CalSTRS Employer Information Circular Provides Helpful Reminders of Common Reporting Errors
October 2015
Number 53
CalSTRS recently issued an Employer Information Circular (EIC) containing important reminders of common errors leading to negative audit findings for school districts, county offices of education and community colleges.
The EIC addresses proper reporting for special compensation and clarifies that extra-duty compensation must be reported separately from special compensation. For example, off-schedule bonuses or advanced degree pay are reported differently than coaching pay. This allows CalSTRS to credit such compensation appropriately. Errors in reporting for a particular employee could lead to an overpayment during that employee's retirement that the District may be partially liable to repay.
The EIC also provides information on the proper reporting of unused sick leave for service credit. For example, when reporting service credit, school districts must use caution in providing CalSTRS with the correct number of an employee's "base contract days" (i.e., length of the work year) to avoid artificially inflating or deflating the employee's retirement allowance.
The EIC further addresses a school district's obligations when hiring retirees or contracting with vendors who hire retirees. In particular, school districts are required to notify CalSTRS retirees of the earning restrictions and report to CalSTRS compensation paid to them. This is true regardless of whether the retiree is employed by the District directly, is hired as an independent contractor, or is working as an employee of a third-party vendor. While some exceptions do apply, they are complex and should be analyzed on a case-by-case basis.
A copy of the EIC, Vol. 31, Issue 3 is available here. Lozano Smith attorneys are available to provide guidance on creditable service, creditable compensation and other pre- and post- retirement employment issues for CalSTRS and CalPERS members, including those discussed in the EIC.
Lozano Smith attorneys are also available to assist you in reviewing Board Policies, Administrative Regulations, collective bargaining agreements and administrator contracts to ensure compliance with CalSTRS and CalPERS regulations. In particular, we are able to assist school districts in determining whether to restructure administrator contracts in light of the December 31, 2015 deadline (see Client News Brief No. 21, April 2015). If you have any questions about CalSTRS/CalPERS retirement issues, or how retirement laws govern public schools and their employees, please contact one of ournine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.
Number 53
CalSTRS recently issued an Employer Information Circular (EIC) containing important reminders of common errors leading to negative audit findings for school districts, county offices of education and community colleges.
The EIC addresses proper reporting for special compensation and clarifies that extra-duty compensation must be reported separately from special compensation. For example, off-schedule bonuses or advanced degree pay are reported differently than coaching pay. This allows CalSTRS to credit such compensation appropriately. Errors in reporting for a particular employee could lead to an overpayment during that employee's retirement that the District may be partially liable to repay.
The EIC also provides information on the proper reporting of unused sick leave for service credit. For example, when reporting service credit, school districts must use caution in providing CalSTRS with the correct number of an employee's "base contract days" (i.e., length of the work year) to avoid artificially inflating or deflating the employee's retirement allowance.
The EIC further addresses a school district's obligations when hiring retirees or contracting with vendors who hire retirees. In particular, school districts are required to notify CalSTRS retirees of the earning restrictions and report to CalSTRS compensation paid to them. This is true regardless of whether the retiree is employed by the District directly, is hired as an independent contractor, or is working as an employee of a third-party vendor. While some exceptions do apply, they are complex and should be analyzed on a case-by-case basis.
A copy of the EIC, Vol. 31, Issue 3 is available here. Lozano Smith attorneys are available to provide guidance on creditable service, creditable compensation and other pre- and post- retirement employment issues for CalSTRS and CalPERS members, including those discussed in the EIC.
Lozano Smith attorneys are also available to assist you in reviewing Board Policies, Administrative Regulations, collective bargaining agreements and administrator contracts to ensure compliance with CalSTRS and CalPERS regulations. In particular, we are able to assist school districts in determining whether to restructure administrator contracts in light of the December 31, 2015 deadline (see Client News Brief No. 21, April 2015). If you have any questions about CalSTRS/CalPERS retirement issues, or how retirement laws govern public schools and their employees, please contact one of ournine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.
As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.
