CalSTRS Benefit Overpayment to Retirees – AB 1667

Attached please find the recently issued CalSTRS Employer Circular Letter 22-4 Volume 38 Issue 4: New 2023 statutes impacting CalSTRS.
The circular summarizes several new statutes impacting CalSTRS, including AB 1667 regarding Benefit Overpayment to Retirees.
* Districts and Unions can request advisory letters from STRS on reporting compensation before payroll. * STRS will publish resources annually that interpret and clarify the applicability of creditable compensation and creditable service. * New STRS audit and appeals process. * Overpayment to retirees and recovery from the employer.
CalSTRS has created a Frequently Asked Questions page on CalSTRS.com to help answer some employer questions about what AB 1667 does and when it takes effect. The webpage can be found at www.calstrs.com/assembly-bill-1667-employer-faq.
If you have any additional questions about AB 1667, please contact EmployerTraining@CalSTRS.com<mailto:EmployerTraining@CalSTRS.com>.
Regards, School Business Advisory Services Team Santa Barbara County Education Office www.sbceo.org/sbas<www.sbceo.org/sbas>
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Payroll Rates & Limits 2023 – updated

Attached is the updated Payroll Rates & Limits for 2023.
Updated:
* The PERS annual maximum wages cap changed for PEPRA members to $146,042 or $175,250. * See CalPERS Circular Letter #200-001-23 2023 Compensation Limits for Classic and PEPRA Members www.calpers.ca.gov/docs/circular-letters/2023/200-001-23.pdf
Regards, School Business Advisory Services Team Santa Barbara County Education Office www.sbceo.org/sbas<www.sbceo.org/sbas>
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Payroll Rates & Limits for 2023

Attached is the Payroll Rates & Limits for 2023. The highlights are:
* The California minimum wage increases to $15.50
* IRS standard mileage rate increases to 65.5 cents per mile.
* The 403(b) and 457 contributions limits increases to $22,500, and for employees age 50 and over to $30,000.
* Medical Flex Spending Arrangement (FSA) Reimbursement increases to $3,050.
* Social Security wage cap increases to $160,200 with the contribution limit to $9,932.40.

Regards, School Business Advisory Services Team Santa Barbara County Education Office www.sbceo.org/sbas<www.sbceo.org/sbas>
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W-2 Reporting

W-2 Reporting
SBAS uses the information contained in Escape to process W-2 forms on behalf of districts and transmit electronic files to the IRS and EDD. Our office sends the printed W-2 forms to the districts for distribution to employees. In order to assist you, the following W-2 Reporting Information is now available on the SBAS Website<www.sbceo.org/domain/273>:
* W-2 processing and distribution * Payroll Year-End Calendar * ACA Year-End Calendar * Group Term Life Insurance * Domestic Partner Insurance * IRS & EDD Resources
This page will be updated if additional information becomes available.
Regards, School Business Advisory Services Team Santa Barbara County Education Office www.sbceo.org/sbas<www.sbceo.org/sbas>
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STRS – Annual Return of Excess DB/DBS Employee and Employer Contributions

