"A participating employer shall be liable to the office for:
Any liabilities and expenses, including administrative expenses and the cost of increased benefits to members, resulting from the participating employer’s failure to correctly report and certify records under this section."
Utah Code Ann. § 49-11-603(3)
Employers are responsible for understanding both Tier 1 and Tier 2 eligibility requirements for each retirement system under URS. Misunderstanding these requirements could result in extra expense for the employer and misinformation about service on the member’s annual defined benefit statement. It is the employer’s responsibility to certify and report each employee who qualifies for membership in URS. Our office provides annual training sessions to give employers the tools needed to administer their employees’ retirement benefits and savings plans deposits accurately. We recommend all employees who send documents, contribution reports, or contribution payments to URS attend these training sessions every year.
Personnel and payroll records for employees should be kept for 65 years beyond the hire date, three (3) years beyond retirement from a URS retirement system or plan or the date of death, whichever occurs first. For a complete list of requirements, refer to the Records Retention section of this Guide.
Eligible employees not certified at the time of hire, or dropped from coverage in error, may qualify for a contribution adjustment calculation, which often includes a service adjustment. Adjustments are based on the eligibility requirements in effect at the time the service was rendered. For current requirements, refer to the Membership – Eligibility & Certification section. Adjustments consist of applications (contributions applied to an employee’s account due to underpayment) and reversals (contributions removed from an employee’s account due to overpayment).
Our office, not the employer, determines eligibility and the cost of an adjustment. If any part of an adjustment application request exceeds 90 days from the date of the earliest reporting period, interest is assessed on the entire application. In these cases, it’s important that our office calculates the cost of the adjustment.
Employers who certify an ineligible employee as eligible in error will be unable to recoup overpaid savings plans contributions and retirement contributions that trigger service credit application unless a Certification of Ineligibility (Form MERQ-7) is filed with our office within the 12-month contribution correction period limitation. Extensions to the 12-month contribution correction period for recouping these overpaid contributions can only be approved by the employee through use of the Employer Request to Recover Retirement Contributions (Form MEMS-52), available to employers on request.
Overstated retirement salaries that are identified within the 12-month contribution correction period will result in the reversal of the corresponding employer retirement and savings plans contributions to the employer’s clearing account. However, savings plans reversal credits to the employer will represent the reported contributions or the current market value at the time of processing, whichever is less.
Adjustment processing that is not limited by the 12-month contribution correction period may be limited by the four-year statute of limitations located in U.C.A. § 49-11-613.5. Additionally, our office may defer processing adjustments that result in a change of less than $25 in retirement contributions and/or $5 in savings plan contributions (i.e., 401(k), 457(b)) per employee for cost and efficiency reasons.
It is recommended that employers review their employees’ status regularly to ensure necessary corrections occur in a timely manner.
Adjustment applications and reversals should not be reported as part of the regular contribution file details, as this might be interpreted as a correction to the current pay period. Likewise, corrections to prior reporting periods should be separate from the current period. Instructions and worksheets for reporting corrections are available by calling Employer Services.
We strongly encourage employers to call Employer Services at 801-366-7318 or 800-753-7318, option 1, with questions on adjustments.
An employee may qualify for service credit following a judgment or settlement agreement in an employment dispute only when all the following requirements are met:
1. The judgment or settlement agreement must contemplate that the employee would have worked during a specific period in the past and include these dates;
2. The judgment or settlement agreement must require payment of retirement contributions in full, as determined by the Office, for that specific period, which must be in the past;
3. The Office shall calculate the retirement contributions to be paid on:
a. Salary that is the greater of:
i. The most recent hourly rate; or
ii. The highest hourly rate earned in the last full calendar year the employee worked; and
b. The number of hours worked that is the greater of:
i. The most recent number of hours the employee was scheduled to work each pay period (i.e. 80 hours per pay period); or
ii. The highest number of hours worked by the employee in the last full calendar year the employee worked;
4. The employer, employee, or the employer and employee combined have paid all the required retirement contributions as determined by the Office;
5. The employer is adjudicated or admits to some error or fault in the employment action, and any settlement is not merely a release of claims; and
6. The service credit requested otherwise meets all the other legal requirements.
Any adjustments or contributions made to a Defined Contribution Plan due to a settlement agreement must be in accordance with both state and federal law and rules set forth in the Plan.
