Understanding the Maine Public Employees Retirement System (MainePERS)

Introduction:

This topic describes the maintenance programs, reports, and calculations for the Maine Public Employees Retirement System (MainePERS).  The MainePERS is an independent public agency of the State of Maine, which administers retirement plans that cover state employees, public school teachers, legislators, judges, and employees of municipalities and other public entities called participating local districts (PLDs).

Tips:

• For more information about Maine's retirement system, refer to www.mainePERS.org.

• For detailed instructions for the MainePERS fields, refer to the appropriate Maine Public Employees Retirement (MainePERS) System Payroll Reporting Manual.

Implementing MSRS:

The following sections include the information for setting up and using the MainePERS in Payroll.  They also include brief descriptions of the reports that print the MainePERS data and the flow of the monthly retirement programs.

To see information about...

• Setting Up Payroll for the MainePERS, click More.

   

  During the software installation, NDS Technical Support will assist you in setting up Payroll to process your MainePERS information.  The following maintenance programs contain fields relating to the MainePERS:

  • Retirement Table Maintenance (RET%nn):  Contains the general rates and amounts used to calculate the retirement contributions and insurance premiums.  You must create a separate table for each Retirement Code.

  • Employee Master Maintenance - Employee Retirement Fields Area:  Contains retirement and life insurance premium fields for each employee.  You must assign the Retirement Code to the employee.

  • Employee Master Maintenance - Employee Retirement Insurance Area:  Contains the flat retirement contribution amount for a retiree, which overrides the retiree rate.

  • Other Pay Master Maintenance:  Although the MainePERS deductions are usually only calculated for regular pay, you can also set up retirement information for specific Other Pay Codes.

  • MSR Plan Codes Maintenance:  Maintains the Plan Codes for the Retirement Consolidated Plan.  The Plan Codes contain the consolidated information including the rates for the employer's retirement contribution.  Plan Code information is used for calculations on the Consolidated Summary Page that part of the MSR Build Monthly Work File.
    Tip:  For Non-Consolidated rates, see the prompt for the MSR Build Monthly Work File.

  • MSR Deductions Table Maintenance (MSR DEDS):  Maintains the setup for the optional payment of MainePERS benefits via the Vendor Invoices and Checks feature.

  Tips:

  • You do not need to create Deduction Codes for retirement, because they are standard deductions that are handled separately from other payroll deductions.
    Exception:  If you use the Vendor Invoices and Checks Feature to pay retirement benefits, you must set up deductions and the associated fringe benefits.  For more information, see the Understanding Retirement Fringe Benefits topic.

  • Each Retirement Code must have an associated retirement table defined during Retirement Table Maintenance (RET%nn), where nn represents the Retirement Code.

   

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• Retirement Table Fields, click More.

   

  The Retirement Tables are the foundation for the MainePERS processing.  Payroll uses the Retirement Table fields to calculate the deductions and employer paid portion associated with retirement contributions and life insurance premiums.

  Tips:

  • Each Retirement Code must have an associated retirement table defined during Retirement Table Maintenance (RET%nn), where nn represents the Retirement Code.  The retirement tables store rates and calculation factors for the deductions and employer paid benefits associated with retirement contributions and life insurance premiums.

  • Reserved Retirement Codes:

  • 0 = No Retirement:  Retirement Code 0 (zero) is reserved for No Retirement or Maine State Insurance.  You can not create a table for Retirement Code 0.

  • 5 = Retired:  Use Retirement Code 5 for retirees.  Set up a retirement table for Retirement Code 5 during Retirement Table Maintenance.

  • nn = Withdrawn (where nn is not 0 or 5):  Create a specific Retirement Code for employees who have withdrawn from the retirement plan.  To handle W-2 processing properly, set up a corresponding retirement table during Retirement Table Maintenance and enter 0.00 (zeros) in all of the fields.

  

  Employee Deduction Fields:

  • Retirement Rate:  Rate for calculating the deduction for the retirement contribution.

