ARP Reporting Instructions

Transcription

1 ARP Reporting Instructions An alternative retirement plan (ARP) is a definedcontribution plan offered to eligible public college and university faculty teaching in Ohio. ARPs are offered through each college or university by private vendors and offer an alternative to participation in STRS Ohio. Ohio law requires all public colleges and universities offer an ARP in addition to STRS Ohio. ARP vendors The chancellor of the Ohio Department of Higher Education has approved the following vendors that colleges and universities may use. AIG VALIC AXA Equitable Life Insurance Company Fidelity Investments Lincoln Financial Group MassMutual Financial Group Nationwide Life Insurance Company TIAA Voya Financial Contents ARP vendors...1 Eligibility...2 ARP contribution requirements...2 ARP mitigating contributions...2 History of the mitigating contribution rate ARP election process Election period Required election form ARP considerations when transferring between Ohio retirement systems ARP reporting process... Making adjustments or correcting the monthly ARP report Residual account balance...5 Getting help...5 Sample forms ARP Reporting Instructions Page 1

2 Eligibility Certain academic and administrative employees employed full time by a public college or university are able to choose a retirement plan other than STRS Ohio. Eligible employees include all new full-time academic and administrative employees, as well as full-time reemployed retirees employed by a college or university. ARP contribution requirements Ohio law requires employers to contribute to the ARP vendor a percentage of each ARP participant s compensation. The current required employer contribution rate is 9.53%. ARP mitigating contributions The employer is also required monthly to remit and report.7% of each ARP participant s compensation to STRS Ohio. The.7% employer contribution is referred to as the mitigating contribution rate. These payments go toward meeting the employer s proportionate share of STRS Ohio s unfunded accrued liability. This contribution requirement begins with an employee s ARP effective date. History of the mitigating contribution rate Five mitigating contribution rates have been in effect since the inception of ARPs. Below is a history of the mitigating contribution rate for ARP participants: Effective date Rate* ARP inception through June 30, % July 1, 1999, through Sept. 30, % Oct. 1, 2001, through June 30, % July 1, 2013, through June 30, % July 1, 2017, to present.7% *The ARP contribution rate is subject to review every five years per Ohio law. ARP election process Election period A full-time employee working in a position covered under STRS Ohio has 120 days from his or her starting date of employment to select a retirement plan. Once an employee elects to contribute to an ARP, the choice cannot be changed; the election is final, and the election period is closed. Employees who do not elect an ARP will automatically become members of STRS Ohio. New STRS Ohio members who do not choose an ARP within the 120-day election period have an additional 60 days (a total of 180 days from the first day of paid service) to select one of the three STRS Ohio retirement plans. Employees who do not select an STRS Ohio plan during this 180-day period will automatically join the Defined Benefit Plan and remain in it as long as they are an STRS Ohio member. An ARP election becomes irrevocable when the election is made and is effective back to the first day of employment. Example: You hire a new faculty member who begins employment on Sept. 1. The new employee elects an ARP on Nov. 12. This election is irrevocable on Nov. 12. The effective date of the election is the first date of employment, Sept. 1. This means that all earnings since Sept. 1 are subject to.7% mitigating contributions. An election to participate in STRS Ohio becomes irrevocable after the employee s 120-day election period expires. Example: You hire a new employee who begins employment on Sept. 1. The new employee elects STRS Ohio on Nov. 12. This election becomes irrevocable on Dec. 31, the 121st day after the first date of employment. ARP participants who terminate employment in an ARP-eligible position must remain in the ARP as long as there is no more than a one-year break in employment with their college or university. This rule affects both (1) ARP participants who move from a full-time to a part-time position, and (2) ARP participants whose break in service with their college or university is less than one year. ARP Reporting Instructions Page 2

3 Required election form An ARP election made by an eligible employee is irrevocable and is effective back to the first day of eligible employment. The employee must complete Sections 1, 2 and 3 of the Retirement Plan Election Form and return it to their employer (see Page 6). The employer completes the certification at the bottom of the form and forwards the form to STRS Ohio within 10 days. The employer can send election forms through secure file upload on the employer site, mail forms to the address below or fax forms to Please do not these forms. STRS Ohio Employer Reporting Dept. 275 E. Broad St. Columbus, OH Certified election forms should include the amount of employee and employer contributions already remitted to STRS Ohio via payroll reporting from the ARP effective date through the last date the employee was included on an STRS Ohio payroll report. STRS Ohio will forward contributions to the employee s selected ARP vendor within 30 days of receiving the properly certified election form. The contributions should not be included on the annual report. Any underpayment or overpayment to the vendor as a result of an employer s certification error will be the responsibility of the employer. ARP considerations when transferring between Ohio retirement systems If an employee has an active ARP election with another Ohio public retirement system and is now employed in an STRS Ohio-covered position, the employee must remain a participant in the ARP and is not eligible to make a new election with STRS Ohio. A new hire notification or reemployed retiree notification is not required for this employee; however, STRS Ohio requires you to provide the following information about the employee for our records: Name Social Security number Birth date Gender Effective date of employment in an STRS Ohiocovered position Certification that ARP contributions are the result of an active ARP election made with another Ohio public retirement system Please provide the required information to the address below or fax the information to STRS Ohio Employer Reporting Dept. 275 E. Broad St. Columbus, OH While a copy of the election form is not required, it can be used to provide us with the necessary information listed above. If you choose to send the election form, include the employee s date of employment in an STRS Ohio-covered position. Keep in mind that the mitigating contribution rate may be different if an employee s membership requires a change in retirement systems. For example, if an employee moves from an STRS Ohio-covered position to a position covered by Ohio Public Employees Retirement System (OPERS) or School Employees Retirement System (SERS) while continuously employed and contributing to an ARP, the employer remits the.7% mitigating contribution to STRS Ohio until the effective date of the change in the employee s position. After that time, the applicable contribution rate should be remitted to OPERS or SERS. Conversely, the.7% mitigating contribution should be remitted to STRS Ohio when continuously employed individuals contributing to an ARP move from an OPERS- or SERS-covered position to an STRS Ohio-covered position. ARP Reporting Instructions Page 3

