Covered Employer Training Program

1. Covered EmployerTraining Program Module Three The Reporting Process

2. Active Member Contributions • Your employees who are South Carolina Retirement System (SCRS), Police Officers Retirement System (PORS), and State Optional Retirement Program (State ORP) participants contribute 6.5 percent of gross pay into their respective retirement plan. Follow along in your Covered Employer Procedures Manual! Page 25

3. Employer Contributions Effective July 1, 2012, the SCRS and PORS rate will increase another 0.145 percent and 0.2325 percent, respectively. Page 26

4. Contribution Rate Changes • If an increase in the employercontribution rate occurs, apply the increased rate based on the date the money was paid. • If an increase in the employeecontribution rate occurs, apply the increased rate to when the money was earned. Page 28

5. Contribution Requirements • Salary or wages • Contributions due on gross pay, before taxes • Wages paid while on sick or annual leave • Unused annual/general leave • Contributions are deductible on up to and including 45 days of termination pay for unused annual/general leave Page 28

6. Contribution Requirements • Overtime and compensatory time • Contribution limit: • Applies to employees who became members after December 31, 1995. • The limitation for calendar years 2009 and 2010 is $245,000. Page 28

7. Wages Not Subject to Contributions • Payments out of the regular salary base • One-time bonus and incentive-type payments • Retirement incentive payments • Long-term disability benefits • Payments for unused sick leave • Payments for more than 45 days of unused annual leave at termination • Payments for unused annual leave while the member remains in service Page 30

8. Electronic Employer Services (EES) • EES is an efficient, secure on-line tool to assist you in your contribution reporting. The Retirement Systems is continually adding features and improving EES functionality, so be sure to check for updates. Currently employers can: • Prepare monthly and quarterly deposit forms • Upload quarterly report data • Prepare and submit EES-ER quarterly reports • View transaction errors • Key retiree return to work dates • Upload furlough supplements Page 31

9. Electronic Employer Services (EES) • Employers now have the ability to: • Submit certification of final retirement information (data currently provided on Form 6202). • Retrieve Retirement Systems data regarding your employees (“data downloads”): • Active Service Totals • Ready Set Go • Working Retirees

10. Obtaining Access to EES • Complete an Electronic Employer Services (EES) Employer Confidentiality Agreement (Form 6503), an Electronic Employer Services (EES) Authorizing Contact Designation/Agreement (Form 6504), and an Electronic Employer Services (EES) Designated Agent Confidentiality Agreement (Form 6505) and return them to our office. • A user identification (USERID) and a personal identification number (PIN) will be provided for access to this secure website. Page 31

11. RemittancesDoes not pertain to those on Comptroller General’s (CG) payroll system • Employers must remit employer and employee contributions to the Retirement Systems on a monthly basis • You can send a paper check, wire the money, or have it debited from your account. Please contact Patricia Miller at 803-737-6904 for more information about wires and debits. The Authorization Agreement for Automatic Debits (Form 1226) will be required for automatic debits. • Remittances must be in our office on the due date (not postmarked on the due date). Page 27

12. Due Date CalendarDoes not pertain to those on CG’s payroll system • Every July, an Employer Updateis sent to all covered employers, which includes the Due Date Calendar (Form 1341) and all of the green envelopes you will need for the year. Page 33

13. Monthly and Quarterly Deposit FormsDoes not pertain to those on CG’s payroll system • Deposit forms are pre-filled with employer contribution rates. • Deposit forms are bar coded with the employer code and date information. It is important to use the form that corresponds with the appropriate month. • Before sending the deposit form, be sure to complete the contact person, signature, telephone, and date. • The “Employer Reporting” link includes status updates and verifies confirmation of receipt for deposits. Page 33

14. Monthly Deposit ProcessDoes not pertain to those on CG’s payroll system For the first two months in a quarter • Refer to the Due Date Calendar • If you are reporting contributions on a Monthly Deposit form: • Mail or fax the Monthly Deposit of Retirement Contributions (Form 1244), which you completed through EES and printed as a PDF document; and • Mail the remittance (if you have authorized ACH, fax the deposit form by the due date OR if you have authorized debit from your account, fax the deposit form by noon the day before the due date) Page 34

15. Quarterly Deposit ProcessDoes not pertain to those on CG’s payroll system Last month in a quarter Refer to the Due Date Calendar. If you are reporting contributions on a Quarterly Deposit form: Mail or fax the Quarterly Deposit (Form 1246) you completed in EES and printed as a PDF document; and Mail the remittance (if you have authorized ACH, fax the deposit form by the due date OR if you have authorized debit from your account, fax the deposit form by noon the day before the due date); and Quarterly payroll information should be uploaded via EES or submitted via EES-ER. Page 34

