april 13-16, 2016 how to prepare for and survive a calpers ... · april 13-16, 2016 how to prepare...
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APRIL 13-16, 2016
How to Prepare for and Survive a CalPERS Review Renee Ostrander, Chief
Anthony Suine, Chief
THESE MATERIALS HAVE BEEN PREPARED BY CalPERS
THEY HAVE NOT BEEN REVIEWED BY STATE CASBO FOR APPROVAL, SO THEREFORE ARE NOT AN OFFICIAL STATEMENT OF CASBO
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 2
CalPERS Reviews
• Increased reviews over the last few years
• Anticipating additional increases in coming years
• Anticipating different “focus” reviews
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 3
CalPERS Review
• Objectives of a review
• How employers are selected
• Benefits to employer and employees
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 4
Common Audit Findings - Membership
• Enrollment • Immediate Membership • Temporary Employee Eligibility • Prior Membership
•Member Reciprocal Self Certification Form
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 5
Common Audit Findings - Membership
• Incorrect Enrollment of Affiliated Agency Employees • Common Law Employment • Correction of CalPERS Retirement Enrollment and
Payroll
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 6
Common Audit Findings - Compensation
•Classic/New • Pensionable Compensation Regulations • Interim Reporting
•Publicly Available Pay Schedules
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 7
Common Audit Findings - Compensation
• Special Compensation • Uniform Allowance • Bonus • Longevity Pay • Holiday Pay • Temporary Upgrade • Final Settlement Pay
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 8
Common Audit Findings – Post Retirement
• Limited duration • GC 21221(h)
• GC 21224
• 180-day wait period • Exclusions apply
• Resolution can be filed
• No waiver for Retirement Incentive
• 960 hour maximum per fiscal year, regardless of position • No exceptions
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 9
Common Audit Findings – Post Retirement (cont.)
• Retiree compensation • Salary must be within posted salary range
• No additional benefits
• Independent Contractor vs. Employee • Common Law Control Test
• Retired annuitants should be enrolled in mylCalPERS • Allows for validation of wait period(s)
• Tracks hours worked to ensure compliance
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 10
Closing a Finding – Documentation Required
• Publicly available pay schedule
• Labor agreements/Memorandum of understanding (MOU)
• Employment Contracts
• Board Meeting Minutes
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 11
Closing a Finding – Documentation Required
• Employer Resolutions
• Personnel Action Form (PAF)
• Job Duty Statement
• Payroll Information
• Other
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 12
Resources – Circular Letters
• 200-062-12 • Details of Pensionable Compensation for New Members
• 200-065-14 • Common Membership Findings in Employer Reviews
• 200-064-14
• Common Compensation Findings in Employer Reviews
• 200-002-14
• Post Service Retirement Employment Requirements
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 13
Resources - Other • [email protected]
• CalPERS Publications • Employment After Retirement (Pub 33)
• Reinstatement From Retirement (Pub 37)
• CalPERS Website • 180-day wait period resolution samples
APRIL 13-16, 2016
CalPERS Current Topics and Issues Renee Ostrander, Chief
Anthony Suine, Chief
THESE MATERIALS HAVE BEEN PREPARED BY CalPERS
THEY HAVE NOT BEEN REVIEWED BY STATE CASBO FOR APPROVAL, SO THEREFORE ARE NOT AN OFFICIAL STATEMENT OF CASBO
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 16
Retirement Options Simplification Current State
• 13 Retirement Options: 6 statutory, 7 regulatory (Option 4s)
• Statutory Options
• Unmodified - Highest Benefit Payable
• Option 1 - Return of Member Contributions
• Option 2W - 100% Joint Lifetime Benefit
• Option 2 - 100% Joint Lifetime Benefit with pop up if bene dies first
• Option 3W - 50% Joint Lifetime Benefit
• Option 3 - 50% Joint Lifetime Benefit with pop up if bene dies first
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 17
Retirement Options Simplification
Current State (cont.)
