DRS Notice 22-014, Compliance Review common findings
Date: November 07, 2022
Applies to: All Employers
Subject: DRS Notice 22-014, Compliance Review common findings
The DRS Compliance Team has been busy conducting compliance reviews throughout the state. We would like to share with you the common themes/issues that the team is seeing.
Retirement Status is not being verified for all new hires
RCW 41.50.139 requires employers to obtain, in writing, the retirement status of all new employees indicating whether they have ever been retired from a Washington state retirement system. The information should be obtained each time an employee begins working for you. Employers can document retirement status through their own processes or by using the Retirement Status Verification form. Employers retain this form for 60 years.
Retirees who have returned to work are not being reported
If you hire a DRS retiree as an employee, you must report their employment on the retirement transmittal report. This includes all retirees regardless of the job they are doing, as well as elected officials. Include DRS retirees on the transmittal report for the system applicable to the position in which they are working; do not report them for the system from which they are retired.
Not reporting accurate begin dates
It is very important to accurately report begin dates along with the associated compensation and hours. The number of hours reported drives the amount of service credit the employee earns. Too often employees are hired in one month and are reported with a begin date in the following month. This causes the employee to lose partial or full service credit they are entitled to.
Hours and compensation are not being reported as earned
Retirement data must be reported as earned. Report compensation, employer contributions, non-Plan 3 member contributions and hours in the months the service was earned. When data is not reported as earned it can result in missing/inaccurate service credit for the employee.
Actual hours worked are not being reported
Do not report a predetermined set number of hours each month (for example reporting 160 hours every month for your employees). Report the actual number of hours each employee worked in the month you are reporting.
Position eligibility is not being reviewed annually
Remember to review and document position eligibility status at least annually. Performing annual evaluations allows the employer to identify changes in a position’s eligibility status. Failure to do so can result in a potential employer liability for contributions for any unreported employees found to be eligible, or unnecessary contributions paid for any employees found to be ineligible. Determining position eligibility is the same for active members and for retirees who return to work.
Elected or Governor-Appointed Officials are not offered membership
If newly elected or governor-appointed officials come to work at your agency, please instruct them first to go to the Elected or Governor-Appointed Official page to read about the requirements for becoming a member and to fill out the form. Do not automatically report them to membership.
If you have any questions regarding this DRS Notice, please contact Employer Support Services at 360-664-7200, option 2, or 800-547-6657, option 6, option 2, or email us.