Employer Costing for ERS Rehired Retiree FAQ
SB176 Employer Cost
1. What are the employer costs dictated by SB176 based on?
GA Senate Bill 176 introduced an employer cost associated with ERS retirees’ return to state employment. The costs are based on the retirees’ contribution group at retirement and the contribution rate and salary earned during the period the retiree is back at work.
2. When are the employer costs for SB176 effective?
The employer costs introduced by SB176 are effective on and after 01/01/2021.
3. What is the rate of the employer costs for Rehired Retiree? Does it include GTLI?
The rate of the employer costs introduced by SB176, is based on the ERS contribution rate (employee, pickup and employer) minus the GTLI rate during the period the retiree is back at work.
- For an Old Plan retiree who worked in 07/2020, the rate is 1.25% + 4.75%-$7.00+19.91% = 25.91%-$7.00
- For a New Plan retiree for the same period the rate is 1.25%+24.66%= 25.91%
- For a GSEPS retiree for the same period the rate is 1.25%+21.57%= 22.82%
4. How can an employer identify a retiree’s contribution group at retirement?
- Log on to the ERSGA Employer Desktop
- Select Check Plan Member Plan Eligibility
- Select ERS
- Enter possible hire date
- Enter SSN
- Click Retrieve
Where the Membership Status displayed is Retired, the Current Contribution Group displayed is the contribution group at retirement.
5. What is the calculation of employer costs associated with SB176? Is there a difference for part-time or fulltime employees?
The calculation of the employer costs under SB176 is the ERS contribution rate minus GTLI rate times the employer earned salary during the period the retiree is back at work. The calculation is the same for all ERS retirees returning to state employment, regardless of employment status (fulltime or part-time).
6. Are all employers subject to the Employer costs for ERS Rehired Retirees? What about Community Service Boards and Public School employers?
All employers under the definition provided in GA Code section 47-2-1 are subject to SB176. This also includes the last employer at retirement and all actively reporting employers. This may include Community Service Boards and GA Public Schools.
7. Will retirees be required to pay any contributions?
No. Employers are solely responsible for the costs associated with SB176. ERS retirees returning to state employment are not responsible for any costs.
Effect on Rehired Retirees
8. Do these changes apply to all retirees?
Yes. The changes introduced under SB176 apply to all ERS retirees returning or returned to state employment.
9. If an ERS Retiree is paid as an independent contractor, is the employer required to pay the Employee and Employer contributions?
Under SB176, an employer is NOT required to pay the employer cost ONLY if the Employer certifies the ERS retiree is an independent contractor who meets ALL the following criteria:
- contracting person or entity has multiple employees
- contracting person or entity has multiple contracts and the contracts are not limited to employers as defined in O.C.G.A 47-21-1
- the contractual relationship with the employer was not created to allow a retiree to continue employment after retirement in a position similar to the one held before retirement
Note: Independent contractor is defined as a person or entity contracted to perform work for—or provide services to—state employer as a nonemployee.
10. How does SB176 change the previous return to work restrictions?
The return-to-work restrictions prior to SB176 remain the same.
- A retiree must wait to return to employment. One month for normal retirement or two months for early retirement
- A retiree would continue to receive their retirement benefit as long as they do not exceed 1040 hours worked within the calendar year
- A retiree returning to state employment would not earn any additional creditable service in the retirement system
11. I have employees retiring soon. How does this affect them?
The costs associated with SB176 are the sole responsibility of employers. There is no impact to employees who have retired or those retiring in the future.
12. Does a rehired retiree earn additional service or benefits?
No. The retiree does not earn additional service or benefits.
13. Will an employer be required to enroll retirees into a pension plan?
No. A retiree is no longer eligible for enrollment in the ERS pension plan. The cost associated with SB176 is the sole responsibility of the employer.
14. Will these changes require system changes?
ERS does not expect any employer system changes but there will be changes to the ERSGA Employer desktop. Rehired Retiree reporting remains the same however, starting with 01/2021 reporting invoices will be created for the employer costs.
15. Will the file layout change?
The Rehired Retiree file layout will not change.
16. Will the information for the rehired retirees along with the remittance be processed through the ERS contribution file and fund submission?
The process of Rehired Retiree Reporting of salaries earned and hours worked remains the same. Invoices for employer costs associated with SB176 will be created based on the employer-approved-rehired-retiree data. The submission of payment is similar to the payment submissions for normal monthly reporting of active members and forfeited leave certifications.
Training and Communication
17. Will there be training for employers?
Yes. Once the changes to the Employer Desktop have been made, ERSGA will schedule employer training sessions.
18. Will ERS notify these employees of this provision?
Yes. ERSGA will communicate these changes in the next Retiree Retirement Minute.