Employer Frequently Asked Questions
Employers are encouraged to submit questions not answered here to Employer Support Services. For more detailed information refer to the DRS Employer Handbook.
Select from the following topics:
- How are retirement contribution rates determined?
- Contribution rates are established by a process mandated in RCW 41.45, Actuarial Funding of the State Retirement Systems. In a few plans, rates are a specific percent of salary prescribed in statute. In the majority of plans, rates are the product of a funding formula.
- Is there a help line just for employers to call with retirement questions?
- Yes, Employer Support Services (ESS) can be reached by calling 800-547-6657, option 6 and then 2; or call direct at 360-664-7200, option 2. View our contact page for other ways to communicate with ESS.
- We hired a new payroll person who will be reporting retirement. Do I have to notify DRS?
- Yes, employers must notify DRS when retirement reporting personnel change in order to obtain a new password and access to DRS electronic services. Users are not permitted to share passwords. Contact DRS to update personnel changes.
- To sign up a new payroll or human resource person, what information will DRS need from the employer?
- The main retirement contact will need to provide DRS with the new payroll or HR person's name, address, phone number and email address. Also list the electronic services [Select from: EPAY, EARN, MSV, WBET] and reporting group numbers that the person needs to access.
- How are retirement laws decided?
- Retirement laws are established by the State Legislature through the enactment of laws. In 2003 the Select Committee on Pension Policy (SCPP) was established to study pension issues, develop pension policies, and make recommendations to the Legislature. The SCPP is a 20-member committee composed of elected officials, stakeholder representatives, employer representatives, and the Directors of DRS and OFM. Prior to 2003, the Joint Committee on Pension Policy (JCPP) performed these duties.
- If you have questions about the Select Committee, contact:
The Office of the State Actuary
PO Box 40914
Olympia, WA 98504-0914
- Is there training available for new payroll or human resource personnel?
- Yes, DRS provides training. Check the Employers home page for workshops that are currently being offered in your area. Check the New Payroll page for scheduling a training session.
- According to the Internal Revenue Service, what type of retirement plan does DRS administer?
- Members of PERS, SERS, TRS, LEOFF, WSPRS, JRS participate in a 401(a) mandatory retirement plan. Because this plan is mandatory, an employee who works in a retirement eligible position is required to contribute. In addition, DRS administers a 457 voluntary deferred compensation plan.
Transmittals and Reporting
- How do I report compensatory time for a PERS employee?
- Compensatory time is reported with status code &A.& Report the actual number of hours used, not time and a half. Report compensatory time when it is used; but if it is cashed out, report compensatory time as earned.
- My edit message said that an employee's data rejected because I was reporting earnings past the end date. How do I fix this?
- Determine if:
- You have reported the data for the wrong EARN PERIOD. If so, you will need to re-report the rejected data using the correct EARN PERIOD.
- You have sent us the wrong end date. A wrong end date cannot be changed via the transmittal process. You must fax (360) 753-1090 or e-mail DRS, requesting that DRS delete the incorrect end date. Include in the request, the member's name, Social Security Number, the incorrect date, and the report group number. Once the end date has been deleted, DRS will contact you. You will need to transmit the correct end date and re-report any rejected data.
- How do I decide if an employee is working in an eligible position?
- Eligibility is different for different systems and plans. Use the New Hire Pyramid "Position Eligibility" or the Employer Handbook Chapter 2 to determine whether your employee is working in an eligible position.
- We hired an employee into an ineligible position in January. June 15, 2004, the position changed to an eligible position. How do I report this?
- Report the day that the position became eligible, June 15, 2004. Report all compensation earned for the entire month. DRS recommends that you document your decision using the Position Eligibility Worksheet.
- What is the criteria for an independent contractor?
- Begin your research on whether an individual is an independent contractor or an employee using the Independent Contractor Questionnaire. See also WAC 415-02-110.
- Do I report L&I payments when a member is on a temporary duty disability?
- Whether Workers' Compensation payments come from L&I or from a self-insured employer, the payments are not for services rendered and are not reportable. For more information see DRS Notices 86-011[PERS], 94-006 [PERS], 89-04[LEOFF 2]. Members can apply for optional service credit while on Temporary Duty Disability. [This applies to PERS Plan 1 or 2 & 3; SERS Plan 2,3; PSERS; TRS Plan 1, TRS Plans 2, 3; LEOFF Plan 2; and WSPRS Plan 1, 2 employees].
- I have an employee who was on a Temporary Duty Disability. He used his sick leave, and I reported it to DRS. Now he's buying his sick leave back using his L&I payments.