  • Basic Ins Rate:  Rate for calculating the deduction for the basic life insurance premium.

  • Supplemental Ins Rate:  Click to open the Supplemental Insurance Rate window containing age-based rates for calculating the deduction for the supplemental life insurance premium.

  • Dependent Ins Amt Per Pd:  Amount of the deduction (per pay period) for the dependent life insurance premium.
    Tip:  This is a flat amount, not a rate.

  • Basic Ins Ex Amount:  Exemption amount subtracted from the MainePERS Annual Salary, which creates a starting point for deducting the employee's portion of the MainePERS basic life insurance premium.

  • Supplemental Ins Ex Mult/Amount:  Factor used to calculate the starting point for when the employee's portion of the MainePERS supplemental life insurance premium deduction kicks in.  Unlike the basic exemption which is always a flat amount, the supplemental exemption can contain either a flat exemption amount or a multiplier value.

  Employer Benefit Fields:

  • Retirement Rate:  Always leave this zero in the table.  See MSR Plan Codes Maintenance and the MSR Build Monthly Work File for the Consolidated and Non-Consolidated employer paid rates.

  • Basic Ins Rate:  Rate for calculating the employer paid benefit for the basic life insurance premium.

  • Supplemental Ins Rate:  Open the Supplemental Insurance Rate Table that contains age-based rates for calculating the employer paid benefit for the supplemental life insurance premium.

  • Dependent Ins Amt Per Pd:  Amount of the employer paid benefit (per pay period) for the dependent life insurance premium.
    Tip:  This is a flat amount, not a rate.

  • Basic Ins Base:  Annual salary cap for limiting the employer's portion of the MainePERS basic life insurance premium benefit.  When the annual gross earnings amount reaches the cap, the employer's payments are limited to the cap amount; they do not increase as the annual earnings amount increases.  When calculating the Adjusted Annual Salary Amount, the system uses the annual gross earnings or this base amount - whichever is less.

  • Supplemental Ins Base:  Annual salary cap for limiting the employer's portion of the supplemental life insurance premium benefit for MainePERS.  When the employee's gross earnings amount reaches the cap, the employer's payments are limited to the cap amount.  They do not increase as the annual earnings amount increases.  When calculating the Adjusted Annual Salary Amount, the system uses the annual gross earnings or this base amount - whichever is less.

   

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• Handling Retirees, click More.

   

  The life insurance premium for retired employees is handled separately from other MainePERS calculations.  There are two methods for retirees:

  • Rate:  You can enter a Basic Monthly Retiree Rate at the prompt for the MSR Build Monthly Work File, which applies to all employees included in the work file.

  • Flat Amount:  You can maintain a Retiree Insurance Amount for individual employees during Employee Master Maintenance - Employee Retirement Insurance Area.
    Tip:  If a flat amount exists for an employee, it overrides the amount calculated using the rate.

  Notes:

  • Assign Retirement Code 5 to retired employees.

  • The fields for the retiree Retirement Table (RET%05) should all be zeros.

   

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• Employee Deductions Versus Employer Paid Portion, click More.

   

  The following table highlights the differences between the employee deductions and the employer fringes for the retirement contributions and life insurance premiums.

  Description	Employee Deductions	Employer Paid Amounts
  Calculations performed by...	Payroll Check Entry calculates special standard deductions.	The Build Monthly Work File and Retirement Detail Report perform calculations.  The Build Monthly Work File generates the employer paid amounts.
  Amounts posted to Vendor Invoices and Checks by...	Payroll Post (or Post to Vendor Transaction Files, if active)	Build Monthly Work File followed by Retirement Fringe Post
  Total employee amounts for reports...	Report totals for each employee come from Employee Month-To-Date values.	Report totals for each employee are calculated using the Number of Periods from the report prompt.
  Salary Amount for retirement contribution calculations...	Calculation use the Gross Pay amount calculated during Check Entry.	Calculation uses Earnable Compensation, which is the Local or State Funded Earnings + the Federally Funded Earnings
  Salary Amount for insurance calculations...	Calculation uses the estimated Annual Salary maintained  during Employee Master Maintenance - Employee Retirement Fields Area.	Calculations use the estimated Annual Salary maintained during Employee Master Maintenance - Employee Retirement Fields Area.

