To: Municipalities of the Municipal Police Employees’ Retirement System (MPERS)
nRe: Earnable Compensation and Legislative Changes That Became Effective July 1, 2020
nIt has come to our attention that some municipalities have not made contributions based upon incentive pay. Please remember that, under R.S. 11:2213(10), for purposes of determining the salary and compensation on which retirement contributions are to be made and on which AFC shall be based,”earnable compensation” means the full amount earned by an employee for a given month, which shall not include overtime, and will include, but is not limited to:
- regular base salary;
- state supplemental pay;
- differential pay, when it is that extra amount of pay that is added to a police officer’s regular compensation when assigned duties of a higher-ranking officer for a period of time. The additional pay brings his regular salary to the higher level during that period;
- millage and tenure pay;
- longevity pay;
- incentive pay if it is paid by the municipality in the same amounts each month; and
- salary paid during periods while on sick leave or vacation.
Additionally, you should be aware of the following changes to MPERS’s statutes effective July 1, 2020:
- All employers shall report separately the amount of compensation paid for overtime on their monthly contribution reports;
- Any employer who becomes delinquent for a period in excess of ninety days in the collection and remittance of the amounts due as monthly contributions is also subject to a penalty of twenty-five percent of the aggregate monthly contributions due;
- Any employer who becomes delinquent for a period in excess of one hundred and eighty days in the collection and remittance of the amounts due as monthly contributions is liable for the greater of the amounts in 1 and 2 above and an amount equal to the actuarial cost of a purchase of the service credit for which contributions were not timely paid calculated by the system’s actuary pursuant to R.S. 11:158(C);
- Any employer that fails to transmit the required contributions in a timely manner shall also reimburse the system any legal and actuarial fees paid by the system in the collection of delinquent contributions; and
- “Full-time” shall mean employment on a permanent, regularly scheduled basis for at least anaverage of thirty hours per week. This means that any employee who works at least an average of thirty hours per week and otherwise meets the definition of an MPERS employee under R.S. 11:2213(11) must be enrolled in MPERS. Any member who retires before July 1, 2021 will continue to be governed by his employer’s definition of “full-time.” However, that definition should not apply to the entire department and not just to a certain position. Any member who retires on or after June 30, 2021 and returns to employment on a permanent, regularly scheduled basis for at least anaverage of thirty hours per week must have his retirement benefit stopped, and he and his employer must contribute to MPERS.
If you have any questions about whether a specific pay type is MPERS eligible or any of the legislative changes, please contact Taylor Camp, the MPERS Chief Financial Officer.
Thanks,
Ben Huxen, CPA
Executive Director and General Counsel