Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This amendment clarifies the treatment of
employer contributions to employee Health Savings Accounts (HSAs) as salary
rate as defined in section
169.010, RSMo. The
amendment also rearranges some existing language and adds subsections to better
organize the regulation.
(1)
Each employer reporting to The Public School Retirement System of Missouri
shall report required data on employees and all contributions to the retirement
system using the Online Automated System Integrated Solution (OASIS).
(2) Employers shall use OASIS to report
salary payments made to all employees, contributions withheld from employees
included in the retirement system, and supporting information required by the
board of trustees. Transmission of data must be sent to the board of trustees
no later than ten (10) working days after the last day of each calendar month
of the school year in which salaries are paid.
(3) Employers of persons included in the
retirement system shall withhold from each salary payment issued to such
persons during the school year in which the services are rendered an amount
which is the percent of salary rate required by the contribution rate then in
effect; and employers shall transmit to the board of trustees, not later than
ten (10) days after the last day of each calendar month of the school year,
twice the amount withheld during the month.
(4) All deductions of contributions from
salary payments made by employers for the retirement system are declared and
shall be considered to be funds belonging to the retirement system; and no
employer shall refund or repay any contributions or any part of any
contributions so deducted to any employee for any cause but shall transmit all
contributions deducted, together with an equal amount, to the board of
trustees, which board shall settle all claims against funds so
deducted.
(5) All contributions
withheld from salaries paid to members along with an equal contribution of the
employer shall be transmitted to the board of trustees by check, bank draft,
electronic funds transfer, or any negotiable instrument collectible at par
through a bank in the state of Missouri, made payable to The Public School
Retirement System of Missouri.
(6)
If remittance of the full amount of both employee's and employer's
contributions which are due the retirement system is not received in accordance
with these regulations, it shall be considered a failure or refusal by the
employer to transmit such amount and suit for recovery of the amount may be
instituted as provided for in section
169.030,
RSMo.
(7) For purposes of
determining retirement contributions and benefits, salary rate includes medical
insurance premiums (including dental and vision) paid by the employer on behalf
of the member and payments made by the employer on behalf of the member to a
self-funded medical benefits plan. The employer shall withhold from the
member's salary and remit to the system contributions on any such premiums and
payments, along with matching employer contributions. The payment reported for
each member covered by a self-funded medical benefits plan shall be determined
by the employer.
(A) Salary rate also includes
payments made by the employer on behalf of the member to purchase an annuity,
or fund a deferred compensation plan, in lieu of medical insurance or a
self-funded medical benefits plan.
(B) Premiums and payments for prescription
drug, life, and other ancillary benefits determined separately from premiums
and payments for general medical benefits are not part of salary
rate.
(C) Beginning July 1, 2017,
premiums paid by the employer on behalf of the member and payments made by the
employer on behalf of the member to a self-funded medical benefits plan for
prescription drug coverage shall be included in salary rate as defined in
section
169.010, RSMo,
whether or not such premiums or payments for prescription drug coverage were
determined separately from premiums and payments for general medical benefits.
Contributions transmitted to the retirement system before July 1, 2017, based
on salary rates which either included or excluded employer-paid premiums or
payments to a self-funded medical benefits plan for prescription drug coverage
for members shall be deemed to have been in compliance with this section. The
retirement system shall not refund or adjust contributions or adjust benefit
determinations with respect to any period before July 1, 2017, solely because
of the treatment of employer-paid premiums or payments to a self-funded medical
benefits plan for prescription drug coverage for members.
(D) Beginning July 1, 2020, certain payments
made by the employer on behalf of a member to a Health Savings Account (HSA)
shall be included in salary rate as defined in section
169.010, RSMo,
whether or not such payments were determined separately from premiums and
payments for general medical benefits. Payments made by an employer to a
member's HSA shall be included in salary rate up to the amount that is offered
to all employer's employees and not to exceed the applicable annual HSA
contribution limit set by Internal Revenue Code for single coverage. The annual
contribution limit used will be the one in effect for the calendar year in
which a plan year begins. Contributions transmitted to the retirement system
before July 1, 2020, based on salary rates which either included or excluded
employer payments to a member HSA shall be deemed to have been in compliance
with this section. The retirement system shall not refund or adjust
contributions or adjust benefit determinations with respect to any period
before July 1, 2020, solely because of the treatment of employer-paid HSA
contributions.
(E) Salary, salary
rate, or compensation as defined in section
169.010, RSMo, shall
not be reduced due to premium rebates or refunds received by the employer as a
result of the implementation of the "Patient Protection and Affordable Care
Act,"
Public Law
111-148.
