Automated VRS RECON

Automated VRS RECONPresented by State Payroll OperationsOctober 2014BackgroundNew VRS Modernization Rules effective Fall 2012Redefined Creditable CompensationCreated new effective dating and service eligibility rulesVRS introduced a new system VNAV and created new processing requirements for line agenciesPMIS feeds VNAV on a daily basisVNAV applies the new rules to the transactions (new hires, salary increases, etc.) and updates the employees service record accordinglyNon-PMIS agencies key changes to VNAV manually

Important to Note: VRS is the source for retirement plan code eligibility not the line agency. VNAV determines eligibility for an employees retirement plan code based on the employees job classification. Transactions must be effective on the first working day of the month (excludes weekends and banking holidays) to update the creditable compensation values for that month.2VNAV to CIPPS InterfaceMonthly interface beginning January 2014Interface updates the following items:Retirement Plan CodesBuyback (PPS) Agreement DeductionsHybrid Voluntary ContributionsInterface Reports:U184 VNAV/CIPPS Transaction Error ListingU185 VNAV/CIPPS Update ListingU186 VNAV/CIPPS Retro Transaction Listing

Shown on Page 2 of Appendix3VNAV to CIPPS InterfaceThings to remember:Let VNAV populate the retirement plan code via the interface. Leave it blank until the interface occurs.If you cannot wait for the interface, make sure you have a screen print from VNAV and set the employee up according to the retirement plan shown in VNAV.PPS (Buyback Agreements) must be keyed into VNAV and should only come to you via interface. Do not set up Buyback Agreements from paper forms.If you cannot wait for the interface to establish a PPS (Buyback) deduction, key from a VNAV screen print.Interface will send 8XX transaction for missed buyback from retro salary adjustment or late entryVNAV to CIPPS InterfaceHybrid employees will be initially be established without a voluntary contribution amount. Voluntary contribution elections are added on the first of the following quarter after an employees election.If a Hybrid employee is contributing to Deduction 38 (Deferred Compensation) the interface will cut off Deduction 45 (Cash Match) until the employee is contributing the full 4% Voluntary Contribution.See Payroll Bulletin 2014-05 regarding new processing when Sick Leave Payout is used to purchase service.PMIS to CIPPS InterfaceRemember that SP99 Contributions base is updated by PMIS to CIPPS interface for a salary changeReports U181 and U180VRS Modernization ExamplesCritical that you follow those examplesNew Hires ORP Eligible ProcessLess than 12 Month EmployeesContract Length must be correct in PMIS and CIPPSCollections are prorated over the contract monthsHybrid Retirement PlanThese employees still pay a mandatory 5%, however 4% is a defined benefit plan and 1% is a defined contribution plan.Voluntary contributions to the Hybrid Plan (Deduction 16) are counted towards the 457 Maximums along with Deduction 38 Deferred Compensation. The goal amount works differently for these deductions and can be monitored in the Total 401K Amount field on H0BES.Agencies can become responsible for missed employee deductions to the Hybrid Plan as well as the gains associated with missed employer deductions.If Hybrid Plan deductions are taken for an employee that is not on file with ICMA (not in VNAV) the money will be returned immediately to the agency.

Hybrid Retirement PlanHybrid employees who with voluntary contributions must restart those deductions with the new agency if they transferThey are not eligible for the deferred comp (supplemental) cash match until they start contributing again at the new agency for the full 4%.

Part 1: VRS Snapshot ProcessingPurpose: Reconcile PMIS to VNAV. (Non PMIS agencies reconcile manual entries to VNAV).Retrieve a HuRMan download of PMIS Annual Salaries and divide by the Employee Months and compare that amount to the Creditable Compensation values on the Snapshot File.HR should remove service for employees who did not pay the full month and make other adjustments to the employees record as necessary.Retroactive corrections can be made on the Snapshot.Main function is to reconcile the Creditable Compensation amounts. The individual benefits are a percentage of the amount. CIPPS dollars will be reconciled to the Creditable Compensation amount after you certify, so it is not necessary to review the individual amounts charged for each benefit (Retiree Credit, Retirement, Group Life). 11Part 1: VRS Snapshot ProcessingVRS Modernization changed the way we bill for LTD.Prior to the changes LTD was paid based on eligibility for the plan, not participation.Non-VSDP Participants should not be billed for LTD. If you have discrepancies notify Employer Services at VRS. You may need to provide opt out forms or other information to support the correction in VNAV.Ensure that LWOP employees are correctOnce you review the initial month, you only need to review changes that occurred during that subsequent months.