• Regulatory Options
• Reduction upon Death of Retiree or Named Beneficiary
• Reduced Allowance for a Fixed Period of Time
• Specific Percentage to a Beneficiary
• Specific Dollar Amount to A Beneficiary
• Multiple Lifetime Beneficiaries
• Option 3W and Option 1 Combined
• Option 2W and Option 1 Combined
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 18
Retirement Options Simplification
Evaluation Criteria
• Cost Effectiveness Measurement Benchmarking
• Option Election Frequency
• Option Election Similarities
• Member and Beneficiary Impact
• Administrative and CalPERS Staff Impact
• Legislative and Regulatory Impact
• Board Authority
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 19
Retirement Options Simplification - AB2404
Recommendation
Unmodified
Option 1
Option 2w+1
Option 3w+1
Flexible Beneficiary Option
Benefits Challenges
Extreme member simplification Legislative requirements
Mitigate member risk my|CalPERS system changes
Simplified administration Staff education
Reduce actuarial risk Member education and materials
Consistent options with CEM Peer Group Temporary increase in inquiries
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 20
Charter School Updates
• IRS/Treasury Dept Draft Regulations • Public Agency Questionnaire
• Denials
• Pending Reviews
• Relief Notice
• Revised Review Process • New School Questionnaire
• Certification Form
• Current Service Levels
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 21
Payroll Updates
• Circular Letter 200-014-16
• Verification of Payrates • $20,000 – Employer Verification
• $30,000 – Employer and CalPERS Verification
• Identification of Special Compensation • Payrate and Special Compensation Separated
• No Unknown
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 22
Reporting as Earned – GC 20636.1
180 work days at 8 hours 1,440
15 vacation days 120
12 holidays 96
Total hours 1,656
Contract Date 8/23/15 - 6/11/16
Contract Amount $24,840
1,656 hours at $15/hour = $24,840
Full Time Monthly Pay Rate would be $2,600 ($15 * 173.33 hours)
Full Time is 173.33 hrs/mo, 2,080 hrs/yr or 260 days/yr
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 23
Reporting as Earned - Incorrect Reporting
MonthPay
RateMember Earnings
Sevice Credit
Earned
July $0.00 $0.00 0.000
August $0.00 $0.00 0.000
September $2,600.00 $2,484.00 0.960
October $2,600.00 $2,484.00 0.960
November $2,600.00 $2,484.00 0.960
December $2,600.00 $2,484.00 0.960
January $2,600.00 $2,484.00 0.960
February $2,600.00 $2,484.00 0.960
March $2,600.00 $2,484.00 0.960
April $2,600.00 $2,484.00 0.960
May $2,600.00 $2,484.00 0.960
June $2,600.00 $2,484.00 0.960
Totals $26,000.00 $24,840.00 9.6
Final Compensation = $26,000/12 = $2,167
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 24
Reporting as Earned - Correct Reporting Method #1
MonthPay
RateMember Earnings
Sevice Credit
Earned
July $0.00 $0.00 0.000
August $2,600.00 $960.00 0.369
September $2,600.00 $2,484.00 0.955
October $2,600.00 $2,484.00 0.955
November $2,600.00 $2,484.00 0.955
December $2,600.00 $2,484.00 0.955
January $2,600.00 $2,484.00 0.955
February $2,600.00 $2,484.00 0.955
March $2,600.00 $2,484.00 0.955
April $2,600.00 $2,484.00 0.955
May $2,600.00 $2,484.00 0.955
June $2,600.00 $1,524.00 0.586
Totals $28,600.00 $24,840.00 9.6
Final Compensation = $28,600/12 = $2,383
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 25
MonthPay
RateMember Earnings
Sevice Credit
Earned
July $0.00 $0.00 0.000
August $2,600.00 $2,258.00 0.868
September $2,600.00 $2,258.00 0.868
October $2,600.00 $2,258.00 0.868
November $2,600.00 $2,258.00 0.868
December $2,600.00 $2,258.00 0.868
January $2,600.00 $2,258.00 0.868
February $2,600.00 $2,258.00 0.868
March $2,600.00 $2,258.00 0.868
April $2,600.00 $2,258.00 0.868
May $2,600.00 $2,258.00 0.868
June $2,600.00 $2,258.00 0.868
Totals $28,600.00 $24,838.00 9.6
Final Compensation = $28,600/12 = $2,383
Reporting as Earned - Correct Reporting Method #2
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 26
Reporting as Earned - Retirement Calculation Comparison
Incorrect Method
• Benefit Factor =
2% x 20 = 40%
• Final Comp =
$2,167
• Retirement Allowance = $2,167 x 40%
= $866/month
Correct Method
• Benefit Factor =
2% x 20 = 40%
• Final Comp =
$2,383
• Retirement Allowance = $2,383 x 40%
= $953/month
2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 27
Converting Hourly Pay Rates • Monthly Pay and Hours
• $20.00/hr @ 151 hours
• You Increase Pay Rate based on 40 hours per week (*173.33)
• $20.00 * 173.33 = $3,467 ($22.96)
• You report $22.96/hr @ 151 hours
• We Increase Pay Rate based on 40 hours per week (*173.33)
• $22.96 * 173.33 = $3,980 ($26.35)
• Final Compensation is now based on $26.35 per hour instead of $22.96