- If the employee gives the check issued by L&I or similar federal workers' compensation program to the employer, the employer re-instates some or all of the employees leave balance. Since the leave has been reinstated, the employer needs to reverse any compensation, contributions and hours that were reported as the paid time off.
- How do I report overtime for an employee?
- Overtime is reported when it is earned with status code "A." Report the actual number of hours worked, not time and a half. (Overtime is not reportable for LEOFF Plan 1 or WSPRS.)
- I got an edit message that said the data was "rejected." What do I need to do?
- First verify why the data rejected. Rejected data means that the information was not added or subtracted from the member's account. You will need to re-report the rejected data, if it is supposed to be recorded to the member's account. On the other hand, if the rejected information was reported in error, do not re-report it. Remember, "rejected" means the data did not get into the member's account.
- We terminated a PERS employee for his inability to perform his job duties. A legal determination requires that we reinstate the employee and "restore all lost wages, seniority and benefits." Is this reportable?
- If the re-instatement requires that the person be "made whole" or "all benefits restored", RCW 41.40.010(8) specifically designates these payments as reportable compensation. Prorate the payment over the period that the employee was suspended, terminated, or otherwise absent from work. The payments are only reportable to the extent that they are equivalent to the salary the employee would have earned had he or she been working. [WAC 415-108-467] There may be other possible legal parameters not mentioned here. Contact DRS if you have questions.
- How can I report more data for a separated employee when DRS already has an end date?
- As long as you are reporting data for an EARN period occurring between the begin and end date that you reported for the employee, the DRS system will accept the data.
- I separated an employee on my regular WBET report, but the member's record keeps re-appearing on subsequent reports.
- This occurs because the employee is being deleted before the report is sent. Be sure that you do not check the "Remove This Employee From This Report" button after you have added the end date in the UPDATE MEMBER INFORMATION screen; because if you remove the employee, you also remove the end date.
- I transmitted an incorrect Social Security Number (SSN). How can I correct it?
- E-mail ESS the member's name, your report group number, the incorrect SSN, the correct SSN, and the member's date of birth. It will take DRS approximately two to three days to verify the correct number through the Social Security Administration.
- In the meantime, on your next transmittal, start using the correct SSN number. When you transmit the new SSN, you will also need to transmit the member profile record and the begin date. (The begin date should be the same as the begin date reported under the old SSN.) Compensation, contributions and hours from this point forward will need to be reported under the new number. DRS will transfer all account information under the old number to the correct SSN once verification is received from Social Security Administration. DRS will notify you if there are any problems with the new SSN.
- How do I determine in what plan to report an employee?
- First use DRS's Electronic Services "Membership Status Verification" to determine the past membership history of the employee. Once you know the past history, select from the different types of employment history in the New Hire Pyramid's "Reporting an Employee".
- I reported the wrong begin date to DRS. How can an incorrect begin date be changed?
- You cannot change an incorrect begin date via the transmittal process. To change the incorrect date, the employer must fax (360) 753-1090 or e-mail the change. Include in the request the member's name, Social Security Number, report group number, the incorrect begin date, and the correct begin date. DRS will change the begin date and contact you when the change is completed. You will need to re-report any rejected data.
- I don’t understand why one record rejected and another received a warning on my edit messages.
- There are three types of edit messages: warnings, rejections and information changed/defaulted. Compensation, contributions and/or hours can be rejected if they create a net negative balance or are reported incorrectly. In some cases, the member and employer contributions may be defaulted or corrected by our system and fixed automatically. See Types of Errors in the Employer Handbook, Chapter 9, for definitions and examples.
- I reported the wrong end date to DRS. How can an incorrect end date be changed?
- You cannot change an incorrect end date via the transmittal process. To change the incorrect date, the employer must fax (360) 753-1090, or e-mail DRS, requesting that DRS delete the incorrect end date. Include in the request the member's name, Social Security Number, and the report group number. Once the end date has been deleted, DRS will contact you. You will need to transmit the correct end date and re-report any rejected data.
- How long will an audit take?
- The length of time that an audit takes depends on several factors including the number of employees and the number of retirement plans you have, your payroll reporting method, and your retirement compliance up to the date of the audit. Audits go more quickly if you have the needed records available.
- What information is needed for a smooth audit?
- You will need your payroll and personnel records. These records are needed to determine if the data was reported as earned. In addition, these records should confirm that the compensation is reportable compensation.
- Why me? Why was I chosen to be audited?
- Audit selection is done based on the length of time since your last audit and your geographical location. If possible, audits are scheduled in clusters around a given location in order to make the most cost effective use of state resources.
Plan Choice Plan 2 and Plan 3
- We have a new hire who is a Plan 3 member changing employers. What do I report for this person?
