Position eligibility verification wrap-up
Once you determine the eligibility of all the positions in your audit sample, verify that you have been correctly reporting your employees in those positions. If you discover that you have not reported an employee in an eligible position, or that you have reported an employee in an ineligible position, you need to contact Employer Support Services immediately. If you have an assigned auditor, please contact them as well.
We require you to:
- Obtain written statements from all employees.
- Retain documents used for retirement verification for 60 years.
- Offer your elected or governor-appointed officials the opportunity to participate in retirement system membership.
- Report any retiree who returns to work.
- Ensure that you properly classified worker status for contractors.
Required written statements
We require you to obtain written statements from all new employees regarding their retirement status. You can use the Retirement Status Form to meet this requirement, or you can also use your own method of documentation. You must retain this documentation in the employee’s file.
If you don’t have the required written statements from employees, you MUST:
- Obtain written statements for all existing employees.
- Begin requesting written statements for all new employees.
We require you to retain documents used for retirement verification for 60 years. These documents include:
- Individual employee pay history or payroll registers
- Time cards or time sheets
We also recommend that you retain the following documents:
- Initial and annual eligibility determinations
- Written statements regarding retirement status
Although not required, these documents are helpful in cases where an employee returns years later to challenge an eligibility determination. Without this type of documentation, DRS may have no choice but to give the employee the benefit of the doubt. This could have a financial impact on the employer.
We require you to offer your elected or governor-appointed officials the opportunity to participate in retirement system membership. When you make the offer you should communicate the following:
- They can receive retirement benefits.
- They must meet the minimum requirements for their plan and position.
- They must choose to participate or they are exempt from membership.
City managers or administrators must choose to participate within 30 days from their hire date or their costs may increase significantly.
Although not required, we recommend you document the following:
- When you offered them the option
- When they made their decision
- Whether they opted to participate
Your elected or governor-appointed officials may apply for membership any time during the current appointment or term of office. The membership decision to participate in retirement system membership is final until the elected or governor-appointed official is separated from public employment.
Retirees who return to work
We require you to report any retiree who returns to work for you. You are liable for any pension overpayments made if you fail to report a retiree or report incorrect information. When you hire a retiree from one of the Washington State retirement systems you must report:
- The retiree on the transmittal along with your active members.
- The retiree in the system applicable to the position they are in – not the system they retired from.
- The beginning date along with the type code to indicate position status (eligible or ineligible).
- Any change in position status (ineligible to eligible or vice versa).
- The ending date when the retiree leaves employment.
Using the position and personnel list you created, select those employees who are rehired retirees. Verify their retirement status by using the:
- Retirement Status form
- Member Retirement Verification (MRV) system
If you see the following message displayed in MRV, contact Employer Support Services immediately for reporting instructions: “Retired under the 2008 early retirement factors. Stricter return to work rules apply,” If you don’t see this message, document and retain the form.
If you would like more detailed information about rehired retirees, please refer to the following:
- Employer Handbook, Chapter 5: Special Conditions ~ Employing Retirees
- DRS Communications, DRS Notices by subject ~ Retiree Return to Work
We require you to ensure that you did not misclassify worker status for all your independent contractors. You must determine if a worker is an independent contractor or an employee. To do so you need to:
- Review the entire relationship between the worker and the employer.
- Review the terms of the contract and the actual arrangement under which the worker performs services.
To help determine worker status, use the “Independent Contractor Status Questionnaire.” Generally, you’ll find a worker is an:
- Employee if the employer has the right to control and direct the work of the worker.
- Independent contractor if the employer has the right to control or direct only the result of the services and not the means and methods used to provide the services.
You must verify the retirement status of any independent contractor you directly compensate. You’re not required to verify the status of vendor companies, including their employees and subcontractors who you hire through your normal bidding process. Use the following scenarios to help you determine which steps you should take to comply with the requirements:
- You hire Sam Smith under a personal services contract to provide a one day training class to your employees. Sam Smith is paid directly for his services. Complete a Contractor Status form for Sam Smith.
- You hire John Jones as an independent contractor to provide assistance in developing a new computer system for your office. John’s business is Jones Computer Services. Although John has a business license and name it doesn’t exempt him from the return-to-work limitations if he retired using the 2008 Early Retirement Factors (ERFs). John is directly compensated for his services and can’t use a business name to avoid the work limitations. Complete a Contractor Status form.
- Through your bidding process, you hire ABC Landscaping to maintain your grounds. This company has 15 employees. You do not need to complete Contractor Status forms for this company or its employees.
- You hire XYZ Computers to replace all of your computer equipment. It’s a large company with more than 1,500 employees. You do not need to complete Contractor Status forms for this company or its employees.
To verify the retirement status, you should utilize the:
- Contractor Status form
- Member Retirement Verification (MRV) system
If you see the following message displayed in MRV, contact Employer Support Services immediately for reporting instructions.: “Retired under the 2008 early retirement factors. Stricter return to work rules apply,” If you don’t see this message, document and retain the form.
f you would like more information about independent contractors, please refer to DRS E-mail Notice 09-001.