(8) Retirement contributions which are
withheld from compensation paid to members after June 30, 1989, shall be deemed
to have been picked up by the employer within the meaning of section 414(h)(2)
of the Internal Revenue Code. The contributions shall be
withheld and credited to member accounts in accordance with the provisions of
sections 169.010-169.140, RSMo, but shall be considered to have been picked up
by the employer solely for the purpose of sheltering the contributions from
federal income tax until paid by the retirement system in the form of a refund
or other benefits. The contributions shall be subject to refund or benefit
claims by either the member or his/her surviving beneficiary in the same manner
as any other contributions in the member's account with the retirement system.
In reporting the contributions to the retirement system, every employer
included within the retirement system shall certify that-1) the employee
contributions were picked up by the employer in lieu of being paid directly to
the employees and 2) the employees had no option to receive the contributions
directly. The salary reported to the retirement system for each employee shall
include the contributions withheld, and the total contributions withheld and
reported shall equal the percentage of that salary required under the
then-prevailing contribution rate. In withholding and reporting federal income
tax to taxing authorities, however, the employer shall exclude from taxable
compensation the retirement contributions withheld. Nothing in this rule shall
be construed in any way as affecting eligibility for, the amount of, or the
process of paying any refund or benefit payable to either the member or his/her
surviving beneficiary.
(9) The
terms "salary," "salary rate," and "compensation" are synonymous when used in
regulations promulgated by the board, unless the context plainly requires a
different meaning.
(A) For purposes of
calculating contributions and benefits, those terms mean the regular
remuneration earned by a member as an employee of any covered district during a
school year, including (unless excluded by subsection (9)(B)):
1. Salary paid under the terms of the basic
employment agreement;
2.
Wages;
3. Payments for extra
duties, whether or not related to the employee's regular position;
4. Overtime payments;
5. Career ladder payments made pursuant to
sections
168.500
to
168.515,
RSMo;
6. Supplemental salary paid
in addition to workers' compensation;
7. Medical benefits as specified in section
(7) of this rule;
8. Payment for
annual leave, sick leave, or similar paid leave actually used by the
member;
9. Payment for leaves of
absence if at least one hundred percent (100%) of previous contract
rate;
10. Compensation on which
taxation is deferred under Internal Revenue Code (IRC) section
401(k), 403(b), 457, 414(h)(2), or similar plans established by the employer
under the IRC;
11. Salary
reductions for purposes of a plan established by the employer under IRC section
125; and
12. Other similar payments
that are earned by a member as an employee of any covered district during a
school year.
(B) Salary,
salary rate, and compensation do not include:
1. Payments for services as an independent
contractor, or any other payment that must be reported on IRS form
1099-MISC;
2. Payments made by an
entity that is not a covered employer and reported to the IRS under that
entity's tax identification number;
3. Payments made for unused annual, sick, or
similar leave time, except as provided by section
104.601,
RSMo;
4. Payment for leaves of
absence if less than one hundred percent (100%) of previous contract rate,
except as provided in section
169.055
or
169.595,
RSMo;
5. Extraordinary payments
such as bonuses, awards, and retirement incentives;
6. Consideration for agreeing to terminate
employment, including retirement incentives, retirement or separation notice
incentives, or any other payment(s) received by an employee in exchange for
agreeing to terminate employment, regardless of if the employee is required to
also perform extra duties as a condition of receiving the payment(s);
7. Fringe benefits, except medical benefits
as described in section (7) of this rule;
8. Any other payment that is not part of the regular
remuneration earned by a member as an employee of a covered district during a
school year; and
9. Payments
resulting from employment disputes including severance pay, back pay awards,
payments in settlement of employment contract disputes, payments in
consideration for agreeing to terminate employment, and payments in settlement
of other employment disputes.
(C) While an individual is employed in a
position covered by the system, compensation received from all employers
participating in the system will be used to determine contributions and
benefits. Compensation includes payments for services rendered during the
regular school session, summer school, or interim periods. Individuals may not
have compensation covered by both Public School Retirement System (PSRS) and
Public Education Employee Retirement System (PEERS) for the same period;
provided, individuals who contributed to both systems on compensation for the
same period during the 1996-97 school year may elect in writing to continue
that status. The election is irrevocable and must be made before September 30,
1997.
(D) In determining "final
average salary" as defined in section
169.010, RSMo, the
system will disregard any increase in compensation in excess of ten percent
(10%) from one (1) year to the next in the final average salary period. This
limit will not apply to increases due to bona fide changes in position or
employer, increases required by state statute, or district wide salary schedule
adjustments for previously unrecognized education related service.
(E) In determining "final average salary" as
defined in section
169.010, RSMo, the
system will disregard any increase in compensation in excess of ten percent
(10%) from one (1) year to the next in the final average salary period. This
limit will not apply to increases due to bona fide changes in position or
employer, increases required by state statute, or district wide salary schedule
adjustments for previously unrecognized education related service.