16. Printing Your Deposit Forms • When you complete your monthly or quarterly deposit form on EES, it is important to click the “Create PDF” button at the bottom of the screen before printing so that the form prints properly. • The form is not sent to the Retirement Systems via the Internet. You must print and mail the form along with your remittance. Page 33

17. Late Payments • The Retirement Systems will notify an employer if the monthly remittance is not received within 10 days of the due date. • Late remittances are subject to interest charges. • The interest rate is based on the adjusted prime rate (as of March) and is updated annually in July. • Employers will also be notified if the quarterly payroll information is not received within 10 days of the due date. • For updates regarding received dates of deposits and quarterly payroll information, select “Employer Reporting” on the EES website. Page 33

18. Quarterly Payroll InformationDoes not pertain to those on CG’s payroll system There are two ways to submit quarterly payroll information through EES: Upload a text (.txt.) document Process and submit an EES-ER report There are instructional videos available on the EES website to guide you through the process. The submission of magnetic media through the mail is prohibited due to the Financial Identity Fraud and Identity Theft Protection Act effective July 1, 2009. Page 34

19. Posting Service Credit • Service credit is awarded to members based on monthly compensation and dates of employment (taken from reported contract length and months paid information). • State ORP members are not awarded service credit. Page 37

20. Posting Service Credit • Monthly Compensation Threshold • Currently $580/month effective October 1, 2009 • Threshold increases in conjunction with increases in the federal minimum wage. Minimum wage x 80 hours per month = threshold. Page 37

21. School Districts and Contract Lengths • It is very important to consider the implications of changing an employee's contract length before the fiscal year ends. • If, in the September quarterly report, you report an employee on a 10-month contract, then the employee's service credit will be edited so that by the end of the school year, she will have earned one full year. The employee earns 1/10th of a year of service for each month paid. • If you change the contract length to 11 or 12, for example, then the employee will be short service credit for the year. • Refer to the Contract Period Chart found in your Covered Employer Procedures Manual, Page 32. Page 39

22. Electronic Employer Services (EES) You can select “Employer Reporting” to view items that are due and initiate your contribution reporting (does not apply to agencies on the CG’s payroll system). Errors on your reports can be found by selecting “Employer Transaction Error List.” Page 31

23. Electronic Employer Services (EES) It is very important to resolve errors as soon as possible. By checking errors, employers can ensure all records are posted in a timely manner. Any questions can be referred to your employer representative.

24. Electronic Employer Services (EES)Clearing Reporting Errors After a report has been received and the records have been released for posting to individual accounts, the Employer Reporting representative will review records in an “error” status. Employers can view the same error screen as our staff. From the EES main screen, select“Employer Transaction Error List.” The next screen displays transactions in an error status. Select the “Trans Code” to view the detail for each record. Many errors involve missing enrollment dates, name changes, retirees for whom the Retirement Systems needs a current return to work date, and money errors. If you don’t understand an error message, a help screen is available. Page 42

25. Corrections to Quarterly Reports If a service or contribution error was made on a past report, you can correct the reporting by submitting a Supplemental Contribution Report (Form 1227). When completing Form 1227, fill out the top portion by listing your five digit employer code, the name of your entity and the reason for the supplement. When completing Section I of the form, follow the instructions on the second page. Enter only one fiscal year per form.

26. Corrections to Quarterly Reports(continued) Section II is the calculation of the amount due, or the credit. Apply employer rates for the fiscal year, incidental death benefit, and accidental death program rates. Add these amounts to the member contribution and calculate the total amount due, or the credit. Be sure to sign Form 1227 and include a phone number. Fiscal Year Contribution Rates for Employers and Members (Form 1340) may be useful as you calculate the totals on the supplement. For agencies on the CG’s payroll system - corrections to State ORP accounts need to go through the CG’s office. They will remit the appropriate amounts of money to the Retirement Systems and the State ORP vendor.

27. Corrections to Quarterly Reports(only pertains to those on CGpayroll system) If a member should be State ORP but the money on the quarterly report was submitted as SCRS, the Retirement Systems will adjust the posting and send to the CG’s office. The CG will forward the proper remittance to the State ORP vendor. If a member should be SCRS but the money on the quarterly report was submitted State ORP, the Retirement Systems will adjust the posting and notify the employer to correct the payroll record for future deductions. The employer will be billed for additional member and employer contributions due SCRS. The employer is responsible for working with the CG’s office to recoup money from the State ORP vendor.

