The year 2020 has already been challenging for everyone, and we want to make sure it does not get any more challenging for our employer partners. The ASRS is dedicated to the continued education on different statutes, law changes, and/or updates that may directly affect each employer.

An unfunded liability can be very costly to an employer. The ASRS wants to ensure you, the employer, that with proper reporting of contributions and membership, the employer can avoid these costs. Please be vigilant when submitting contributions. If you have any questions regarding a person’s membership or eligible contributions, please submit an Employer Secure Message or call your Employer Quality Analyst (formerly known as Employer Liaison).

A.R.S. § 38-748 requires an employer to pay to ASRS any unfunded liability that results from the ASRS providing benefits or service credit to a person if the employer paid contributions for that person and they were ineligible for ASRS membership by statute. SB1016 made some changes to this statute.

If the person was ineligible for ASRS membership by rule, this law will still apply.

If the person was eligible for ASRS membership, but the employer-paid contributions for that member on monies, which were not ASRS eligible compensation, then this law will apply.

A recent review of employer reporting indicated that a few of our employers might not fully grasp all of our reporting requirements. Examples include using an incorrect pay code to report compensation, reporting incorrect hours worked, or reporting if an employee works a nine, ten, eleven, or twelve-month schedule. It is critical that information submitted by our employers be as accurate as possible as this information is posted to our member’s account and used to make decisions on their retirement.

A couple of examples of improper reporting include: employers giving us their employee’s FTE instead of the hours they have been engaged to work. The ASRS may see someone with wages that appear to be full-time, but the employer reported the hours at one hour per pay period instead of 80.0 for a bi-weekly pay report. A person only working one hour per pay period does not meet membership. Some members’ reported hours are multiples of 80, such as 240 or 320. Please review your reports for excessive hours. We have seen cases in which employers leave the hours blank for salaried employees because those hours may vary. The question is not whether you and your employees kept track of every hour they worked: The question is how many hours they were compensated for, or as our statutes say, “engaged to work.” If you expect an employee to generally work 40 hours per week, but then some weeks they only work 25 hours and other weeks they work 60 or 70 hours, use the 40 hours per week and report 80 hours for a bi-weekly schedule.