Applying the different California Public Employees’ Retirement System (“CalPERS”) rules related to Temporary Upgrade Pay, out-of-class appointments, and non-reportable extra-duty pays can be unnerving. For classic employees, compensation for appointments meeting the definition of Temporary Upgrade Pay are reportable to CalPERS and is included in pension benefits. For out-of-class appointments, the Government Code establishes a
This post was co-authored by Steve Berliner
By now every local agency that contracts with CalPERS is aware of the launch of the new reporting software known as My|CalPERS which will replace the former software, ACES. My|CalPERS is set to go live with local contracting agencies on September 19, 2011. While agency payroll staff are gaining technical training from CalPERS, agency administrators should take the time now to understand the impact and changes that will come with the My|CalPERS reporting system.
The My|CalPERS system is not only intended to be a more user-friendly and versatile reporting format, but it will also provide more information to CalPERS than was previously reported on the current reporting format. What this means for local contracting agencies is that it may now be easier for CalPERS to identify agencies who are out of compliance with the Public Employees’ Retirement Law (PERL) and its implementing regulations.
Some of reporting changes that will come with My|CalPERS include the following:
- Reporting hours worked by PERS retirees. Any employee of your agency who is also a PERS retired annuitant will be registered in My|CalPERS as any other new employee. Agencies will be required to regularly report hours worked by retired annuitants. When a retired annuitant nears 960 hours in the fiscal year, CalPERS is supposed to notify the agency. However, most retired annuitants may only be appointed to a position of “limited duration,” and in many instances, that appointment may not exceed 12 months. This new reporting format may allow CalPERS to more easily identify retired annuitants who illegally work beyond this limitation.
- Identifying employment position rather than simply coverage group. My|CalPERS will now require employers to identify the job into which the employee has been hired. Previously, employers simply identified employees by coverage group (e.g. “local safety,” “local miscellaneous”). The new system will provide employers with “Appointment IDs” for employees at the time of enrollment based on the employee’s position with the employer. This might allow CalPERS to more easily identify employees who are in the wrong membership classification, such as an employee who should be in the local safety classification, rather than local miscellaneous. It may also enable CalPERS to identify employers who are not complying with the new PERS regulations pertaining to payrate and special compensation.
- Reporting special compensation category and type. When reporting special compensation, CalPERS will now require employers to identify the category of special compensation (e.g. incentive, educational, premium, or special assignment pay, or statutory items), as well as special compensation type (the type of compensation within a category such as paramedic pay, longevity pay, patrol premium, etc.). This is not required under the current reporting system. Sometimes employers may mistakenly believe an item of pay is special compensation and report it as such. The new reporting system may make it easier for CalPERS to identify pay inappropriately reported as special compensation, when it in fact is not considered as such under the PERS regulations.
- Distinction is made between member contributions and employer contributions. Under the current reporting system, there is not a clear distinction made between member paid contributions and employer paid contributions. My|CalPERS will provide new fields allowing for distinguishing between pre-tax and after-tax contributions or deductions paid by the member, as well as pre-tax contribution amounts paid by the employer. This may allow CalPERS to more easily identify Employer Paid Member Contributions (“EPMC”) that are not consistent with PERL.
- Coming Soon: Reporting non-CalPERS member data. Employers will not be required to report non-member data when My|CalPERS first launches on September 19th. However, after the initial launch, PERS will begin to define requirements for collection of non-member data (e.g. part-time, seasonal, temporary, or intermittent employees, or independent contractors). When this eventually happens, this will make it easier for CalPERS to identify employees who should by members of PERS, but whom employers have inappropriately excluded from enrollment. It may also make it easier for CalPERS to identify independent contractors working for an agency who should be considered “common law employees,” and therefore, also members of CalPERS.