28. Corrections to Quarterly Reports(only pertains to those on CGpayroll system) If a member should be PORS and is submitted SCRS, SCRS will adjust the quarterly report and bill the employer for the contribution difference. Likewise if the member should be SCRS and is submitted as PORS, the Retirement Systems will issue a credit to the employer for the contribution difference. If a member switches systems (SCRS to PORS, or PORS to SCRS), a new Enrollment Form (Form 1100) must be submitted to the Retirement Systems to ensure proper credit.

29. Supplemental Service Report(Form 1224) • This form is used to report contributions for members who are in a specific type of leave without pay who wish to continue their contributions. • Examples: • Military leave (USERRA) • Workers’ Compensation Page 44

30. Furlough Supplements(applies to state agencies, k-12 schools, and institutions of higher education) • Agencies who institute a furlough program should remit the member and employer retirement contributions for SCRS, PORS, and State ORP participants. • No furlough contributions are due for Teacher and Employee Retention Incentive Program (TERI) participants or other working retirees. • Contributions are based on the rate of salary immediately prior to a furlough period. • The supplements can be uploaded in Excel or text format to our secure EES website, www.retirement.sc.gov/ees. Page 46

31. Working Retiree Contributions • TERI program participants and retirees who return to work for a covered employer must pay contributions at the same rate as an active member. • Additional service credit will not be accrued. • The contributions will be credited to the member’s account and upon death, any remaining contributions that have not been exhausted through benefit payments will be paid to the beneficiary. Page 27

32. Working Retiree Contributions Notification of Employed Retiree The Retirement Systems must track the date an employee returns to covered employment after their date of retirement. Employers should enter the return to work date in EES. If the member works for a period of time, then skips a quarter before returning, a new hire date must be submitted. If a TERI participant ends TERI, and then returns to covered employment, a new date (after TERI termination) must be submitted. Page 27

33. Working Retiree Contributions The Retirement Systems needs the Notification of Employed Retiree (Form 1114) in two situations: If the employee is a disability retiree, Form 1114 must be completed and mailed or faxed to us. You must include the employee’s salary/pay on this form. If a return to work retiree has a name change, the date should be provided via Form 1114. More information about entering return to work dates in EES is covered in the EES module of this training. Page 27

34. Working Retiree Contributions If an SCRS retiree, without a PORS account, returns to work in a PORS position: retiree and employer pay the SCRS rate If a PORS retiree without an SCRS account returns to work in an SCRS position retiree and employer pay the PORS rate If a working retiree is receiving both an SCRS and a PORS retirement benefit, the working retiree will remit contributions to the system into which an active member employed in the position would normally contribute.

35. Annual Leave Payments for TERI Participants • No annual leave payment is included at the beginning of TERI participation. • Contributions should be deducted on up to 45 days of the annual leave payment at TERI termination. • The average final compensation (AFC) at the end of TERI will be recalculated to include unused leave paid at the termination of TERI. Page 30

36. Employer Reporting Representatives Our Employer Reporting Department has staff assigned specifically to your particular employer code. See the Notice included with the July Employer Update for your representative’s name and contact information. Pages 9

37. Summary Quiz • If you do not already have access to EES, how do you obtain a USERID and a PIN? • What is the contribution rate for members of SCRS, PORS, State ORP, and working retirees? • What is the base employer retirement contribution rate for SCRS, PORS, and State ORP?

38. Disclaimer THE LANGUAGE USED IN THIS PRESENTATION DOES NOT CREATE ANY CONTRACTUAL RIGHTS OR ENTITLEMENTS AND DOES NOT CREATE A CONTRACT BETWEEN THE MEMBER AND THE SOUTH CAROLINA RETIREMENT SYSTEMS. THE SOUTH CAROLINA RETIREMENT SYSTEMS RESERVES THE RIGHT TO REVISE THE CONTENT OF THIS PRESENTATION. This presentation is meant to serve as a guide but does not constitute a binding representation of the South Carolina Retirement Systems. The statutes governing the South Carolina Retirement Systems are found in Title 9 of the South Carolina Code of Laws, and should there be any conflict between this presentation and the statutes or Retirement Systems’ policies, the statutes and policies will prevail. Employers covered by the South Carolina Retirement Systems are not agents of the Retirement Systems.

39. Questions