Annual Return of CalSTRS Excess DB/DBS Employee and Employer Contributions Instructions and Overview
Annually, the California State Teachers’ Retirement System (CalSTRS) looks at all of a member’s reported compensation after the fiscal year is over. Compensation earned by a member that is greater than one year of service credit in the Defined Benefit (DB) Program is moved by CalSTRS to the Defined Benefit Supplement (DBS) Program. This action results in “excess contributions” paid by both the employer and employee because contribution rates for the DB and DBS Programs are different. www.calstrs.com/defined-benefit-supplement-program-faq
Each October, CalSTRS returns excess employee and employer contributions to the County Office for distribution to districts and their employees. CalSTRS also sends employee adjustment data that the County Office converts for posting into Escape for each district. To see the employee transactions posted for your district and to correct any errors, follow the path and instructions below:
* HR/Payroll – Employment – Additional Contrib/Deduction * Select the “List” Tab and “Open” * Choose the “Employees” Tab to see a listing of the applicable employees with a return of excess contributions. * No further action is necessary for these transactions. * The adjustment batch has been posted as part of the upload process performed by the County. * The adjustments apply to the October Regular payroll. * Select the “Errors” Tab. * If there are employees listed in the Errors Tab it is mostly likely because the employees are no longer active in Escape. * Adjustments for this group of employees must be manually input by the district. Input data as deduction adjustments using Deduction I.D. “STRSECEE” to return the taxable income to the applicable employees. * For assistance on inputting these adjustments, please contact Sheng Xiong sxiong@sbceo.org<mailto:sxiong@sbceo.org>.
Employee deduction adjustments use monies held in the STRS Employee Trust Fund (9980) for the return of contributions.
* For non-Escape districts, please refer to Journal Entry CT 23-00465 dated 10/07/2022. * If your district would like a listing of the applicable employees in an Excel file, please contact Sheng Xiong at sxiong@sbceo.org<mailto:sxiong@sbceo.org>.
Employer contributions are transferred from the STRS Employer Trust Fund (9983) and placed into each district’s general fund as a lump sum.
* See attached 2021-22 Totals – All Districts.pdf for a list of each applicable district and their respective employee and employer excess contribution refund amounts. * Refer to Journal Entry CT 23-00490 dated 10/17/2022. * The account coding is 01-0000-0-1110-1000-3101-000-0000-ADJS. * The basis for the account coding is the California School Accounting Manual (CSAM) Procedure 560 Abatement of Expenditures.
For questions about the return of CalSTRS excess contributions, please contact:
Sheng Xiong sxiong@sbceo.org<mailto:sxiong@sbceo.org> Myron Porter mporter@sbceo.org<mailto:mporter@sbceo.org> CalSTRS Contributions@CalSTRS.com<mailto:Contributions@CalSTRS.com>
________________________________ Overview of Excess Employee and Employer Contributions related to the DB and DBS Programs
* Annually, CalSTRS looks at all of a member’s reported compensation after the fiscal year is over. Compensation earned by a member that is greater than one year of service credit in the DB Program is moved to the DBS Program. This action results in “excess contributions” paid by both the employer and employee because the contribution rates for the DB and DBS Programs are different. * In September, CalSTRS notifies active members that have excess contributions with an online message of Retirement Progress Report in Special Messages. Members see this information while logged into their myCalSTRS account and may also select Services, then Excess Contributions to see the report. CalSTRS informs retirees with excess contributions by letter. * In October, excess employer and employee contributions for active members are returned to the County Office for distribution to employers. Employers are responsible for returning the contributions to their employees. * After the end of each quarter, any excess contributions accumulated for members who refund, retire, receive a disability benefit, or die are returned to the County Office and transferred to the employer for disbursement. * Interest is not paid on excess contributions as CalSTRS has no legal requirement or authority to pay interest on the return of excess contributions. * Returned pre-tax contributions are taxable income in the year employees receive them regardless of when the contributions were initially paid. * If there is an adjustment that reduces a member’s excess service credit from a prior year, employer or member contributions may be due back to CalSTRS. * January 2, 2001 * Moving of contributions into the DBS Program from the DB Program began. * No adjustments to contributions were necessary because the contribution rates for the DB and DBS programs were the same. * January 1, 2001 to December 31, 2010 * One-fourth of a member’s 8% DB retirement contributions were moved into the DBS program. * January 1, 2011 to present * DBS Program receives contribution funds based on: * Earnings in excess of one year of service credit. * Special limited term payments. * See attached CalSTRS Employer Information Circular on Creditable Compensation Regulations Effective Jan. 1, 2015 (Volume 30; Issue 5, Dec. 10, 2014). * July 1, 2014 to June 30, 2022 * Contribution rates for the DB and DBS Programs are not the same. * This occurred with the passage of AB 1469, the CalSTRS 2014 Full Funding Plan<www.calstrs.com/plan-funding> (Ctrl + Click to connect to the link to see the plan). * More information on excess contributions can be found on the CalSTRS website. Type in “excess contributions” in the search box. * The attached CalSTRS Welcome to CalSTRS booklet, Welcome to CalSTRS 2022, page 9, provides an explanation of excess contributions to new members.
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Regards, School Business Advisory Services Team Santa Barbara County Education Office www.sbceo.org/sbas<www.sbceo.org/sbas>
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Payroll Alert: Fraudulent Emails Requesting Direct Deposit Changes

Dear School Business Professionals,
Fraudulent Emails Requesting Direct Deposit Changes – All districts should be aware that more attempts at fraudulent behavior targeted at government agencies related to Direct Deposits are being discovered. See below for more information.
Posing as district employees, cyber criminals contact school districts by emails (or even sometimes by phone), requesting changes in direct deposit account information. Districts are advised to be wary of any unsolicited emails (or calls) of this nature and are strongly encouraged to implement a procedure for authenticating all direct deposit change requests before inputting into the financial system. A phone call to the employee’s contact information on record to confirm requested change is suggested. Please be vigilant when accepting changes to direct deposit information. Verify the person in multiple ways. As mentioned above, use a phone number that you have in the district’s records (not the email requesting a change) to verify staff requesting a change to direct deposit information.
We are requesting that districts exercise extreme caution with these types of requests and place extra measures in place to verify individuals. We highly recommend following up with employees personally to confirm that the form received was indeed submitted by the employee. If you have any questions about this, please contact the SBAS payroll team for assistance.
Thank you for keeping your employees’ pay safe!
Regards,
School Business Advisory Services Team Santa Barbara County Education Office
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