Public Employers SSA-1945

AnneHa

We received notification YESTERDAY from our retirement system that employers who do not take FICA deductions from payroll checks have to file the above form with our retirement system for every new hire after January 1, 2005. Fortunately, turnover is low so I don’t have much catching up to do, but I am ticked that the SSA didn’t bother to let us know about this. The form is located at:

[url]http://www.socialsecurity.gov/form1945/SSA-1945.pdf[/url]

Anne in Ohio

Don D

I'm dense (I'm in HR, not Payroll). Why do you NOT take FICA deductions from payroll checks?

AnneHa

Deductions are taken from checks and contributed to the Ohio Public Employment Retirement System. (8.5% ee, 13.55% er) These payments exempt our employees from paying into SS - in effect, creating duplicate pension systems. OPERS is financially sound and fiscally responsible, has an excellent retirement package and now it's all getting mixed into the SS reform. The feds want to take all state retirement systems and roll them into the SS reform stuff so everyone gets stuck with the same retirement benefit. I am already in a position to have my SS benefit (that I contributed to for over 20 years, cut by up to $300.00/mo because of eligibility in OPERS.

Anne in Ohio

Don D

I'm a monthly beneficiary of MPERS and have already drawn roughly $400K, much more than I contributed. In this state, we were not exempted, thank God or whoever, from SS contributions and hopefully one day I will draw that as well. I read in our newsletter that our state system is among the most sound of the state systems with billions. The key to its continued success is the fact that the state legislature CANNOT touch it. Otherwise, it would be broke. x:-)

Hunter1

I think that state systems are generally in pretty sound shape. WRS, our public pension system is pretty close to 100% funded and has assets in the neighborhood of $60 billion. Does your have a provision for cost of living or similar adjustments? Ours does. Like yours, our vested benefits cannot be touched, although a few years back our governor actually took money out of the system to balance the state's general budget. A lawsuit ensued and the state had to pay the money back to the system with interest. We are eligible for SS also, with the exception of our firefighters.

Don D

So far the legislature has not found a way to touch the funds, although I'm sure they could try to pass a bill to access it. They would jeopardize their cushy jobs if they did though. The make somewhere around $60k now for three months of in-session sleeping.

The legislature a few years back changed the system rule to say that all you need to retire is four years. Coincidentally, that's the term of their service, if defeated. They had a bill two years ago that would effectively double their retirement, only theirs. Some of us caught it and exposed them in letters to the editor. Of course they all said they had not even read the bill.

Yes, we have a cost of living. It's referred to as a 13th check. I elect to get mine on December 15. There is the option to have that divided among the 12 monthly checks. I'd rather have a Christmas surprise though. That way I don't even have to balance a checkbook in December or January. It multiplies exponentially. For example if the first year after you retired, the formula granted you an $800 COLA, then it grows by $800 each year, so that in your tenth retirement year, your COLA check would be $8000. It's a guaranteed growth COLA, in that it cannot be diminished or discontinued even with market fluctuations.

awilliams

Anne- Do you subscribe to our newsletter for nonprofit and public employers, Benefits and Compensation Law for Nonprofits? We covered the FICA/SSA withholding in a past issue, I believe. The newsletter is a great way for public employers to keep up to date on these types of benefit developments. It may come in handy for you in the future. I'm sorry I don't have any better help for you right now. x:-(

Anne Williams
Attorney Editor
M. Lee Smith Publishers, LLC

Hunter1

Anne: You shouldn't be ticked at SSA, the states are generally responsible as kind of a pass-through for this type of information to local governments. That said, I haven't received the notification from my state retirement agency yet either. At least not that I remember. We did pick it up from several other sources though.