- Do not take member contributions until you receive the signed MIF with the member's selection of rate option and investment program. Until then, report everything except member contributions. The member has up to 90 calendar days to make these selections or default to rate option A and SELF.
- How do I report a correction for a Plan 3 member that occurred while he was a Plan 2 member?
- How you would report a correction in this situation would depend on whether you are reporting earnings that were never previously reported or making a correction to previously reported earnings (to include re-reporting rejected earnings). Generally, once a member is enrolled in Plan 3, all information must be reported in Plan 3. Consequently, if you are reporting earnings for the first time, member contributions will be based on the member's chosen Plan 3 contribution rate, even if that compensation was earned while still a Plan 2 member. If you are making a correction to previously reported earnings, member contributions must be based on the appropriate contribution rate in effect at the time the earnings were initially reported.
- If you are using WBET to make the correction:
- If the compensation was never previously reported, enter the appropriate earning period along with the compensation and associated hours. WBET will automatically calculate employer contributions based on the rate in effect at the time the compensation was earned, and member contributions based on the member's chosen Plan 3 contribution rate.
- If correcting previously reported information, enter the information as indicated above. On the Earning Detail screen, select the member contributions as calculated by WBET, and enter the appropriate amount based on the member contribution rate in effect at the time the information was initially reported. WBET will accept an override of member contributions where Plan 3 is concerned.
After the correction is processed, you will need to take appropriate steps to balance your account.
- Will a Plan 3 member who fails to make a plan selection within 90 calendar days automatically default?
- No, you must transmit the default information to DRS. Some employers have set up their payroll systems to automatically generate the default information; most systems do not.
- An employee chose Plan 3, and I sent in the Member Information Form to DRS. Why is the member still in Plan 2?
- You must transmit the plan choice using the PLAN CHOICE record. Your transmittal moves the member from Plan 2 to Plan 3, not the form. The Member Information Form is imaged and kept by DRS to document this very important decision.
- We hired an employee in an eligible position who is a New Member Plan Choice. How do I report this person?
- Report the member's demographic information, a begin date, compensation, hours, member contributions, and employer contributions at the Plan 2 rate until you receive the MIF. The member has up to 90 calendar days to provide the MIF with his selections, or default to Plan 3, rate option A and SELF.
- We hired an employee into an eligible Teaching position from a classified position do they get plan choice?
- Yes, the member has no prior TRS membership, the member has a choice between TRS 2 or TRS 3.
- I looked up a new hire on the member reporting verification and it says they are a TRS 2 potential member. Do they get a choice or stay in plan 2?
- The member would get a choice if they have no prior service in TRS. Treat a potential member like a new member with a plan 2 or 3 choice. One exception: someone hired into a SERS position with prior PERS Plan 2 membership is reported in SERS Plan 2, with a January transfer option.
- What do I do if an employee was reported in Plan 3 in error?
- Send an e-mail requesting the cancellation of Plan 3 and the return of the employee to Plan 2. DRS will need the member's name, Social Security Number, report group number, and the date that the member signed the MIF requesting Plan 2. The account will need to be valued before the transfer can occur. Continue to report the employee in Plan 3, but deduct the Plan 2 rates, if your payroll system will allow you do so. Do not report the employee in Plan 2 until DRS contacts you.
Retiree Return to Work
- How do I report an address change for a retiree who has returned to work?
- The employer cannot make an address change for a member who has applied for retirement or who has already retired. The retiree will need to complete the Name/Address Change form and mail it to DRS.
- Address data is contained in the MEMBER PROFILE record. This record will reject if an employer transmits it for a retiree.
- John Doe worked for us through December 31, 2003, then he retired. After 90 calendar days he returned to work for us. Why won't WBET let me enter Plan 0 or the change of status code to a retiree status code?
- Unless DRS has received the end date for the active service period, the system will not recognize the employee as a Retiree Return to Work. You will need to:
- Back out any compensation earned as a retiree.
- Transmit the end date for the active service period.
- Let the transmittal process.
- Transmit a new begin date reporting the retiree in the system in which they are working, plan 0, and the correct retiree status code.
- If the retiree is working in an eligible position, re-report the compensation and hours that you backed out previously.
- Only begin and end dates are required for Retirees Returning to Work in ineligible positions.
- We are hiring a retiree into an ineligible position. Do we have to report him or her?
- Yes, all retirees must be reported to DRS, even those working in ineligible positions; however, reporting compensation and hours for ineligible positions is optional.
- Between Jan. 1, 2017, and July 31, 2020, K-12 employers reporting substitute teachers who retired from the Teachers' Retirement System (TRS) using the 2008 Early Retirement Factors (ERFs) must use a 96 transmittal type code and report compensation and hours to DRS.
