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Salary Floor Division of Retirement and Benefits.

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Presentation on theme: "Salary Floor Division of Retirement and Benefits."— Presentation transcript:

1 Salary Floor Division of Retirement and Benefits

2 Salary Floor Statutory Requirement AS (a)(2) established a June 30, 2008 Salary Floor which reads as follows: AS CONTRIBUTIONS BY EMPLOYERS (a)Each employer shall contribute to the system every payroll period an amount calculated by applying a rate of 22 percent of the greater of the total of all base salaries continued

3 Salary Floor (1) paid by the employer to employees who are active members of the system, including any adjustments to contributions required by AS ; or (2) paid by the employer to employees who were active members of the system during the corresponding payroll period for the fiscal year ending June 30, 2008.

4 Salary Floor Applies to PERS Only The Salary Floor provision applies to PERS employer contributions only.

5 Salary Floor What does this mean for an employer? Employers submit employer contributions under AS (a) along with every payroll submitted to the Division. On an annual basis, the Division will determine if additional contributions are due under AS (b).

6 Salary Floor How is the annual salary floor billing calculated? Step 1 The Division will determine Gross Salaries for the fiscal year ending June 30, 20XX. Encompass all pay periods that have an end date during the given fiscal year. Any salary adjustments submitted during the year will be included in Gross Salaries. Salaries for terminated positions will be included in the Gross Salary amount.

7 Salary Floor How is the annual salary floor billing calculated? Step 2 Gross Salaries for the fiscal year calculated under Step 1 are compared to the June 30, 2008 salary floor. Each PERS employer should already have a record of their June 30, 2008 salary floor. continued

8 Salary Floor If the Gross Salaries for the fiscal year is greater than the June 30, 2008 salary floor – no additional amount due. If the Gross Salaries for the fiscal year is less than the June 30, 2008 salary floor – then additional contributions are due.

9 Salary Floor How is the annual salary floor billing calculated? Step 3 Assuming Gross Salaries for the fiscal year are less than the June 30, 2008 salary floor, then the difference in salaries is multiplied by 22% to determine the amount due.

10 Salary Floor How is the annual salary floor billing calculated? Example City in Alaska has a June 30, 2008 salary floor of $1,000,000 and June 30, 2011 gross salary amount of $990,000. $1,000,000June 30, 2008 Salary Floor 990,000June 30, 2011 Gross Salary $10,000Amount under Salary Floor X.22 $2,200Additional employer contributions due under AS (a)(2)

11 Salary Floor Other Important Items To Note All Employers should have received notification of their June 30, 2008 salary floor in July Additional employer contributions due under the salary floor statute are assessed interest if not paid by the due date. Future billings will take place in the fall of each fiscal year.

12 Salary Floor Questions?


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