For example, if total creditable compensation for October was $125,700 and you had one new hire during November with creditable compensation of $2,300, the total creditable compensation for November should be $128,100.12Part 1: VRS Snapshot ProcessingReview the Cancelled Records Report and correct items before you confirm the Snapshot.Review carefully the information presented for terminated employees. If an agency knows at the time a Snapshot is approved that a terminated employee did not pay the complete member portion for the last month, remove the service for that month ASAP. Once the dollars are refunded to the employee, the funds may not be returned to you from VRS.

Part II: VRS Automated ReconAfter all agencies have certified the Snapshot by the 10th of a month, VRS will send an electronic file to DOA of the Snapshot amounts this becomes your bill.DOA compares the amount billed on the Snapshot file to the amounts collected in CIPPS. Reports U170, U171, U172, U173 and U174 are created. Automated IATs are produced for any differences between the amount billed on the Snapshot and the amount collected in CIPPS.Part II: VRS Automated ReconIf you had a perfect month, you will only receive Report U174. Reports U170, U171, U172 and U713 are produced only when the dollar amounts collected in CIPPS are greater than a .05 tolerance for the amount billed on the Snapshot file.If you receive reports U170, U171, U172 or U173 you should review the errors and make corrections immediately. If not enough funds were collected in CIPPS from the member collect the funds due on the next available payroll. Agencies are not allowed to pay the employees portion of retirement.Part II: VRS Automated ReconReport U170 Plan Related Benefits Employer Retirement and VSDP(LTD)Error Code 1 Employer Retirement Amount Difference - a difference of more than .05 cents exists for this employee between the amount of Employer Retirement on the VRS Snapshot and the amount of CIPPS dollars collected during the month for deduction numbers 116 and 127 If not enough is collected in CIPPS correct the error by collecting on the next available payroll. If Snapshot amount was incorrect, HR may need to correct PMIS and or VNAV the adjustment will come through on a future recon for the month that they made the correction.Part II: VRS Automated ReconReport U170 Plan Related Benefits Employer Retirement and VSDP(LTD)Error Code 2 VSDP/LTD Amount Difference - a difference of more than .05 cents exists for this employee between the amount of VSDP/LTD on the VRS Snapshot and the amount of CIPPS dollars collected during the month for deduction numbers 136 and 144. - NOTE: For the recon months of October January, you will see multiple refunds for LTD premiums for Non-VSDP participants. This is because CIPPS was not modified for the LTD billing change until February. If the VRS Snapshot does not reflect the correct VSDP status of the employee, send an email to employer-info@varetire.org. You may need to provide Opt out forms or other information to support the request.Part II: VRS Automated ReconReport U170 Plan Related Benefits Employer Retirement and VSDP(LTD)Error Code 3 CIPPS Plan Code Error the retirement plan code on HMCU1 in CIPPS is not appropriate for the retirement plan code presented on the VRS Snapshot. VRS is the source for retirement plan code eligibility. They will assign a retirement plan based on the employees job information, and membership history with VRS. Retirement plan code discrepancies could result in overpayments to the employee. Consult with HR/VRS to determine the correct plan code and correct the deductions withheld in CIPPS as necessary.Part II: VRS Automated ReconReport U170 Plan Related Benefits Employer Retirement and VSDP(LTD)Error Code 4 VSDP/LTD Deduction Code Error the deduction number used in CIPPS on H0ZDC is not appropriate for the retirement plan code. Deduction 136 is for VRS related retirement plans. Deduction 144 is for SPORS and VALORS retirement plans. To correct this error, verify that the retirement plan code is correct on HMCU1 then rekey the retirement plan code.Part II: VRS Automated ReconReport U171 Employer Group Life and Health Insurance (Retiree) CreditError Code 5 Group Life Difference a difference of more than .05 cents exists for this employee between the amount of Group Life on the VRS Snapshot and the amount of CIPPS dollars collected during the month for deduction number 120. Correct CIPPS if not enough money collected.

Part II: VRS Automated ReconReport U171 Employer Group Life and Health Insurance (Retiree) CreditError Code 6 HIC/Retiree Credit Difference a difference of more than .05 cents exists for this employee between the amount of HIC/Retiree Credit on the VRS Snapshot and the amount of CIPPS dollars collected during the month for deduction number 115. If not enough funds are collected, collect the additional funds needed on the next available payroll in CIPPS.

