Engrossed Substitute House Bill 1981 (ESHB 1981) creates a new higher education retirement plan (HERP) supplemental benefit fund for the purpose of funding future benefit obligations of HERP supplemental benefits.
Beginning January 1, 2012, higher education employers* will contribute .25 percent on all HERP salaries paid. The rate increases to .50 percent on July 1, 2013. Similar to other retirement reporting, employers will report and pay the HERP contributions directly to DRS, which will be invested by the Washington State Investment Board (WSIB).
Beginning in January 2012, report the total HERP compensation for all employees who are participating in HERP and employer contributions equal to .25 percent of the reported compensation, regardless of whether or not they are eligible for the supplemental benefit.
For example, if the total HERP salaries for January 10, 2012 payroll is $500,000. Then, you would pay $1,250 in contributions to DRS ($500,000 x .25% = $1,250).
HERP Report Group Number
DRS will assign a new, unique HERP report group number to each higher education institution that you will use to report HERP information. This number is different from the report group numbers you currently use for PERS and TRS. We’ll notify you of your new HERP report group number by November 2011.
Reporting Method Options
You may choose to report your HERP information through the DRS Web-Based Employer Transmittal (WBET) or through Secure File Transfer (SFT).
1. Web-Based Employer Transmittal (WBET)
You may choose to report your HERP information to DRS using WBET, a secure Internet application. Once logged in, you will select your HERP report group and enter your total HERP compensation. WBET will automatically calculate the HERP employer contributions owed, based on the compensation you entered, and the HERP contribution rate.
If you plan to use WBET for your regular HERP reporting, please contact us at the number below so we can activate your report in January.
2. Secured File Transfer (SFT)
If you choose to report HERP information through SFT, you can send your HERP information on an additional file with your other DRS retirement files. For HERP reporting, you will send only a summary record. Do not report the detail records for employees participating in your HERP. Below is the format for the summary record. The following fields must be zero:
|Field||Format||Field Length||Fixed Start||Fixed End||Herp Example|
|Record Type Identifier2||Character||1||1||1||S|
|Reporting Group Number1||Character||6||2||7||Z01243|
|Report Type1||Character||1||14||14||R or C|
|Report Version Number1,4||##||2||15||16||01|
|Expected Monthly Reports 5||##||2||17||18||02|
|Total Compensation||+/-#########.##||13||19||31||Total HERP Salary|
|Total Member Contributions/Deferrals||+/-#########.##||13||32||44||Must be zero|
|Total Employer Contributions||+/-#########.##||13||45||57||Total HERP salary x rate|
|Total Hours||+/-#########.#||12||58||69||Must be zero|
|Total Records Reported||#######||7||70||76||Must be zero|
|Total Days||+/-#########.#||12||77||88||Must be zero|
1These four data elements form the key and are part of each record type.
2Record Type Identifier is S.
3Unique number assigned by DRS.
4Employers using the multiple reporting option must use the Report Version Number to identify which transmittal report this is in the month's sequence of reports.
5Employers using the multiple reporting option must use the Expected Monthly Reports fields to identify total number of reports they expect to submit for the report period. (If you only report once a month, this will be “01.”)
If you plan to use SFT for HERP reporting, we encourage you to send a test file before sending production data. Please contact us by November 30, 2011, at the number listed below to coordinate this testing.
You will use a new Payment Advice form for paying HERP contributions. We’ll provide you with a link to the new form before January 1, 2012. A new system/plan code (Z1) will be used for tracking contributions made to the new HERP fund.
Similar to other retirement reporting, payment of HERP contributions are due by the 15th of the month following the report period. If payments are past due, interest will be assessed. We’ll include HERP payments on your Statement of Account Activity. Please see Chapter 10 of the DRS Employer Handbook for additional information regarding Account Activity.
*Community and Technical Colleges Only
We are coordinating directly with the State Board for Community and Technical Colleges to develop HERP reporting and payment methods.
Later this year, we’ll update the DRS Employer Handbook with the new HERP information. In the meantime, if you have any questions, please reply to this email or call Employer Support Services at 360-664-7200 (option 2) or 1-800-547-6657 (option 6, option 2).