Chapter 5: Special Conditions - Reporting in Higher Education

Summary

This section provides information on retirement plan options for non-retired employees working in positions eligible for participation in a Higher Education Retirement Plan (HERP) and/or for a DRS administered plan through their employment at an institution of higher education. This section also contains information on reporting a retiree from a DRS-administered plan that returns to work for an institution of higher education. The following public higher education institutions have authority to sponsor a HERP:

  • University of Washington (UW)
  • Washington State University (WSU)
  • Western Washington University (Western)
  • Central Washington University (Central)
  • Eastern Washington University (Eastern)
  • The Evergreen State College (Evergreen)
  • The State Community and Technical Colleges

Each of the four-year institutions listed above has developed rules for participation and each administers the plan for its employees. The State Board for Community and Technical Colleges sponsors the HERP applicable to employees of the community and technical colleges and adopts rules governing participation. However, each community or technical college locally administers the plan. Please check with the appropriate individual at your institution for details about the requirements for HERP participation.

An employee who is eligible for HERP participation and is a current PERS or TRS member may be given certain options for retirement coverage. This section provides general information about these options for PERS or TRS members working in higher education. As noted above, please check with the appropriate individual at your institution for information specific to an individual or situation.

New Hires

Effective July 1, 2011, new employees with no past Higher Education Retirement Plan (HERP) history who are hired into a HERP-eligible position have a choice between retirement systems. New employees with prior DRS membership may also be eligible for the HERP/Plan 3 choice, depending on their past membership scenario.

There are several steps to consider when evaluating an employee's eligibility for membership. You need to know if the employee has retired or is eligible to retire from a DRS covered retirement system. You will also need to know if the employee has ever been a member of a Washington State Retirement System. Then, depending on the position you hire them into you must evaluate the employee's eligibility under the rules that apply for the appropriate system and plan.

Effective July 1, 2011, Higher Education Employers cannot offer their HERP to new employees who have retired or are eligible to retire from any retirement plan administered by DRS and listed in RCW 41.50.030. Employers can use the online Member Reporting Verification (MRV) to verify if the employee is retired. To determine if an employee is eligible to retire, please use this guideline and then contact Employer Support Services (ESS) if needed.

Tools for determining system and plan:

Membership Options for Higher Education Q & A

Retirement Membership Options — Faculty

Retirement Membership Options — Non Faculty

Choice between HERP and TRS/PERS Plan 3

New employees who qualify for the choice between the HERP and Plan 3 have 30 days to choose (PERS for non-faculty; TRS for faculty). If a choice isn't made within 30 days, the employer will default the employee to the HERP. Whether the employee chooses or defaults, the choice is irrevocable.

Please provide the following information to employees considering whether or not to choose Plan 3:

Please do not refer new HERP/Plan 3 eligible employees to the Plan Choice Booklet. The rules affecting HERP-eligible higher education employees are different. If your employees have Plan 3 questions that cannot be answered with the above publications, please ask them to contact DRS.

When an employee chooses Plan 3, have them complete the Higher Education Employees Plan 3 Investment Program Form and then forward a copy of this form to DRS.

If an employee (who hasn't previously participated in Plan 3) chooses Plan 3 instead of HERP, report the following information on your DRS transmittal:

  • 3C and date TRS or PERS was chosen
  • Employment begin date
  • Member contributions, investment program, rate option
  • Compensation, hours, employer contributions

Reporting Retirees who Return To Work (RRTW)

RRTW rules will change beginning January 2012. Changes to work limits impact primarily Plan 1 members of TRS and PERS who will no longer be able to work in excess of 867 hours. Hours worked by retirees employed in HERP-eligible positions must be reported to DRS. These hours count toward the retiree's work limits.

Rehired retirees who were participating in a HERP before July 1, 2011, may continue to do so, but are subject to the new return to work rules below.

HERP-Eligible Positions Impact DRS Retirees

Beginning January 1, 2012, you must report DRS retirees working in HERP-eligible positions as working in retirement-eligible positions on the retirement transmittal. These hours will now be counted toward the retiree's work limits. In the past these individuals were reported to DRS as working in retirement-ineligible positions. Please see the attached DRS Retiree Returning to Work at Institution of Higher Education Reporting Chart for a list of reporting codes for retirees working in HERP-eligible positions.

HERP Supplemental Fund

Engrossed Substitute House Bill 1981 (ESHB 1981) created a 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).

Reporting

Beginning in January 2012, report the total 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 assigned a new, unique HERP report group number to each higher education institution to report HERP information via the transmittal.

Reporting Method Options

You may choose to report your HERP supplemental fund information through the DRS Web-Based Employer Transmittal (WBET) or through Secure File Transfer (SFT).

Payments

You will use a new Payment Advice form for paying HERP contributions. 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.

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