Part II: VRS Automated ReconReport U172 Employee ContributionsNOTE: Employers are not allowed to pay member retirement contributions as a part of this reconciliation, the agency will be automatically charged if the member contributions are under withheld. Collect any member portions due on the next available payroll ASAP!

Part II: VRS Automated ReconReport U172 Employee ContributionsError Code 7 Buyback Difference a difference of more than .05 cents exists for this employee between the amount of Buyback (Service Purchase) on the VRS Snapshot and the amount of CIPPS dollars collected during the month for deductions 17, 18, 43, and 44.NOTE New Service Purchase agreements will be entered in VNAV by the PPS Processor at the line agency. These will update in CIPPS through the VNAV to CIPPS interface.

Part II: VRS Automated ReconReport U172 Employee ContributionsNOTE: New Procedure for entering Buyback AgreementsEmployee receives a letter from VRS notifying them of the amount they can purchase.Employee will work with Benefits Administrator to complete the newly revised Form VRS-26E. This form does not get sent to VRS it is merely documentation for the line agency to use to key into VNAV.The PPS processor (VNAV) uses the VRS-26E to enter the agreement in VNAV. VNAV will send a transaction to CIPPS via the VNAV to CIPPS interface.

Part II: VRS Automated ReconReport U172 Employee ContributionsError Code 8 Employee (Member) Contributions Difference a difference of more than .05 cents exists for this employee between the amount of member contributions on the VRS Snapshot and the amount of CIPPS dollars collected during the month for deduction number 12. If an employee terminates/transfers mid month we must collect the members portion from their last available paycheck if we missed the last payment see VRS Modernization Working Example Y

Part II: VRS Automated ReconReport U172 Employee ContributionsError Code 9 Pretax Indicator Error the CIPPS deduction number used to collect the Buyback (Service Purchase) amount is not appropriate according to the VRS Snapshot pretax indicator. This means that the deduction number you are using for the Buyback amount is not consistent for what VNAV has as the employees selection. Deductions 17 and 18 are post tax deductions, deductions 43 and 44 are pre tax deductions. Refer to the employees agreement to determine which system is correct and adjust the system accordingly. If CIPPS is incorrect, this will require adjustments to the employees tax record and possibly a W-2C if the problem existed in previous calendar years.Part II: VRS Automated ReconReport U173 CIPPS Activity for Employees Not on VRS Monthly Snapshot FileExceptions are displayed on this report if there are CIPPS dollars and the employee was not on the VRS Snapshot for that month.Example Employee terminates in April, but one of the paychecks issued was incorrect so a special pay was issued. The void did not process until the month of April. On the April Recon, the overpayment is credited back to the agency for the third paycheck. On the May Recon, the employee is not charged on the Snapshot but there is CIPPS money because the void is processed. This will charge the agency for void and reconcile the employees record over the two months.Part II: VRS Automated ReconReport U174 VRS Billing SummaryIf you have a perfect month this is the only report you will receive. It summarizes the amounts billed by organization code and the amount of money collected in CIPPS. Non-billed CIPPS Activity - the summary of what was presented on Report U173.Billed VRS Activity the summary of the billing and CIPPS amounts for Retirement (Employee/Employer), LTD, Group Life, Retiree Credit and the automated IATs generated. Detail for automated IATs shown on U170, U171, U172Part II: VRS Automated ReconHelpful HintsCorrect errors as soon as possible to avoid repeating errors each month.Reconcile the VNAV Snapshot Creditable Compensation to a HuRMan download initially, and then reconcile your exceptions each monthRetirement Plan code is determined at VRS after employee is added to VNAV.USE THE VRS MODERNIZATION WORKING EXAMPLES ON OUR WEBSITE!!! Part III: Agency Default GLIThe Automated VRS Reconciliation produces CREDIT and DEBIT IATs to the Agency Default GLI coding.Use a spreadsheet to track the charges/credits each month. Some charges/credits will automatically wash if an adjustment is made in subsequent months. Some charges/credits will need an ATV to clear the Agency Default Coding. For example, the LTD credits returned for Non-VSDP participants will need to be cleared via an ATV. DOA has a spreadsheet that can be usedPart III: Agency Default GLIAmounts on U174 are should be visible on CARS 401 Report in the week that the Recon is processed. Note Automated VRS Recon.