4 ARP reporting process Mitigating contributions are due to STRS Ohio for as long as the employee is continuously employed in an STRS Ohio-covered position. An employer s.7% mitigating contribution for ARP participants is due to STRS Ohio for each month in which compensation is paid. Compensation for ARP mitigating contributions is the same definition used for reporting member and employer contributions. It generally includes all earnings, salary and wages paid to an individual during his or her employment. Please refer to the Compensation fact sheet on the employer website for more information. ARP reports listing mitigating contributions and payments for ARP participants are due to STRS Ohio by the 15th of each month for the prior month s payroll. This process includes the following steps: 1. Remit payment of your.7% mitigating contributions along with an online cash remittance (see Page 7). Note: A cash remittance form is not required if paying through STRS Ohio s direct debit online payment system. 2. Submit the ARP report containing mitigating contributions and earnings for each ARP participant using one of the following methods: An electronic file via secure file upload on the employer website (see Page 8 for the required record layout); or Online via Employer Self Service (ESS). 3. The ARP report and payment are reconciled at STRS Ohio. STRS Ohio will contact you if any errors are identified or if payments do not match the amounts listed on the report.. Contributions for compensation reported on the monthly ARP report should not appear on your payroll reports or annual report. Employers can only submit one ARP report per month. Do not include multiple records for an employee, or negative contributions or earnings on the monthly ARP report. Making adjustments or correcting the monthly ARP report If an error affects most or all of the participants on the current monthly ARP report, contact STRS Ohio and we can arrange for resubmission of your entire report. If an error only affects a small number of participants, create an ARP adjustment report via ESS on the employer website. Remit the appropriate additional payment, if necessary. If a credit is created, notify STRS Ohio about whether you would like a refund or prefer the credit be applied toward future obligations. Please note, unlike the monthly ARP report, ARP adjustment reports can contain negative contribution values. Corrections for prior months should be sent separately from your current monthly ARP report. ARP Reporting Instructions Page

5 Residual account balance If an individual previously had an account with STRS Ohio but then later becomes eligible for and chooses an ARP, he or she has two options relating to the residual account balance with STRS Ohio. Option 1 Leave contributions with STRS Ohio. Defined Benefit Plan Deposits continue to earn interest. Can purchase service credit if eligible. Can restore withdrawn credit. Entitled to benefits if age and service eligibility requirements are met. Can combine credit with OPERS and SERS upon retirement. Defined Contribution Plan Continue to accrue market gains and losses, and fees. Combined Plan Can purchase credit if eligible. Entitled to benefits if age and service eligibility requirements are met (DB portion). Continue to accrue market gains and losses (DC portion), and fees. Getting help STRS OHIO EMPLOYER REPORTING ARP election form reporting Doug Hatton Higher Education Account Representative hattond@strsoh.org ARP mitigating contribution reports Jim Peterman Employer Account Representative petermaj@strsoh.org STRS OHIO MEMBER SERVICES Shara Bailey Coordinator Higher Education Retirement Plans baileys@strsoh.org Option 2 Transfer STRS Ohio account to the ARP vendor. Transferred funds include all teaching contributions, purchased credit, gains, interest and matching funds, less losses/fees, if any. A faculty member cannot transfer funds if currently contributing to: STRS Ohio through another employer; or OPERS or SERS through another employer, from which the faculty member s STRS Ohio-covered employment has terminated. (This applies to STRS Ohio Defined Benefit Plan members only). To transfer funds, the member must complete the Application for Withdrawal Payment. The employer should complete and certify the corresponding employer certification ensuring the additional information box labeled College and university employers only is completed. Mail or fax the completed employer certification to STRS Ohio at the address or fax number listed on Page 3. ARP Reporting Instructions Page 5

