leave of absence, you need to determine a few things before you report any information to PSERS: 1. Is the leave an Approved Leave of Absence as defined by the Retirement Code? The Retirement Code defines an Approved Leave of Absence as a leave of absence for activated military service or which has been approved by the employer for sabbatical leave, service as an exchange teacher, service with a collective bargaining organization, or professional study. In addition to the Approved Leaves of Absence defined in the Code, we also consider Special Sick Leave as an Approved Leave of Absence. For more information about the Leaves of Absence, refer to Chapter 10 of the Employer Reference Manual. 2. Based on your determination of an Approved Leave of Absence, then you must determine the appropriate Work Status to be reported. 3. Based on the type of leave of absence, 1. are you required to remit Member Contributions and pay Employer Contributions during the leave or 2. do you, the employer, have the choice to make contributions upon the school employee s return to service? If the member and the employer are not making contributions during the leave of absence, the member may choose to make application to purchase the service credit after returning to work. If the member chooses to make application, it is the member s responsibility to submit the application. 4. Regardless of whether you are deducting contributions from the salary during the leave or the members applies to purchase the service after the leave, you are responsible to 11

report the full contract salary, not the salary the school employee is earning while on leave. You must also report the service units the school employee would have worked had the employee not been on a leave of absence. 11

First, we are going to look at the Codes ending in C. When you are reporting a contributing leave, the member may or may not be receiving salary from you, however, that is not the determining factor when selecting the Work Status to be reported to PSERS. When you report a Work Status ending in C, you are certifying to PSERS that: 1. The employee meets the requirement for the type of leave being reported. 2. You are agreeing to the financial obligation associated with the Employer Contributions. 3. The employee (Member) is agreeing to the financial obligation associated with the Member Contributions. 4. You are reporting the employee s Full Contract Salary and associated Service Units (Days/Hours) the member would have worked had they not been on a leave of absence; remember when reporting the salary, you must report the information in either the BASE and/or the Unpaid Retirement Covered Compensation (URCC) fields. The information reported in the BASE field should be the salary you are actually paying the member, not to exceed the Full Contract Salary; the URCC field represents the difference between the salary you are paying, if any, and the Full Contract Salary. Later in the presentation we will be discussing how to report the salary. 5. You are deducting the member contributions from the salary being paid; or collecting the member contributions directly from your school employee for the portion of the full contract salary not being paid to the member, but being reported to PSERS. In both cases, you are remitting the money to PSERS through your standard payment process. This is not a Purchase of Service. 6. You and the employee are agreeing to the leave of absence return to work requirements. If those requirements are not met, PSERS will be requesting additional 12

information from you and may reverse the reported information. The reversal will remove the salary, contributions, and service associated with the leave in full or in part based on the information you supply and the rules associated with that leave and the appropriate credits will be posted to your account. 7. There is no additional financial obligation upon the member s return, because you and the employee are paying contributions during the leave of absence. 12

Now, we are going to look at the Codes ending in N. When you are reporting a noncontributing leave, the member may or may not be receiving salary from you, however, that is not the determining factor when selecting the Work Status to be reported to PSERS. When you report a Work Status ending in N, you are informing PSERS that you are certifying: 1. The employee meets the requirement for the type of leave being reported. 2. You are agreeing to the financial obligation associated with the Employer Contributions if the member makes application and is approved by PSERS to purchase the service credit. 3. The employee (Member) is agreeing to the financial obligation associated with the Member Contributions if the member makes application and is approved by PSERS to purchase the service credit. 4. You are reporting the employee s Full Contract Salary and associated Service Units (Days/Hours) the member would have worked had they not been on a leave of absence; remember when reporting the salary, you must report the information in the WNC field. 5. You and the employee are agreeing to the leave of absence return to work requirements. If those requirements are not met, PSERS will not approve the purchase of service request and the member would be notified of this denial. 6. If the member wants to purchase the service, the member must submit the appropriate purchase of service application to receive credit for the leave of absence. Your signature on the application is a confirmation of your certification to the terms of the leave of absence and agreeing to pay any Employer Contributions associated with 13

