DA Memo – June 29, 2009

Tier 2 Transition Reminders and Employer Web Portal Updates

Here are some items to help you prepare for changes that take effect July 1, 2009. We also have information to clarify certain remittance procedures and details about new Employer Web Portal features such as entering end dates and new screens for entering school employee certifications.

KPERS Non-School Employees in Their Year of Service

State and local employees hired July 1, 2008, through June 30, 2009, will become immediate members July 1, 2009. They will not need to finish a full “year of service” for membership. That means someone hired June 30, 2009, will only work one day before becoming a member while someone hired July 1, 2008, will work the full year.

• The employee will become a Tier 1 member and contribute 4 percent of compensation.

• Although employees will have a July 1, 2009 membership date, employers should not begin deducting KPERS contributions until the first payroll period that begins on or after July 1, 2009.

• Employers that have entered Report of Member Status (KPERS-1) forms on the web portal can now submit these K-1’s for posting.

• Employees with a “partial year of service” will be able to purchase service credit for that time. Employees can purchase the additional time at 4 percent of compensation regardless of age. This flat rate is available if purchased by lump sum within one year of membership date, or by payroll deduction if completed within 2 years of membership date. After that time, the purchase price could go up significantly as the employee’s age and salary increases.

• A fact sheet is available at www.kpers.org/employers_tier2transition.htm for you to give to employees hired during this transition year.

• If you are local non-school employer and did not offer First Day Coverage, these new members have until July 31, 2009 to apply for Optional Group Life Insurance. (Note: Employers must be affiliated to offer optional life insurance.)

Employees Beginning Employment on or After July 1, 2009

All employees who begin employment in a KPERS-covered position on or after July 1, 2009, will become immediate members on the first day of employment. The KPERS information system will automatically designate the proper Tier to place the employee.

• Employers should enter the enrollment on the employer web portal and begin payroll deductions.  

• Determining whether the employee is a Tier 1 or Tier 2 member involves many factors, including previous employment at another KPERS employer. The KPERS information system will be able to determine the correct Tier for many of your new employees upon submission of the KPERS-1. There will be times that KPERS staff will need additional information to make this Tier determination.

• To check the Tier or membership type assigned to a new employee, employers can check membership status in the Employee section on the Employer Web Portal.

• Employers should deduct 6 percent of compensation for Tier 2 members. The employer rate for Tier 2 members is the same as the employer rate for Tier 1 employees.

• If you have questions or need assistance regarding the Tier assignment of an employee you can call KPERS toll-free at 1-877-205-4916 or e-mail dberry@kpers.org. Please have your agency ID number ready when you call.

Entering End Dates on the Web Portal

We are requesting that employers enter end dates (termination dates) for employees through the KPERS employer web portal. Entering end dates at the time of termination will assist employers during annual reporting. It also provides critical information in determining the correct Tier membership designation if that employee is later employed by another KPERS employer. To enter the end date of the employee, follow these steps on the employer web portal.

1. Select "Employees" from the Site menu on the left.

2. Enter the search criteria and select the desired employee record. The system will display the selected employee information.

3. Click on "Submit End Date." The system will display the Employee End Date Maintenance screen.

4. Enter the end date, reason code and any necessary comments.

5. Click the “Save” button at the top, then click the “Submit” button if no errors exist.
   NOTE: If the information is saved but not submitted, you’ll need to go to the “End Date Request History” tab to submit the request.

End dates are collected and are posted to member accounts in a nightly batch process. This means that the end dates you submit using the End Date Maintenance screen will not be reflected in the selected employee record until the following day.

NOTE: If you submit an incorrect end date, you will not be able to submit an end date again for the same person. Contact KPERS to correct the error.

A short tutorial on submitting end dates is available at http://www.kpers.org/ewplatest.htm.

Remittances – Transition Requirements and Clarification of “KPERS-Covered Payroll”

KPERS will not request separate entries for remitting Tier 1 or Tier 2 employee and employer contributions. Employers are required to enter the total employee contributions and total employer contributions.

We are requesting employers to enter the KPERS-covered payroll. KPERS-covered payroll is the total payroll that was used as the base amount to calculate the KPERS employee and employer contributions.

Generally, KPERS-covered payroll is the gross compensation paid to employees that are KPERS members.

Do not include:

• Payroll paid to employees who are not KPERS members, such as temporary and seasonal employees
• Payroll of daily-call substitute teachers for School employers

Some compensation items for KPERS members that are not included:

• Severance pay of terminated employees
• Lump-sum termination payments for vacation and sick leave for members who were first employed in a KPERS-covered position after July 1, 1993
• Any other amounts that are not counted, according to Kansas law or regulation, in a member’s final average salary for the calculation of benefits
  

If you know the employee contributions for a payroll period, the KPERS-covered payroll would equal:

School Employers – New Requirements on Certifications

In July, school employers will be required to provide additional information when submitting employee certifications via the employer web portal. The following items will be required:

• The number of monthly installments that the member was paid (select 9, 10, or 12 months)
• If the member was paid in 12 monthly installments, were any lump sums paid before
  the retirement date?
• How was the employee paid in the previous school year? (select 9, 10, or 12 months)
• Was this employee in a “licensed position” as defined by the Kansas Department of Education?
• Position description

Questions?
Toll-free, 1-888-275-5737
In Topeka, 785-296-6166
E-mail, kpers@kpers.org