Following are the answers to a couple of questions MSBO Financial Strategies Conference participants asked during the questions and answers period portion of Office of Retirement Services (ORS) Director Phil Stoddard’s presentation.
First, when is the employer payment due on the bi-weekly report for ACH/Electronic Payment?
When ACH goes into production late summer 2010, the payment will still be due on the 20th of the following month. The schools have been advised that in November 2010, they are all anticipated to have transitioned to pay cycle payment. With pay cycle payment, the schools will pay contributions the day after they pay their employees.
ORS published an article in the Retirement Times Newsletter dated May 2009 titled,"ORS Begins ACH/Electronic Payment Project." This article provides further details including a time line. The link to this newsletter on the ORS Employer Reporting website is: http://www.state.mi.us/dmb/ors/emp/psru/EmployerNewsletter/May2009/May20...
A second question referred to estimating a pension payment when using miAccount as it appears to automatically include an increase in wages. What happens if the wages are flat or reduced?
When a customer estimates a pension in miAccount, it automatically projects the amount of service credit that will be earned based on the retirement effective date the user entered. Users can reduce this projection themselves in the tool (e.g., if they work part-time) and the system will accept the new number. If a user wants to increase the projection, the system stops them because a member cannot earn more than 1 year of service credit in a year.
The system also defaults to a 0% annual wage increase (i.e., no raises until retirement). Users can change this in whole values from 1% through 10% and whatever rate they choose is applied to every year between today and the retirement date entered.