the leave of absence. 13

If you report the Work Status of LEAVEN or WKCMPN, then you should not report any salary or service units while the employee is on a leave of absence. You are certifying that the employee does not meet the requirements for an Approved Leave of Absence or you are not willing to pay employer contributions to PSERS to satisfy your financial obligation associated with the leave which then means that this is not an approved leave of absence. You and the member will not have any financial obligation and the member will not receive any service credit for the leave of absence. The leave of absence may not be purchased at a later date by the member. If your school employee requests to purchase the leave of absence, even though you are not granting the request, you should complete the appropriate purchase of service application, and you should include a letter with the application explaining why you are completing the application and why you are not granting the purchase of the leave of absence; sign the letter, not the form. If you do not submit the letter of explanation, when PSERS receives the application, in most instances, we will contact you for an explanation why the Contract Record had a LEAVEN Work Status but you are certifying the purchase. PSERS has, on rare occasions, processed the purchase without contacting you thinking that you changed your initial decision and are accepting the financial obligation associated with the purchase of the leave of absence. 14

We understand how busy you are and we don t want to interrupt your daily routines, but if we have conflicting information, we need to ask the question. If based on the information available, PSERS is denying the leave of absence as an approved leave, a denial letter will be supplied to the member. Bottom line, if you report a LEAVEN or WKCMPN and subsequently submit a purchase of service form, PSERS will contact you for documentation to clarify the conflicting information. 14

We ve had an increasing volume of members who are being reported as ACTIVE when the member is actually on a leave of absence or being on an Approved Leave of Absence, but the member doesn t qualify under the Retirement Code s definition. Here is an example of a situation when you should report a LEAVEN Contract Record: An employee is suspended. The employer puts the school employee on a paid administrative leave of absence. A paid administrative leave does not meet the criteria for an approved leave of absence under the Retirement Code. A PSERS member may be granted other types of leaves of absence (or in this case, a disciplinary suspension), not authorized by the Retirement Code, but the leaves will not entitle the member to any credited service during the period of leave. As stated earlier in the presentation, the Retirement Code defines an Approved Leave of Absence as a leave of absence for activated military service or which has been approved by the employer for sabbatical leave, service as an exchange teacher, service with a collective bargaining organization, or professional study. If the member in question is on paid suspension, but not actually performing any work for the school employer during the paid suspension, the member is not entitled to receive retirement credit for the period of paid suspension/leave. <Speaker only use if being challenged> This matter is governed by the case of Hoerner v. PSERSB. In Hoerner, a school district terminated its superintendent in January but agreed 15

to pay and report to PSERS the salary of the member through the end of the school year. The court ruled that, under the Retirement Code, an employee can only receive retirement credit for the time period where the employee actually engaged in work for the school district and received regular remuneration for that work. 15

(Speaker Print B0965 before you leave so you can reference, if questioned) The Retirement Code and / or School Code stipulates the length of a leave of absence. PSERS has programmed the pension system to automatically end a leave Contract Record if the time period has exceeded its allotted time frame. If PSERS does not receive a Work Report or Work Report Adjustment record for a school employee for a period of 24 months, PSERS will create a LEAVEN Contract Record with a Start Date equal to the first day of the month following the last Work Report received, end date the ACTIVE Contract Record, and then end date the LEAVEN Contract Record, and create a Termination Contract Record for the end of the 24 month period. 16

Let s look at an example: Your school employee is approved for a special sick leave. After meeting all the requirements, you, the employer, and the school employee agree to continue making retirement contributions while the school employee is on the leave of absence. You submit the SSLSSC (Special Sick Leave School Sponsored Contributing Leave) Contract Record. The Start Date of the leave record is January 17, 2015. On the weekend following January 16, 2016, the pension administration system will check to see if the leave Contract Record has been end dated. If the record is not end dated, the system will end date the SSLSSC Contract Record with the date of January 16, 2016; The system will create a LEAVEN Contract Record with a Start Date of January 17, 2016. The change will prohibit you from reporting any additional salary, contributions, and service time for this school employee. The Special Sick Leave is limited to 12 months, whether the leave is contributing or non contributing. If the record is end dated, the system will not take any action. More information on Leaves of Absence can be found in Chapter 10 of the Employer Reference Manual. 17

