Transcript MnSCU Retirement Plans
Retirement Nuts & Bolts and Pre-Tax Accounts
Training for Campus HR Retirement Administrators
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AGENDA
• • • • • • Limits/Contributions Rollovers/Information Sharing Agreements Reports-A-Palooza Intra-MnSCU Hires General Retirement Q & A Eide Bailly: HRA & MDEA
Retirement Plans: Contribution Limits
Gary Janikowski System Director, Personnel
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MnSCU Retirement Plans Affected by IRS Limits
• • • • MnSCU Tax-Sheltered Annuity (TSA) Program State’s Deferred Compensation Program Individual Retirement Account Plan (IRAP) Supplemental Retirement Plan (SRP)
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Contribution Limits
• • For all plans… IRS publishes limits annually State payroll system automatically stops deferrals once limits are reached
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Tax-Sheltered Annuity (TSA) Program 403(b)
• • • • Voluntary Plan MnSCU-sponsored No employer match Same investment funds as Individual Retirement Account Plan (IRAP) and Supplemental Retirement Plan (SRP)
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TSA Limit Summary Participant Age/YOS:
Under age 50 Age 50+ Those with 15+ YOS at MnSCU Institutions, regardless of age 1
Limit for calendar year 2009:
$16,500 $22,000 ($16,500 + $5,500) $25,000 ($16,500 + $5,500 + $3000) 1 Note: TIAA-CREF must calculate this limit. This additional limit can only continue for a five (5) year period.
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Deferred Compensation Program 457(b)
• • • Voluntary Plan State-sponsored Administered by Minnesota State Retirement System (MSRS) • Employer match available as per bargaining contract/personnel plan as long as employee is not SRP eligible
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Deferred Comp Limit Summary Participant Age/YOS: Limit for calendar year 2009:
Under age 50 Age 50+ $16,500 $22,000 ($16,500 + $5,500) Those who are within three (3) years of normal retirement age 1 $33,000 1 Note: The MNDCP Service Center must calculate this limit.
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Individual Retirement Account Plan (IRAP)
• • Annual Earnings Contribution Limit $245,000 Thus, the most that can be contributed in 2009 is $25,725: – 4.5 % employee @ $245,000 = – 6.0% employer @ $245,000 = $ 11,025 $ 14,700 $ 25,725
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Annual Additions Limit (415 limit)
• • • The Annual Additions Limit is the total amount (both ER and EE contributions) that can be deferred by an employee For 2009, the limit is $49,000 This limit includes the Supplemental Retirement Plan (SRP) and the Individual Retirement Account Plan (IRAP)
Questions?
Rollovers/Information Sharing Agreements: IRS Guidance for 403(b) Plans
Dirk Camiletti TIAA-CREF
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Final 403(b) Regulations
Effective Dates • Issued July 26, 2007 • The effective date under the final regulations was generally
January 1, 2009
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Final 403(b) Regulations
Transfers to Unapproved Vendors • • • Revenue Ruling 90-24 permitted participant to do a direct transfer between 403(b) contracts even if the contract was not approved under the plan (“90-24 transfers”).
After 9/24/07, transfers to contracts issued by unapproved vendors prohibited unless the vendor agrees to share information necessary for compliance with the employer – Information Sharing Agreement (“ISA”) needed.
– Loans, hardships, termination of employment – Can’t rely on employee representation Transfers to unapproved vendors after September 24, 2007, must have an ISA in place by January 1, 2009.
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Information Sharing Agreement Facts
Information Sharing Agreements are: Agreements that are entered into between 403(b) Plan Sponsors, such as MnSCU, with non-approved TSA financial providers (e.g., MetLife, Thrivent Financial, etc.) to share information on current employee 403(b) accounts. MnSCU does not enter into Information Sharing Agreements.
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Final 403(b) Regulations
Information Sharing with Approved Vendors • • Employer and approved vendors must also share information related to tax compliance requirements to ensure plan’s operational compliance – No separate ISA required Vendors (approved or unapproved with ISA) cannot rely on employee representation – loans, hardships, termination of employment
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Revenue Procedure 2007-71
Transitional Rules for Information Sharing • “Grandfathered” Contracts – – No information sharing required – Vendors deselected prior to 2005 – 90-24 transfer to unapproved vendor prior to 9/25/07 • “Orphan” Contracts – “reasonable good faith effort” to share information required – vendors deselected after 2004 and prior to 2009 – 90-24 transfers to unapproved vendor between 9/25/07 and 1/1/09
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Revenue Procedure 2007-71
Transitional Rules for Interim Contracts • Transfers to unapproved vendors after 9/24/07 – If no ISA on 1/1/09, re-exchange into contract of approved vendor or contract of unapproved vendor with ISA – Up until 6/30/09 to re-exchange – No information sharing required for interim contract – Alternatively, reasonable good faith standard available
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Rollover Process
Campus HR offices are not authorized to sign off on employee rollover and distribution requests under the MnSCU Defined Contribution Plan and Tax Sheltered Annuity Plan.