   

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• The MainePERS Reports, click More.

   

  • Employee Retirement Edit List:  Prints the employee master fields associated with the MainePERS.

  • MSR Build Monthly Work File:  Generates the monthly retirement information required by the state retirement office.  This report also generates transactions for fringe processing.

  • Retirement Detail Report:  Prints the retirement and insurance information including break-downs of the employee's share and the employer's share.

  • MSR Magnetic Media Detail Listing:  Lists the employee and retirement information from the Build Monthly Work File routine that is being sent to the state.

  • Retirement Fringe Journal:  Prints the transactions posted by the Build Monthly Work File.
    Tips:

  • This report is applicable only if you pay the retirement benefits via the Vendor Invoices and Checks system.

  • For more information, see the Understanding Retirement Fringe Benefits topic.

   

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• The MSRS Magnetic Filing, click More.

   

  Below are the steps that outline the MSR Magnetic Filing Procedure:

  1. Make sure the correct versions of the Build Monthly Work File were run.

  2. Confirm the setup in MSR Transmitter Record Maintenance.  If you are in the test phase, set the Filing Type accordingly.  Reset the Filing Type when your transmissions go live.

  3. Run the MSR Build Export Work File - Enhanced routine to process the data from the Build Monthly Work File.  You must select the same report selection number as you did for the Build Monthly Work File routine.  Be sure to update the month and year of the transmission file name to reflect the correct time period.

  4. Run the MSR Export MSR File - Enhanced routine to create the transmission file on your PC.

  5. By the 15th day following the end of the month, follow the MainePERS instructions to transmit the export file from your PC to the state.  To sign on, navigate to the www.mainepers.org website.

   

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• The Flow for Retirement Processing, click More.

   

  Most facilities run the retirement processing either monthly or biweekly.

  Tip:  For more information about the how the retirement programs fit in with the rest of the payroll processing, see the Payroll Runbook.

  1. Payroll Check Entry:  Calculates the retirement contributions and life insurance premiums for employees as standard deductions.

  2. Payroll Post:  Updates the employee month-to-date retirement deductions.

  3. MSR Build Monthly Work File:  Calculates the retirement contributions and life insurance premiums for the employer.
     Tip:  If you use the Vendor Invoices and Checks feature, be sure to select the Update Retirement Fringe option.

  4. MSR Magnetic Media Detail Listing:  (Optional) Reports the information in the Build Monthly Work file that will be sent to MainePERS.

  5. MSR Build Export Work File - Enhanced:  Generates an export file containing the MainePERS information.

  6. MSR Export MSR File:  Exports the retirement information to an export transmission file on a pc where it can later be uploaded to the MainePERS system.

  Tip:  Run the following optional programs annually.

  10. Year End - Build W-2 PERS Master Records:  Creates the employee salary information that MainePERS requires.

   

Understanding the Calculations:

The following sections describe the calculation formulas for employee deductions and employer paid amounts.  Specific examples use sample data to demonstrate how the calculations are performed.

Tip:  These sections contains advanced information, which is provided for those who want to understand the programs at a very deep level.  The typical user does not need to understand the formulas for the calculations.

Calculations Scenario:

To see information about...

• The Scenario for the Calculation Examples, click More.

   

  The calculation examples included later in this topic adhere to the scenario depicted in this section, in which municipal employee #100, John Smith, age 50, is paid weekly and participates in the MainePERS.  John is married with two children.  The employer is the fictitious town of Faircity, Maine.

  Retirement Table:

  Retirement Table RET%01 relates to Retirement Code 1.  The table contains the rates and amounts that Payroll uses to calculate the employee deductions and employer paid amounts.  Check Entry uses this table for all employees who are assigned to Retirement Code 1.

  
   

  Tip:  For additional information about the Retirement Table, refer to the section earlier in this topic called Retirement Table Fields.

