Retirement Nuts & Bolts andPre-Tax Accounts

Training for Campus HR Retirement Administrators

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AGENDA

• Limits/Contributions

• Rollovers/Information Sharing Agreements

• Reports-A-Palooza

• Intra-MnSCU Hires

• General Retirement Q & A

• Eide Bailly: HRA & MDEA

Retirement Plans: Contribution Limits

Gary Janikowski

System Director, Personnel

Slide 4

MnSCU Retirement Plans Affected by IRS Limits

• MnSCU Tax-Sheltered Annuity (TSA) Program

• State’s Deferred Compensation Program

• Individual Retirement Account Plan (IRAP)

• Supplemental Retirement Plan (SRP)

Slide 5

Contribution Limits

For all plans…

• IRS publishes limits annually

• State payroll system automatically stops deferrals once limits are reached

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Tax-Sheltered Annuity (TSA) Program 403(b)

• Voluntary Plan

• MnSCU-sponsored

• No employer match

• Same investment funds as Individual Retirement Account Plan (IRAP) and Supplemental Retirement Plan (SRP)

Slide 7

TSA Limit Summary

Participant Age/YOS: Limit for calendar year 2009:

Under age 50 $16,500

Age 50+ $22,000 ($16,500 + $5,500)

Those with 15+ YOS at MnSCU Institutions, regardless of age1

$25,000 ($16,500 + $5,500 + $3000)

1Note: TIAA-CREF must calculate this limit. This additional limit can only continue for a five (5) year period.

Slide 8

Deferred Compensation Program 457(b)

• Voluntary Plan

• State-sponsored

• Administered by Minnesota State Retirement System (MSRS)

• Employer match available as per bargaining contract/personnel plan as long as employee is not SRP eligible

Slide 9

Deferred Comp Limit Summary

Participant Age/YOS: Limit for calendar year 2009:

Under age 50 $16,500

Age 50+ $22,000 ($16,500 + $5,500)

Those who are within three (3) years of normal retirement age1

$33,000

1Note: The MNDCP Service Center must calculate this limit.

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Individual Retirement Account Plan (IRAP)

• Annual Earnings Contribution Limit $245,000

• Thus, the most that can be contributed in 2009 is $25,725:– 4.5 % employee @ $245,000 = $ 11,025

– 6.0% employer @ $245,000 = $ 14,700

$ 25,725

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Annual Additions Limit (415 limit)

• The Annual Additions Limit is the total amount (both ER and EE contributions) that can be deferred by an employee

• For 2009, the limit is $49,000

• This limit includes the Supplemental Retirement Plan (SRP) and the Individual Retirement Account Plan (IRAP)

Questions?

Rollovers/Information Sharing Agreements: IRS Guidance for 403(b) Plans

Dirk Camiletti

TIAA-CREF

Slide 14

Final 403(b) RegulationsEffective Dates

• Issued July 26, 2007

• The effective date under the final regulations was generally January 1, 2009

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Final 403(b) RegulationsTransfers to Unapproved Vendors

• Revenue Ruling 90-24 permitted participant to do a direct transfer between 403(b) contracts even if the contract was not approved under the plan (“90-24 transfers”).

• After 9/24/07, transfers to contracts issued by unapproved vendors prohibited unless the vendor agrees to share information necessary for compliance with the employer

– Information Sharing Agreement (“ISA”) needed.

– Loans, hardships, termination of employment

– Can’t rely on employee representation

• Transfers to unapproved vendors after September 24, 2007, must have an ISA in place by January 1, 2009.

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Information Sharing Agreement Facts

Information Sharing Agreements are:

Agreements that are entered into between 403(b) Plan Sponsors, such as MnSCU, with non-approved TSA financial providers (e.g., MetLife, Thrivent Financial, etc.) to share information on current employee 403(b) accounts.

MnSCU does not enter into Information Sharing Agreements.

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Final 403(b) RegulationsInformation Sharing with Approved

Vendors

• Employer and approved vendors must also share information related to tax compliance requirements to ensure plan’s operational compliance

– No separate ISA required

• Vendors (approved or unapproved with ISA) cannot rely on employee representation

– loans, hardships, termination of employment

Slide 18

Revenue Procedure 2007-71Transitional Rules for Information

Sharing

• “Grandfathered” Contracts –

– No information sharing required

– Vendors deselected prior to 2005

– 90-24 transfer to unapproved vendor prior to 9/25/07

• “Orphan” Contracts

– “reasonable good faith effort” to share information required

– vendors deselected after 2004 and prior to 2009

– 90-24 transfers to unapproved vendor between 9/25/07 and 1/1/09

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Revenue Procedure 2007-71Transitional Rules for Interim Contracts

• Transfers to unapproved vendors after 9/24/07

– If no ISA on 1/1/09, re-exchange into contract of approved vendor or contract of unapproved vendor with ISA

– Up until 6/30/09 to re-exchange

– No information sharing required for interim contract

– Alternatively, reasonable good faith standard available

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Rollover Process

Campus HR offices are not authorized to sign off on employee rollover and distribution requests under the MnSCU Defined Contribution Plan and Tax-Sheltered Annuity Plan.