Please forward all such requests to the OOC for research and signature.
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Case Study: Rollovers
Eligible Rollovers • IRAP & SRP – New Hire / In-Service – Post Termination • TSA – New Hire / In-Service – Post Termination
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Rollover Information
With respect to rollovers…..
Participants can rollover contributions from outside eligible plans into the MnSCU defined contribution plans.
The rollover authorization form is available on the MnSCU HR web site at: http://www.tiaa-cref.org/pdf/F8872.pdf
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Legal Disclaimer
This PowerPoint is for informational purposes only and the statements made during this presentation represent TIAA CREF’s interpretation of applicable law. It is presented with the understanding that TIAA-CREF (or its affiliates, distributors, employees, representatives and/or insurance agents) is not engaged in rendering legal or tax advice.
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Thank you for joining us!
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY.
©2009 Teachers Insurance and Annuity Association-College Retirement Equities Fund, New York, NY 10017 C45429
Questions?
Reports – A- Palooza
Barb Biljan HRIS Lead Management Analyst, Personnel
Welcome to Reports-A-Palooza
Reviewing reports that will help make selecting and coding retirement easier
Reports-A-Palooza
The HR 7010 Report is a valuable tool to help manage retirement issues for employees.
It is recommended that campuses run this report every payroll period.
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Reports-A-Palooza
HR Reconciliation Queries Retirement Code Blank Retirement Status Code Blank Errors on Unclassified Retirement Errors on Classified Retirement Phased & AEP Errors
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Reports A Palooza
• Blank reports mean no errors • Any data returned is inaccurate or missing and should be corrected • Export reports to Excel
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Reports-A-Palooza
Supplemental Retirement Reconciliation Queries • • SRP Code is blank SRP Code is Y, but Deduct Code is blank
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Reports-A-Palooza
• • • SRP Annual Review Process Possible Newly Eligible Employees All SRP on all assignment data – includes classified & unclassified SRP deduction code information
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Reports-A-Palooza
End of Fiscal Year
• • • • SRP Annual Review includes: Step-by-step process on website Includes eligibility information Flow chart for eligibility Missed deductions forms
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Reports-A-Palooza
• Phased Retirement Query • Annuitant Employment Program Query • TRA Annual Reports Queries
Questions?
Intra-MnSCU Hires
Mary Muenchow Director of Personnel
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Intra-MnSCU Hires
• • • Past service Concurrent service Sometimes University of Minnesota service • One campus or multiple
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Intra-MnSCU Hires
• • Affects both: IRAP SRP
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Intra-MnSCU Hires
• • • • • Helps to Locate Other Service: SEMA4 Public Data Jobs Data in SCUPPS Multi-Campus Report New EE Retirement Checklist Call or e-mail
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Intra-MnSCU Hires
Records of Prior Service: • SEMA4 Public Data • Jobs Data in SCUPPS
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Intra-MnSCU Hires
New EE Retirement Checklist: • Prior service date • Concurrent work and location • Retiree status information
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Intra-MnSCU Hires
Multi-Campus Report provides information about concurrent work at another campus
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Intra-MnSCU Hires
Basic rule for both IRAP & SRP:
Once eligible, always eligible
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Intra-MnSCU Hires
Primary Retirement:
Election process is for MnSCU service only!
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Intra-MnSCU Hires
Once per career choice for IRAP/TRA until this year: 7/1/09 New second election for newly tenured/permanent faculty
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Intra-MnSCU Hires
Three flow charts on the website help to determine coverage: • IRAP for unclassified employees • IRAP for Administrators • SRP
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Intra-MnSCU Hires
• • • • Each Job Record Number has its own: Primary Retire Code Retirement Status Code SRP Eligibility Code SRP Deduction Code
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Intra-MnSCU Hires
When taking over Job Records, must review retirement and SRP coding for
each
Job Record
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Intra-MnSCU Hires
Remember that SEMA4 will recognize only one retire code per job record for one deduction per payroll period