   

  Employee Retirement Fields:

  Here you can see that John's employee master record contains the retirement fields that pertain specifically to him.  His Retirement Code is 1, which means that the retirement table RET%01 is used to calculate his retirement amounts.  Also note the Life Insurance Code and the Annual Salary, which are important values used in the deduction and benefit calculations for the life insurance premiums.

  Tip:  All employees who share a Retirement Code should also share the same value for the MSR Expected Pay Pds per Year.  This ensures that the value for the Dependent Ins Amt Per Pd for Ded in the associated retirement table is applied properly to each employee.

  

  Tip:  About Life Insurance Codes...

  • The second digit of any code beginning with F or S represents a multiplication factor for the supplemental insurance benefit calculations.

  • Payroll only calculates employer paid amounts for specific Life Insurance Codes, based on the first character of the code:

  • B, S, F, or H:  Basic life insurance employer paid amounts

  • S or F:  Supplemental life insurance employer paid amounts

  • F or H:  Dependent life insurance employer paid amounts

  • The following list includes valid MSRS codes for the three insurance types:

  • B - Basic Insurance Only

  • F1A - Basic, Supplemental 1 & Dependent Plan A

  • F2A - Basic, Supplemental 2 & Dependent Plan A

  • F3A - Basic, Supplemental 3 & Dependent Plan A

  • F1B - Basic, Supplemental 1 & Dependent Plan B

  • F2B - Basic, Supplemental 2 & Dependent Plan B

  • F3B - Basic, Supplemental 3 & Dependent Plan B

  • HA - Basic & Dependent Plan A

  • HB - Basic & Dependent Plan B

  • S1 - Basic & Supplemental 1

  • S2 - Basic & Supplemental 2

  • S3 - Basic & Supplemental 3

   

  Build Monthly Work File Prompts:

  The MSR Build Monthly Work File calculates the employer retirement contribution and insurance premiums.

  Tip:  For demonstration purposes, only one week is included in the Build Monthly Work File.

  

   

  

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Employee Deductions:

To see information about...

• Calculating the Employee's Deduction for the Retirement Contribution, click More.

   

  Check Entry uses the following formula to calculate the deduction withholding amount for the employee's share of the retirement contribution.

  Employee Retirement Contribution	Data: 6.50 = Retirement Rate (from table) $555.00 = Gross Pay Earnings from Check Entry
  Formula Retirement Rate X Gross Pay = Retirement Deduction Withholding Amount Tips: The retirement contribution is based on the actual gross pay for the employee's check, unlike the insurance calculations, which are based on the estimated Annual Salary maintained in the employee master. Matched Annuities amounts increase the Gross Pay for the calculation.	Example 6.50% X 555.00 = $36.08

   

  Illustrations - Check Entry:

  

  

   

  Illustration - Retirement Detail Report:

  Tip:  Although this report usually shows accumulated values for the month, only one pay period is included for demonstration purposes.

  

   

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• Calculating the Employee's Deduction for the Basic Insurance Premium, click More.

   

  Check Entry uses the following formula to calculate the deduction withholding amount for the employee's share of the basic life insurance premium.

  Employee Basic Insurance Premium	Data: $31,000 = Rounded Annual Salary (for employee) $10,000 = Basic Exemption (from table) 0.80 = Basic Insurance Rate (from table)
  Formula Round Annual Salary to nearest 1000. Annual Salary — Exemption = Adjusted Annual Salary Adjusted Annual Salary X (Basic Ins Rate101000)= Basic Insurance Withholding Amount	Example 31000 — 10000 = 21000 Adjusted Annual Salary 21000 X 0.80101000 = $1.68

   

  Illustration - Check Entry:

  

   

  Illustration - Retirement Detail Report:

  Tip:  Although this report usually shows accumulated employee values for the month, only one pay period is included for demonstration purposes.

  

   

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• Calculating the Employee's Deduction for the Supplemental Insurance Premium, click More.

