Additional Payroll Retirement Contribution (2013)

Overview

Applicable to

State agencies

Policy

The 2014-15 General Appropriations Act, Article IX, Section 17.13, requires each state agency to contribute an amount equal to 0.5 percent of the total base wages and salaries for each benefits-eligible employee to the Employees Retirement System’s Retirement Program, beginning with the September 2013 pay period.

The Texas Comptroller of Public Accounts is publishing these rules and regulations to administer the program.

Legal citation

The General Appropriations Act, Article IX, Section 17.13 (for the 2014–15 biennium); Section 815.4035, Government Code; Senate Bill 1459

Benefits-eligible employee

An employee of a state agency is considered to be a “benefits-eligible employee” if he or she has a state contribution for retirement for that payroll period. This definition includes a Return-to-Work retiree who retired on or after Sept. 1, 2009, and for whom the agency pays the Return-to-Work Surcharge.

Base salary

The amounts paid as base salary will not include any other emoluments that are sometimes paid using the salary expenditure object code.

Total base salary does not include:

• Longevity pay
• Hazardous duty pay
• Benefit replacement pay
• Overtime pay
• Other payments that are not part of the base salary of the employee

Exemptions from the 0.5 percent additional payroll retirement contribution

No deductions occur for:

• Employees on a full-month’s leave without pay, even in Family and Medical Leave Act (FMLA) situations
• Employees in the 90-day wait (since there is no state paid amount of retirement)
• Employees participating in the Judicial Retirement System — Plan One or Plan Two
• Return-to-Work Retirees who retired on or before Aug. 31, 2009

Procedure

When the PRC is in effect

The Additional Payroll Retirement Contribution (PRC) deduction starts with the September 2013 pay period and continues through the payrolls paid for the August 2015 payroll month.

How the PRC is paid

The PRC is paid using the:

• Comptroller expenditure object:
  7040 – Additional Payroll Retirement Contribution for Employees Retirement System Retirement Program
• Texas Identification Number (TIN) for the various retirement systems:
  

  Vendor Name	Vendor Number
  ERS-Payroll Retirement State Contribution	3-3273273277-028
  ERS-LECOS Payroll Retirement State Contribution	3-3273273277-032
  ERS-Return-to-Work (RTW) Payroll Retirement State Contribution	3-3273273277-033
  ERS-LECOS RTW Payroll Retirement State Contribution	3-3273273277-034
  ERS – Payroll Retirement State Contribution Elected State Officials	3-3273273277-035

State agencies must be aware that:

• The 0.5 percent payroll contribution is an addition to the state retirement match for each benefits-eligible employee.
• The PRC deduction must adjust for situations in which the employee receives partial pay.

When the PRC is paid

Agency employees paid monthly

The PRC is due the first of the month for employees paid monthly.

Agency employees paid twice-monthly

For twice-monthly paid employees at state agencies, the agency-paid portion of retirement contributions are paid to ERS with each payroll:

• The PRC is calculated on actual base salary (BSY) for the first half of the month (paid on the 15th of the month) and is from the agency budget as an addition to the state paid amount.
• The PRC is calculated again on actual BSY for the second half of the month (paid on the first of the following month because of the need to know the total amount of base salary for the month).

Examples

See applicable SPRS and USPS examples in this fiscal policy and procedure (FPP) detailing how the PRC is calculated and deducted for the payroll system used by your agency.

State agencies reporting to SPRS

For state agencies reporting to the Standardized Payroll/Personnel Reporting System (SPRS), the 0.5 percent Additional Payroll Retirement Contribution (PRC) is reported as a new state-paid payroll retirement contribution deduction. It is to be paid as an addition to the state-paid amount of 7.5 percent in fiscal 2014 and fiscal 2015.

The PRC must be paid using each individual employee’s funding source (Program Cost Account or Index) that is used to pay the employee’s base salary (BSY). For SPRS agencies, the new state or agency-paid deduction is to be reported by-employee to ERS on the Daily Contribution file.

For state agencies reporting to SPRS, new state-paid deduction codes — PRE, PRC, PRR and PRS — have been created to track the Additional Payroll Retirement Contribution amount. The PRC amount is paid from agency budget.

SPRS agency examples

SPRS monthly example

Employee is paid $4000.00 BSY once a month, along with $80.00 of Longevity. (Note: The state retirement contribution (STR) is calculated as BSY plus Longevity times 7.5 percent. The PRC amount is not computed on the Longevity Pay.) The state contribution for retirement for the employee for the month is $306.00. The agency PRC amount is $20.00.

Monthly payroll – Paid on the first

Record type	Entitlement code	Program cost account	Identification number	Comptroller object	Amount
520	BSY	EE PCA		7002	4000.00
520	LOG	EE PCA		7022	80.00
560	PRE	EE PCA	33273273277028	7040	20.00
560	STR	ERS PCA	33273273277001	7032	306.00

SPRS twice-monthly example

Employee is paid $2000.00 twice a month. The state retirement contribution for the employee for the first and second half of the month is $150.75, respectively. The agency PRC amount for the first and second half of the month amount is $10.00, respectively.

First-half payroll – Paid on the 15th of the month

Record type	Entitlement code	Program cost account	Identification number	Comptroller object	Amount
520	BSY	EE PCA		7016	2000.00
560	PRE	EE PCA	33273273277028	7040	10.00
560	STR	ERS PCA	33273273277001	7032	150.75

Second-half payroll – Paid on the first of the following month

Record type	Entitlement code	Program cost account	Identification number	Comptroller object	Amount
520	BSY	EE PCA		7016	2000.00
560	PRE	EE PCA	33273273277028	7040	10.00
560	STR	ERS PCA	33273273277001	7032	150.75

State agencies reporting to USPS

For state agencies using the Uniform Statewide Payroll/Personnel System (USPS), a new state-paid deduction (022) has been created to track the Additional Payroll Retirement Contribution (PRC) amount. The PRC amount is paid from agency budget.

USPS deduction 022 will fund from the Program Cost Account or index used to fund the employee’s base salary.

USPS agency examples

USPS monthly example

Employee is paid $4000.00 BSY once a month, along with $80.00 of Longevity. (Note: The state retirement contribution is calculated as BSY plus Longevity times 7.5 percent. The PRC amount is not computed on the Longevity Pay.) The state contribution for retirement for the employee for the month is $306.00. The agency PRC amount is $20.00.

Monthly payroll – Paid on the first

Payment type	Program cost account	Identification number	Comptroller object	Amount
Base Salary	EE PCA		7002	4000.00
Longevity	EE PCA		7022	80.00
PRC	EE PCA	33273273277028	7040	20.00
STH	ERS PCA	33273273277001	7032	306.00

USPS twice-monthly example

Employee is paid $2000.00 twice a month. The state retirement contribution for the employee for the first and second half of the month is $150.75, respectively. The agency PRC amount for the first and second half of the month amount is $10.00, respectively.

First-half payroll – Paid on the 15th of the month

Payment type	Program cost account	Identification number	Comptroller object	Amount
Base Salary	EE PCA		7016	2000.00
PRC	EE PCA	33273273277028	7040	10.00
STR	ERS PCA	33273273277001	7032	150.75

Second-half payroll – Paid on the first of the following month

Payment type	Program cost account	Identification number	Comptroller object	Amount
Base Salary	EE PCA		7016	2000.00
PRC	EE PCA	33273273277028	7040	10.00
STR	ERS PCA	33273273277001	7032	150.75