6 RETIREMENT PLAN ELECTION FORM You will have 120 days from your first day of paid service to complete and return this election form to the Human Resources Department at your institution. If you want to become a member of an Ohio state retirement system, simply check the appropriate box in Section 2 below. If you want to participate in an alternative retirement plan (ARP) offered by a private plan provider, check the appropriate box in Section 2 below and select one of the plans. If you do not elect to participate in an ARP or do not return this form within the prescribed time period, you will be enrolled in the applicable state retirement system. Section 1 Biographical Information (Please print or type.) Name First Middle initial Last Address City State ZIP code Employee identification number If applicable Social Security no. Phone number Birth date Gender Hire date Are you receiving a retirement benefit from one of these Ohio retirement systems: HPRS, OPERS, OP&F, SERS or STRS Ohio? Yes No If Yes, which system? Effective date of retirement Area code Section 2 Election (Choose only one.) I elect to participate in the state retirement system for which I am eligible. OPERS* SERS STRS Ohio* I understand that I may not change my election to participate in the state retirement system after my election period expires and that my election will be irrevocable while I am continuously employed in a position at my current college or university. *Eligible employees may be able to participate in a defined contribution plan. Contact your applicable retirement system for more information about these plans and eligibility. I elect to participate in an ARP: (Select only one of the following ARP carriers. You must contact your chosen carrier to enroll.) AIG VALIC AXA Equitable Life Insurance Co. Fidelity Investments Voya Financial Lincoln Financial Group MassMutual Financial Group Nationwide Life Insurance Co. TIAA I understand that by electing to participate in an ARP I am irrevocably waiving my right to participate in the eligible state retirement system while I am continuously employed in a position at my college or university. I also understand that by electing to participate in an ARP offered by a private plan provider, I will be forever barred from claiming or purchasing service credit or participating in other plans offered by any state retirement system for the period that an election to participate in an ARP is effective. Section 3 Authorization I hereby certify the election chosen above in Section 2. I understand that I will be able to make an election to participate in another ARP or Ohio public retirement system if I cease to be continuously employed or am subsequently employed full time by another Ohio public institution of higher education in a position for which a retirement election is available. Employee s signature Date OFFICE OF HUMAN RESOURCES USE ONLY For ARP Elections Only Contributions made to the applicable state system during the election period to be forwarded to the ARP provider: Amount Employee contributions... Total employer contributions... Less supplemental contributions... Employer contributions to ARP provider... Date of last payroll report with employee contributions to applicable state system... Applicable state system OPERS SERS STRS Ohio Annual compensation Date election form received by college/university First date eligible to participate in an ARP Certified by Title College/University Employer code 20-87b, 9/16/0 ARP-3 Sample: Retirement Plan Election Form ARP Reporting Instructions Page 6

7 Cash Remittance Buckeye University Jane Doe 10/06/ ,000 Cash Remittance Buckeye University Oct. 6, 2017 $19,000 Oct. 6, 2017 $70,000 Oct. 6, 2017 $70,000 $9,000 Sample: Cash remittance screens ARP Reporting Instructions Page 7

8 ARP Report and Report Header Layouts The following layout is required to transmit ARP information via secure file upload on our website. Field No. 1 Field Name Employer 2 Fiscal Year 3 5 Fiscal Month Social Security Membership Type Code Description ARP Report Start Location Field Length Four-character employer number. 1 Alphanumeric The STRS Ohio fiscal year runs from July 1 through the following June 30. Fiscal year is reported as Two-digits representing the fiscal reporting month numbered in ascending order beginning with July (01) and ending with June (12). Format Valid Values STRS Ohio employer number 5 CCYY Fiscal year 9 2 MM Fiscal month Social Security number of employee Numeric Single alpha character identifies employee as an ARP participant Alphanumeric A=ARP participant 6 Last Name Last name of employee. No punctuation except dash [ ] Alphanumeric 7 First Name First name of employee. No punctuation except dash [ ] Alphanumeric 8 Middle Name Middle name of employee. No punctuation except dash [ ] Alphanumeric 9 Suffix Suffix of employee. No punctuation except dash [ ] Alphanumeric 10 Employer Contribution Amount 11 Earnings Field No. 1 Field Name Employer 2 Fiscal Year 3 Fiscal Month Eight-digit number containing employer s.7% monthly contribution based on employee s earnings. Monthly contributions of $6.25 would be reported as Nine-digit number containing employee s earnings paid during the fiscal reporting month. Monthly earnings of $1,37.36 would be reported as Description Total record length = 95 Report Header Start Location Field Length (2 assumed decimals) (2 assumed decimals) Four-character employer number. 1 Alphanumeric The STRS Ohio fiscal year runs from July 1 through the following June 30. Fiscal year is reported as Two-digits representing the fiscal reporting month numbered in ascending order beginning with July (01) and ending with June (12). Unsigned numeric, no commas Unsigned numeric, no commas Format Valid Values STRS Ohio employer number 5 CCYY Fiscal year 9 2 MM Fiscal month of ARP Records Total number of ARP records transmitted (leading zeros) Numeric 5 Total Control T to identify total control Alphanumeric T=Total control 6 Control Total Record Control total record Alphanumeric Control total record 7 Spaces Spaces 6 33 Alphanumeric Spaces 8 Zeros Zeros Zeros Total record length = , 7/17/2 Sample: ARP Report and Report Header Layouts , 12/17/6 ARP Reporting Instructions Page 8