   

  Check Entry uses the following formula to calculate the deduction withholding amount for the employee's share of the supplemental life insurance premium.

  Supplemental Insurance is calculated using two different methods:

  • Exemption Method:  If the Supplemental Ins Ex Mult/Amount in the table is 0.99 or greater, then it is treated as an exemption amount.

  • Multiplier Method:  If the Supplemental Ins Ex Mult/Amount in the table is less than 0.99, then it is treated as a multiplier.

  Supplemental insurance rates are based on the employee's age.  There are different rates for the different ages as seen in the Retirement Supplemental Insurance Rate table below.

  Note: The employee's date of birth is used to determine their age as of April 1 of the year.

   

  

   

  Employee Supplemental Insurance Premium	Data: $31,000 = Rounded Annual Salary for employee $4,000 = Supp. Exemption from table - Exemp. Meth. 0.03 = Supp. Exemption from table - Multiplier Method 0.90 = Supplemental Insurance Rate F2A = Life Ins Code for employee/Multiplier = "2"
  Formula - Exemption Method Round Annual Salary to nearest 1000. Annual Salary — Exemption = Adjusted Annual Salary Adjusted Annual Salary X Life Insurance Code Multiplier = New Adjusted Annual Salary New Adjusted Annual Salary X (Supplemental Ins Rate101000) = Supplemental Insurance Withholding Amount	Example - Exemption Method 31000 — 4000 = 27000 Adjusted Annual Salary 27000 X 2 = 54000 New Adjusted Annual Salary 54000 X 0.90101000 = $4.86
  Formula - Multiplier Method Round Annual Salary to nearest 1000. Annual Salary X Supplemental Ins Ex Mult/Amount for Ded = Adjusted Annual Salary Adjusted Annual Salary X (Supplemental Ins Rate101000) = Supplemental Insurance Withholding Amount	Example - Multiplier Method 31000 X 3 = 93000 Adjusted Annual Salary 93000 X 0.9101000 = $8.37

   

  Illustration - Check Entry:  Exemption Method:

  

   

  Illustration - Retirement Detail Report:

  Tip:  Although this report usually shows accumulated employee values for the month, only one pay period is included for demonstration purposes.

  

   

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• Calculating the Employee's Deduction for the Dependent Insurance Premium, click More.

   

  Check Entry updates the deduction withholding amount for the employee's share of the dependent life insurance premium.

  Employee Dependent Insurance Premium	Data: 0.74 = Flat Dependent Insurance Amt from table
  Formula Dependent Ins Amt = Dependent Insurance Withholding Amount Tip:  As a flat amount, this does not use the employee's Number of Federal Dependents or Number of State Dependents.	Example 0.74 (from table) = $0.74

   

  Illustration - Check Entry:

  

   

  Illustration - Retirement Detail Report:

  Tip:  Although this report usually shows accumulated employee values for the month, only one pay period is included for demonstration purposes.

  

   

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Employer Paid Amounts:

To see information about...

• Calculating the Employer's Paid Amounts for the Retirement Contribution, click More.

   

  The MainePERS establishes the employer retirement rates.  Payroll stores the rates differently for the two types of plans:

  • Consolidated Plan:  Maintain the rates for each Plan Code during MSR Plan Codes Maintenance.

  • Non-Consolidated Plan:  Enter the rates for PLDs and teachers at the prompt for the MSR Build Monthly Work File.

   

  Employer Retirement Contribution

  Formula Employer Contribution = Employer Retirement Rate X Earnable Compensation Tip:  Earnable Compensation = Local or State Funded Earnings + Federally Funded Earnings

   

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• Calculating the Employer's Paid Amounts for the Basic Insurance Premium, click More.

   

  The MSR Build Monthly Work File uses the following formula to calculate the amount for the employer's share of the basic life insurance premium.

  Tip:  The Build Monthly Work File generates the total of the employee and employer share of the life insurance premium.  However, the Retirement Detail Report, shown below, breaks out the basic, supplement, and dependent amounts separately for the employee and employer portions.