When you are creating your school employee s leave of absence Contract Record, the Start Date of the record needs to be equal to the day the leave begins. When you need to end date the Leave of Absence, the system will automatically end date the record when you submit the next Contract Record. If you are submitting an ACTIVE Contract Record, the end date of the leave of absence Contract Record will be the day before the Start Date of the ACTIVE Contract Record. If you are submitting a termination Contract Record, the end date of the leave of absence Contract Record will be the same day as the Start Date Termination Contract Record. You do not need to end date the leave of absence Contract Record. Since our pension administration system automatically updates records based on the information you submit to PSERS, it is important to remember the proper order of operation and take action in chronological order. If you discover you have entered a record out of date order, please contact me so that I can help you fix the record. 18

Before we turn our attention to Reporting Salary, do we need to take a break. <If the audience wants to take a break, set a time for 15 minutes for the people to return> 19

The rules for reporting salary and service to PSERS while a school employee is on a leave of absence is based on the Retirement and School Code laws. I know that there are times when the employer makes accommodations for a school employee so that his/her income is more level throughout the school year. Unfortunately, reporting to PSERS when that happens add steps to the process. Let s look at the rules. 20

If an employee is granted a contributing leave of absence whether you are paying the employee a salary or not, then you need to report the employee s full contract salary to PSERS. The salary needs to be reported in either the Base, URCC, or a combination of both. In most cases, the school employee is earning less than the full contract salary while they are on a contributing leave. You must report the amount actually paid to the employee in the Base field. The difference between the amount paid to the full contract salary should be reported in the URCC field. <Speaker use the white board for the example> Example: The school employee s full contract salary is $50,000 and paid semi monthly. The employer approves a full year Sabbatical Leave. The employee is being paid $25,000 or $1,041.67 per pay. You will report $2,083.33 (2 pays in a month) in the Base field of the Work Report and $2,083.33 in the URCC field. The validations on the Work Report expect to see money reported in both the Base and the URCC fields. If values are missing in either of the fields, you will receive a fatal, or invalid, error. This is where the complications set in when your employee s paycheck differ from the expected leave of absence reporting rules. 21

<Speaker Print this slide for reference.> We are going to discuss the difference between reporting a information based on the actual pay versus the expected pay based on the leave of absence reporting rules. This first example is a based on a situation where the pay and the reporting match for a school employee granted a 6 month sabbatical leave. The SABTLC Contract Record will have a Start Date of January 17, 2015. The member will return to ACTIVE service on August 26, 2015. The employee s full contract salary is $50,000. The employee will be paid their standard pay from September through February, and the Sabbatical pay from March through August. 22

<Speaker Print this slide for reference.> <Speaker Talking points are on previous slide.> Ask audience to use their handouts to view Slide 23 and 24 simultaneously. 23

Again, this employee is earning $50,000 per school year. The SABTLC Contract Record would still have a Start Date of January 17, 2015. The member will return to ACTIVE service on August 26, 2015. The difference in this example is the employer grants the member the benefit of receiving 75% pay all year long instead of the full pay for 6 months and half pay for 6 months. The unfortunate situation is that a member cannot be reported as receiving URCC when the member is not on a Sabbatical leave. 24

The table on the left shows how the employee is being paid and how you think you would report the information to PSERS. Unfortunately, you must report the information as shown on the table on the right (Correct Reporting). With each Work Report you upload, you will be required to modify the values to match the Correct Reporting table. I have another simple example of altering the reporting to fit the validations: If you are faced with the fact that your employee is being paid 100% of the full contract salary during the contributing leave of absence, you will need to place $.01 in the URCC field so that validations are passed. Regardless, you need to report the number of days the employee would have work during the entire year, not the days actually worked. In this example, the employee was scheduled to worked 185 days, so 185 days would be reported to PSERS. You must also deduct retirement contributions from the member on the Full Contract Salary. In this example, the Retirement Contributions would be deducted based on the $50,000, not the $37,500 the member is actually receiving. 25