U.C.A. § 49-11-1401 creates a means for the forfeiture of retirement service and employer-paid contributions on individuals who are convicted of felonies for employment-related offenses. This went into effect on May 10, 2016, and applies to felony convictions after that date and only for employment-related offenses. An employment-related offense is a felony committed during the performance of one’s employment or appearing to be under the employer’s authority.
Your office is required to provide immediate notice to our office at 800-753-7318 when you have an employee who is charged with a felony offense that is or may be employment-related. There is an option for retirement forfeiture matters within this phone line. A district attorney, a county attorney, the attorney general’s office, or the state auditor may notify our office and your office of these offenses, as well.
Notifying our office simply provides us with notice that pending changes may exist. We do not have the authority under this notice to stop benefits or withdrawals. Your office must pursue a court order to prevent access to the contributions or benefits until the felony case is determined.
Once the charges are resolved, your office is to provide notice again to our office. If the charges have been dropped or the employee is acquitted, this notification clears any URS internal flags or messages on the employee’s account related to the charges.
If the employee is convicted, your office must investigate to determine:
1. If the offense is employment related, and,
2. On what date the offense was initially committed. Your office must provide the employee with notice of the determination and the opportunity to appeal (as outlined in Utah Code section 63G-4, the Utah Administrative Procedures Act).
After the appeal period, your office is required to notify our office of the determination. If applicable, we will immediately enact a forfeiture of service, related employer-paid contributions, and other Title 49 retirement benefits for the period of the offense.
It is your office’s responsibility to report back to a district attorney, county attorney, attorney general’s office, or the state auditor, in cases where one of these entities was the initiating source of pending criminal charges, once an employee is acquitted or convicted of the employment-related offense. It is also your office’s responsibility to report back to the initiating source, once your office has concluded its responsibilities under statute.
1. Maintain personnel and payroll records that provide information necessary for us to determine a member’s eligibility. Be prepared to provide information about the employee in question. Refer to Records Retention section of this Guide for the type of information we may need.
2. Notify the Employer Services Department in writing as soon as a discrepancy between hire and eligibility dates is identified, or if eligible members’ coverage has accidentally been dropped. Proper written notification typically includes the employer contact’s name and both the employee’s name and Social Security number PLUS one of the following:
a. Payroll reports, by reporting period, for the affected period with an accompanying explanation of the changes to be made;
b. A spreadsheet outlining the appropriate changes listed by reporting period; or
c. A brief memo explaining, by reporting period, the changes to be made.
3. Mail, fax or send an encrypted email adjustment request to URS. Contact Employer Services at 801-366-7318 or 800-753-7318, option 1, to get a delivery fax number or email address. Adjustment requests via email are only accepted from a secured source; Employer Services can provide an encrypted email.
4. If an adjustment is needed, we will send the employer an invoice with a deadline for sending payment. Employers should not send payments on expired invoices. If the employee’s contributions have been overpaid, and the employer made the correction request within the guideline listed in the Note above, the overpayment will be reversed from the member’s account and deposited as a credit into the employer’s clearing account.
5. Send payment within the period specified on the billing letter. If our office calculates a large group adjustment, usually identified through a compliance review or an employer’s personnel status review, and the invoice would have an adverse effect on their current budget, the employer may request payment by installments. (See Appeals information.)
6. Include a copy of the billing letter if paying by paper check or authorize URS to use clearing account balances as payment by calling Employer Services at 801-366-7318 or 800-753-7318, option 1.