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Procedures Manual

4.6: Prior Year Correction of Earnings and Contributions

Last Revised: Feb 1, 2016


Purpose

This index provides procedures for correcting prior year earnings and contributions. “Prior years” are fiscal years for which member statements have been prepared and, therefore, are closed. All prior year corrections are required to be processed online.
Sections

Action to be Taken

Example of Prior Year Salary Correction: Input Screen

Example of Prior Year Salary Correction: With Drop-Down Menu Options

Example of Prior Year Salary Correction: With All Sections/Fields Completed
Related Form

Prior Year Correction of Earnings and Contributions (Form 4F)



 

Action to be Taken

  1. Correct the actual earnings and contributions using the Prior Year Salary Corrections through the Employer/Membership Information site by clicking the “Updates” tab and then the “Prior Year Salary Corrections” tab.
     
  2. Enter system code, member’s Social Security number, and the fiscal year being corrected under the query record, and click “Select.” This will retrieve the earnings and contributions (if any) reported for the year.
     
  3. Enter the required information for the following fields:
    • Actual Earnings (Sheltered/Unsheltered) - should reflect what the reported fiscal year total earnable compensation should have been. 
       
    • Contributions (Sheltered/Unsheltered)only available for 100% Accrual records; otherwise field will not display, system will auto-calculate contributions amount based on Actual Earnings entered and System Code or Retirement Plan.
       
    • Full-Time Earnings – amount employee would have earned if he/she worked full-time for the entire year
      • This information will be used to determine service credit (Actual Earnings/Full-time Earnings = Service Credit).
         
      • Do not enter the same figures for Actual Earnings and Full-time Earnings fields unless the employee worked the entire year and was a full-time employee.
         
      • Exception: Return-to-work retirees do not accrue service credit; Actual Earnings and Full-time Earnings can be the same.
         
    • If no earnable compensation should have been reported for the employee for the specified fiscal year, check the box for “Delete Posting”. Do not enter $0 as the actual earnings amount.
       
  4. Salary Correction Comment Section - must complete Reason or Comment field.
    • Reason field - Select one of the provided reasons from the drop box (if applicable); or
    • Enter Comment to address reason for changing/correcting the Actual Earnings amount.
      • Examples:
        • add’l $500 bonus not reported
        • not elig to contribute on sub earnings
        • moving $1800 add’l comp from FY XXXX to FY XXXX
        • moving salary from Plan B to Regular Plan
           
  5. Salary Correction Full-Time Section – must complete Reason and/or Comment field
    • Reason field -
      • Select Part-time Employee if member works every day & is a part-time employee; or
         
      • Select one of the provided reasons from the drop box (if applicable)
         
    • Enter Comment (recommended) –
      • If member is a part-time employee, you must enter the Percent Effort; or
         
      • Provide comments to help certify the year or to note uncommon or atypical events
        • Examples:
          • dockages or days/days info (if partial year of service credit)
          • worked full year (if service credit should be 1.00)
             
          • less sales tax or less extra pay (if full-time earnings dropped from previous year)
             
          • chgd from 12 mo to 9 mo employee, no break in service (uncommon/atypical event)
             
      • Note: There is a limit for the total number of characters when using Reason and Comment fields from the Salary Correction Comment and Salary Correction Full-Time Sections. Use abbreviations if applicable to maximize the amount of information for each Comment field. 
         
  6. Review the data entered and click “Submit.” A message will be displayed confirming transaction has updated or if update meets criteria for a possible actuarial cost.  Do not fax or send any screen prints.
     
  7. Employers will be charged member and employer contributions plus interest at TRSL’s assumed actuarial valuation rate for corrections to periods of up to three years after the contributions reports were due.
     
  8. Corrections for periods more than three years that would result in an increase in regular salary and service credit are considered a purchase of service credit under LSA-R.S. 11:888C(2) which states, in part, “…if the error is the total fault of the employer, the employer shall pay the total purchase cost.”
    • Employers are required to remit a $150 actuarial fee, and certify any questionable years within 30 days of the date TRSL receives any PY Corrections that date back more than three fiscal years and that increase salary and/or service credit. Effective March 1, 2011, employers can use electronic fund transfers (EFT) to submit actuarial fee payments to TRSL. Employers may still submit checks in lieu of using EFT. However, checks should be made payable to Teachers’ Retirement System of Louisiana. The check or EFT must be received by TRSL prior to any corrections being made.

      For example, if we are in fiscal year 2012/13, corrections may be made for fiscal years 2009/10, 2010/11, and 2011/12 without the required $150. Corrections to fiscal year 2008/09 and prior will require the $150. If employers fail to submit all necessary information within the 30 days, TRSL will return the PY Corrections to the employer as unprocessed. Employers will then be required to resubmit their PY Corrections, which will change the dates used in calculating costs.
       
    • These purchases are computed by TRSL’s actuary using the greater of the actuarial cost or member and employer contributions plus interest at TRSL’s assumed actuarial valuation rate.
       
  9. Corrections resulting in an overpayment will be credited to the employer’s account and may be used to offset current charges.
Example of Prior Year Salary Correction: Input Screen (click to enlarge)



Example of Prior Year Salary Correction: With Drop-Down Menu Options (click to enlarge)


Example of Prior Year Salary Correction: With All Sections/Fields Completed (click to enlarge)

Related Form

Prior Year Correction of Earnings and Contributions (Form 4F)

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