  Employer Basic Insurance Premium

  Data: $31,000 = Rounded Annual Salary for employee $50,000 = Basic Insurance Base from table 0.08 = Basic Insurance Rate from table 1 = Number of Periods per Report from report prompt

  Formula Round Annual Salary to nearest 1000. Adjusted Annual Salary = lesser of the following: MSR Annual Salary Or, Basic Ins Base for Employer Paid Adjusted Annual Salary X (Basic Ins Rate for Employer Paid101000) = Basic Employer Paid per Pay Period Basic Employer Paid per Pay Period X Number of Periods = Employer Basic Insurance Premium Note:  Payroll calculates basic employer amounts only for employees with Life Insurance Codes that begin with B, S, F, or H.

  Example 31,000 = Adjusted Annual Salary = lesser of the following: 31000 = Annual Salary Or, 50000 = Basic Ins Base 31,000 X 0.810100 = 2.48 2.48 X 1 = 2.48

   

  Illustration:

  Tip:  Although this report multiplies the employer paid amount by the Number of Periods per Report entered at the prompt, only one pay period is included for demonstration purposes.

  

   

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• Calculating the Employer's Paid Amounts for the Supplemental Insurance Premium, click More.

   

  The MSR Build Monthly Work File uses the following formula to calculate the employer paid amount for the employer's share of the supplemental life insurance premium.

  Tip:  The Build Monthly Work File only generates the total of the employee and employer share of the life insurance premium.  However, the Retirement Detail Report, shown below, prints the basic, supplement, and dependent amounts separately for the employee and employer portions.

  Employer Supplemental Insurance Premium	Data: $31,000 = Rounded Annual Salary for employee 0.30 = Supplemental Ins Rate $40,000 = Supplemental Insurance Base from table - Exempt Meth 0.30 = Supplemental Insurance Rate from table- Multiplier Method F2A = Life Ins Code for employee/Multiplier = "2" for employee 1 = Number of Periods per Report from report prompt
  Exemption Method Formula Round Annual Salary to nearest 1000. Adjusted Annual Salary = lesser of the following: Annual Salary Or, Supplemental Ins Base Adjusted Annual Salary X (Supplemental Ins Rate101000) = Supplemental employer paid amount per Pay Period Supplemental amount per Pay Period X Life Insurance Code Multiplier = Working Supplemental Employer Paid Amount Working Supplemental Employer Paid Amount X Number of Periods per Report = Employer Supplemental Insurance Premium Note:  Payroll calculates supplemental employer amounts only for employees with Life Insurance Codes that begin with S or F.	Exemption Method Example 31,000 = Adjusted Annual Salary = lesser of the following: 31000 = Annual Salary Or, 40000 =  Supp Ins Base 31,000 X .310100 = 0.93 0.93 X 2 = 1.86 1.86 X 1 = 1.86
  Rate Method For information about the rate method, contact NDS Technical Support.

   

  Illustration:

  Tip:  Although this report multiplies the employer paid amount by the Number of Pay Periods entered at the prompt, only one pay period is included for demonstration purposes.

  

   

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• Calculating the Employer's Paid Amounts for the Dependent Insurance Premium, click More.

   

  The MSR Build Monthly Work File uses the following formula to calculate the amount for the employer's share of the basic life insurance premium.

  Tip:  The Build Monthly Work File generates the total of the employee and employer share of the life insurance premium.  However, the Retirement Detail Report, shown below, breaks out the basic, supplement, and dependent amounts separately for the employee and employer portions.

  Employer Dependent Insurance Premium	Data: 0.20 = Dependent Insurance Amt from table 1 = Number of Periods per Report from report prompt
  Formula Dependent Ins Amt X Number of Periods = Employer Dependent Insurance Premium Note:  Payroll calculates dependent amounts only for employees with Life Insurance Codes that begin with F or H.	Example 0.20 X 1 = $0.20

   

  Tip:  Although this report multiplies the employer paid amount by the Number of Pay Periods entered at the prompt, only one pay period is included for demonstration purposes.