- We are hiring a retiree as a contractor. Do we have to report him or her?
- Only if the individual retired using the 2008 early retirement factors (ERF) and is under age 65. If so, you need to report the begin date and end date of the work period. Use Member Reporting Verification (MRV) to determine whether or not the individual retired using the 2008 ERF.
- We hired a retiree into an ineligible position in January. In March the position changed from ineligible to eligible; but WBET won't let me choose the new type code. Why not?
- You must first transmit an end date for the ineligible period. Next report the new employment period with a start date and choose the eligible type code.
- I keep getting a missing earnings edit message. Why?
- Once you report a start date for a retiree in an eligible position, you must report the retiree each month until he terminates employment. You must transmit either:
- Status code "A" with compensation and hours, or
- Status code "B" if the retiree has no earnings for the month, but is still employed in an eligible position.
- Which retiree hours count toward the annual limit, earned or compensated?
- If an individual takes a normal retirement or takes an early retirement and doesn’t use the 2008 Early Retirement Factors (ERFs), any hours worked in an eligible position count toward the annual limit of 867 hours in a calendar year. All hours for which the retiree receives compensation are counted. This includes paid holidays or when compensatory time, sick leave or annual leave is taken in lieu of normal work hours. Sick leave or annual leave that is cashed out at the end of an employment period doesn’t count toward the limit. Cashed out compensatory time does count toward the limit. Hours worked in an ineligible position don’t count toward the limit.
- If an individual takes an early retirement using the 2008 ERFs, any hours worked for a DRS-covered employer before age 65 – whether in an eligible position, an ineligible position, as a substitute, or as a contractor – will stop the benefit. The benefit will stop the first of the month the retiree begins work and will restart the first of the month following the day the retiree stops work. At age 65, the rules described above will apply.
- However, if the individual is a Teachers’ Retirement System (TRS) retiree, the rules have temporarily changed. As a teacher who retired using the 2008 ERFs, the individual can return to work as a K-12 substitute teacher and continue receiving his or her TRS benefit during the first 867 hours the retiree substitute teaches each calendar year. Any hours worked in addition to that amount will suspend the retiree’s benefit. Any hours worked outside the role of K-12 substitute teacher will suspend the retiree’s benefit. This opportunity is available from June 10, 2016, through July 31, 2020.
- In what plan do I report a retiree?
- Retirees must be reported on the applicable system's transmittal report based on the position in which the retiree is working - not the system from which the employee is retired. For more information, refer to the New Hire Pyramid retiree section and the Employer Handbook, Chapter 5. If you still have questions, contact ESS.
School Districts and Educational Service Districts
- I have a teacher terminating employment at the end of the school term. Her last day of work is June 20, 2004. She will be paid through her contract which ends later in the summer. What should I report for an end date and when should I report it?
- For all TRS, all SERS, and PERS Plan 1 report the actual last day of work as the end date. In this case the end date would be June 20, 2004. However, most payroll systems will not allow you to send the summer payment information to DRS after an end date is reported. Transmit the end date with your last contractual summer payment data. Typically this is the transmittal sent to DRS in September.
- How do I report personal holidays?
- If a member uses a personal holiday, use an "A" status code. If a PERS 1 or TRS 1 member cashes out a personal holiday, use the correct cash out code. If the cash out occurs in the AFC and the contract allows for the member to have it factored into the benefit, it will generate an excess compensation billing. DRS needs to have a copy of the current contract on file.
- Do I report sick leave cash outs?
- A sick leave cash out for a school district or ESD employee is not reportable and is not included in the employee's retirement benefit calculation.
- How do I report substitutes?
- See School District and ESD Substitutes in the New Hire Pyramid for reporting charts, the DRS Notice, and application packets for school substitutes.
- What is the process to retire?
- A member requests an estimate of benefits from membership services within two years of retirement. Once created, the estimate is sent to the member often with a retirement packet. The member fills out the forms; sends them back; and in the retirement month, a Retirement Services Analyst calculates the benefit for payment. The pension is paid on the last working day of the retirement month.
- What if the Retirement Services Analyst doesn't have all of a retiring member's information? I have not reported the last month of earnings yet.
- We will proceed with the retirement. When the last information is posted such as last month of earnings or leave cash out for plan 1, a re-calculation of benefits will be performed and a retroactive adjustment will be made.
- I have a member who has eight years remaining until retirement. Is there a place I can refer members to view their accounts and estimate their benefits?
- Yes. Members can access their account information on the DRS website. They can view their plan summary, service credit detail, see a copy of their annual statement, view their employment history as well as create an estimate of benefits. And when they're ready, they can retire online.