Please forward all such requests to the OOC for research and signature.

Slide 21

Case Study: Rollovers

Eligible Rollovers

•IRAP & SRP

– New Hire / In-Service

– Post Termination

•TSA

– New Hire / In-Service

– Post Termination

Slide 22

Rollover Information

With respect to rollovers…..

Participants can rollover contributions from outside eligible plans into the MnSCU defined contribution plans.

The rollover authorization form is available on the MnSCU HR web site at:

http://www.tiaa-cref.org/pdf/F8872.pdf

Slide 23

Legal Disclaimer

This PowerPoint is for informational purposes only and the statements made during this presentation represent TIAA-CREF’s interpretation of applicable law. It is presented with the understanding that TIAA-CREF (or its affiliates, distributors, employees, representatives and/or insurance agents) is not engaged in rendering legal or tax advice.

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Thank you for joining us!

TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY.

©2009 Teachers Insurance and Annuity Association-College Retirement Equities Fund, New York, NY 10017

C45429

Questions?

Reports – A- Palooza

Barb Biljan

HRIS Lead Management Analyst, Personnel

Welcome to Reports-A-Palooza

Reviewing reports that will help make selecting and coding retirement easier

The HR 7010 Report is a valuable tool to help manage retirement issues for employees.

It is recommended that campuses run this report every payroll period.

Reports-A-Palooza

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HR Reconciliation Queries

Retirement Code Blank

Retirement Status Code Blank

Errors on Unclassified Retirement

Errors on Classified Retirement

Phased & AEP Errors

Reports-A-Palooza

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• Blank reports mean no errors

• Any data returned is inaccurate or missing and should be corrected

• Export reports to Excel

Reports A Palooza

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Supplemental Retirement Reconciliation Queries

• SRP Code is blank

• SRP Code is Y, but Deduct Code is blank

Reports-A-Palooza

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Reports-A-Palooza

SRP Annual Review Process

• Possible Newly Eligible Employees

• All SRP on all assignment data – includes classified & unclassified

• SRP deduction code information

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Reports-A-Palooza

End of Fiscal Year

SRP Annual Review includes:

• Step-by-step process on website

• Includes eligibility information

• Flow chart for eligibility

• Missed deductions forms

Slide 34

• Phased Retirement Query

• Annuitant Employment Program Query

• TRA Annual Reports Queries

Reports-A-Palooza

Questions?

Intra-MnSCU Hires

Mary Muenchow

Director of Personnel

Slide 37

Intra-MnSCU Hires

• Past service

• Concurrent service

• Sometimes University of Minnesota service

• One campus or multiple

Slide 38

Intra-MnSCU Hires

Affects both:

• IRAP

• SRP

Slide 39

Helps to Locate Other Service:

• SEMA4 Public Data

• Jobs Data in SCUPPS

• Multi-Campus Report

• New EE Retirement Checklist

• Call or e-mail

Intra-MnSCU Hires

Slide 40

Records of Prior Service:

• SEMA4 Public Data

• Jobs Data in SCUPPS

Intra-MnSCU Hires

Slide 41

New EE Retirement Checklist:

• Prior service date

• Concurrent work and location

• Retiree status information

Intra-MnSCU Hires

Slide 42

Multi-Campus Report provides information about concurrent work at another campus

Intra-MnSCU Hires

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Basic rule for both IRAP & SRP:

Once eligible, always eligible

Intra-MnSCU Hires

Slide 44

Primary Retirement:

Election process is for MnSCU service only!

Intra-MnSCU Hires

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Once per career choice for IRAP/TRA until this year: 7/1/09

New second election for newly tenured/permanent faculty

Intra-MnSCU Hires

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Three flow charts on the website help to determine coverage:

• IRAP for unclassified employees

• IRAP for Administrators

• SRP

Intra-MnSCU Hires

Slide 47

Each Job Record Number has its own:

• Primary Retire Code

• Retirement Status Code

• SRP Eligibility Code

• SRP Deduction Code

Intra-MnSCU Hires

Slide 48

When taking over Job Records, must review retirement and SRP coding for each Job Record

Intra-MnSCU Hires

Slide 49

Intra-MnSCU Hires

Remember that SEMA4 will recognize only one retire code per job record for one deduction per payroll period

Questions?

Thanks for joining us!