If your school employees meet the criteria for an Approved Leave of Absence, but you are not willing to pay employer contributions during the member s leave of absence, but you are willing to pay employer contributions, if applicable, upon the member s return to school service, then you would report the leave of absence as a non contributing leave regardless if you are paying the member or not. The member s Full Contract Salary must be reported in the Wages No Contributions (WNC) field on your Work Report. 26

This example is using the same information we discussed for the contributing leave of absence (e.g., the member is earning $50,000 per year; approved for a half year leave). You report the salary the member is earning during the portion of the year the member is working and report the salary the member would have been earning had the employee not been on a leave in the WNC field during the portion of the year the member is on leave. You should not report any money even if you are paying the member a portion of the salary. In this example, you are paying the member $1,923.07 per pay, but as you see, there is no salary being reported in the Base field during the leave period. When reporting the service, you need to report half the service with the WNC salary so that if the member chose to purchase the service, the service credits will be added during the purchase process. 27

The use of the LEAVEN Work Status is used if/when: the leave of absence does not meet the requirements for an Approved Leave of Absence as defined by the Retirement Code, or you, the employer, are not willing to pay any employer contributions during the leave of absence or when the member requests to purchase the service credit upon the member s return from the leave of absence, or Your school employee is delaying termination so that the member can attain a retirement milestone. Example: Member s last day of work is June 15, 2015 and hands in their resignation papers (or the board approves the resignation) on 8/15/2015. The employer enters a termination record with a Start Date 8/15/2015 instead of creating a LEAVEN with a Start Date of 6/16/2015 (no end date) and creating Termination record with a Start Date of 8/15/2015, which will end date the LEAVEN Contract Record with the same date. Use the WKCMPN Work Status: you, the employer, are not willing to pay any employer contributions during the leave of absence or when the member requests to purchase the service credit upon the member s return from the leave of absence, or if the Workers Comp Leave exceeds the 12 months permitted under the Work Statuses: 28

SSLWCC or SSLWCN. 28

There are a few of items not related to reporting leaves of absence I would like to discuss: 1. Balance of Contract Terminated Employee timing 2. Balance of Contract Work in the Summer 3. Work History Adjustments 29

We are going to transition our focus from leaves of absence to termination of employment. When you have an employee terminate employment, you need to notify PSERS by submitting a Termination Contract Record. The Termination Contract Record needs to include: the member s last day of work or last day of leave of absence, whether or not the member will be paid after the termination month, and whether or not you must report service after the termination month. The Start Date on the Termination Contract Record should represent the last day of work or the last day of the employee s leave of absence. The End Date should remain blank. Remember you don t need to End Date the current Contract Record (e.g., Active, leave, etc.) because the pension system will automatically End Date the employee s current Contract Record upon receipt of the Termination Contract Record. The Balance of Contract Flags are used to notify PSERS whether or not the member s information will be completely reported by the end of the termination month or after the termination month. There are three Balance of Contract Flags: 1. BOC Flag the BOC Flag is used for salary information. Set the flag to yes, if salary needs to be paid to the employee and reported to PSERS after the school employee s month of termination; otherwise, set it to no. 2. Outstanding Svc Flag the Outstanding Service Flag is used for service units information. Set the flag to yes, if days and/or hours need to be reported to PSERS after the school employee s month of termination; otherwise, set it to no. 30

3. BOC/Svc End Date the BOC/Svc End Date field is used to notify PSERS when reporting will be complete. The date should represent the last month the member (your school employee) will appear on a Work Report whether the information being reported is salary or service. The Balance of Contract flags are required when submitting a Termination or Deceased Contract Record. PSERS is experiencing a high volume of records where the Termination Contract Record states there will be balance of contract moneys or service, but the member does not appear on any additional Work Reports beyond the termination month. We are also experiencing the opposite condition; the member Contract Record states there is no balance of contract, but the member: doesn t have service reported for the fiscal year, doesn t have salary reported in the last month of work, has service reported after you informed us all information has been reported has salary reported after you informed us all information has been reported When a member terminates service, you need to make sure you know whether the information reported to PSERS will be completed by the end of the termination month or additional information needs to be reported after the termination month to make the record complete. If the information you report to PSERS conflicts with the information we have or expect to have, we will be required to contact you to reconcile the account. This delays your former employee s benefits, and more importantly, causes you to use resources to look up the information. None of us have extra resources and we don t want to bother you unnecessarily for the calculation of the benefit. During our benefit calculation process, we need to make adjustments to our member s data at least 25% of the time, not necessarily related to balance of contract information, but to correct the information reported, missing, or calculated. Remember do not submit a Termination Contract Record if your employee is ending one position and starting another. A termination record only needs to be reported when the member s services with you have come to completion. It has been brought to our attention that some software functionality is causing some of your problems. If your software program creates two records when your employee is terminating, i.e., an Active Contract Record with an End Date and the Termination Contract Record. It is important for you to delete the Active Contract Record with the End Date once you upload your file to our employer web to prevent incorrect data being posted to the member s account. 30

A few years ago, PSERS asked you if you had the ability to pay the employee s balance of contract in the same month of termination. Many of you stated you could and have adopted the practice. We appreciate those efforts. Some of you indicated that you would make it a point in future Collective Bargaining Agreements. PSERS wanted to give you an update to let you know for those employers who are able to pay any balance of contracts in the month of termination, it is working! PSERS is able to pay benefits to the member within 6 weeks of receiving the termination month Work Report; otherwise, it takes 6 weeks after the balance of contract Work Report. 31

PSERS is still experiencing employers who are tagging the incorrect fiscal year when reporting the Balance of Contract moneys. Remember the fiscal year should be tagged based on when the employee earned the money, not when it was paid to the employee. Example: Member is a teacher and is paid from September 2014 August 2015; the teacher also teaches summer school in the month of July 2015 through mid August 2015 In your Work Report for July 2015 Report 2015 in the Year field for the Balance of Contract (salary earned before June 30, 2015, but paid in July) information Report 2016 in the Year field for the Summer employment information In your Work Report August 2015 Report 2015 in the Year field for the Balance of Contract (salary earned before June 30, 2015, but paid in August) information Report 2016 in the Year field for the Summer employment information 32

When you need to correct salary information previously reported to PSERS for a full time member, determine if member contributions were withheld from the member s salary. If member contributions were withheld, then you should select the Reason Code of Payroll Correction. Your employer account will be charged the member and employer contributions accordingly. If member contributions were not withheld from the member s salary, then you should select the Reason Code of UNCRDT School Service. PSERS will calculate the due amount and send both you and the member a Statement of Amount Due. No charges will be posted to your account until the statement is sent. 33

If you need to correct Service Units (Days and/or Hours), you still need to determine if member contributions were withheld from the member s salary. If the member contributions were withheld, use the Service Adjustment Reason Code. If no member contributions were withheld from the member s salary, give me a call so that I can look at the account and inform you of the best way to correct the account. It is important that the days and/or hours are associated with the fact that no contributions were withheld from the salary. If you are correcting an adjustment, then it is important to correct the information using the same Reason Code. For example: if you used a Reason Code of UNCRDT School Service, then the correction needs to be reported under the same Reason Code. 34

We are always trying to improve our customer service. Last year we added another ESC Regional Representative to make PSERS more available to your needs. We ve redesigned our Employer Reference Manual. Based on a survey we conducted last year, many of you are not using the Employer Reference Manual. It was suggested that we develop focus groups. By show of hands, how many of you would be willing to participate in focus group discussions on topics like changing the reporting requirements for salaried employees, developing training programs for Business Office and Human Resource staff, and the redesign of the Employer Reference Manual. On the sign in sheet, there are columns to show your interest in participating. If you are interested in participating and you haven t already done so, please put a x in the column of the topic that most interests you. We will be selecting a small group to participate in the discussions. If we have enough interest, we will contact you later this summer to discuss the event. 35

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