Contribution Rates & Reporting

Employers who participate in our Plans are required by law to enroll and report Pensionable Compensation for all eligible employees.  Accurate reporting of contributions is critical to ensure members receive proper credited service, as well as establish appropriate salary information in determining future retirement benefits.

Contribution Rates - Employee and Employers

Clicking on the link below will allow you to open an Excel file(s) that contains employee and employer contribution rates, based on an employee's Membership Tier, in all three Plans (Public Safety, CORP and EORP).  The spreadsheets contains 5 tabs--2 for Public Safety, 2 for CORP and 1 for EORP.  Rates are found in the "Rates" tabs.  Enter your Employer ID in cell A4 to find Public Safety and CORP rates.  If you do not know your employer ID, you can find it in the "Employer ID" tabs.  EORP rates are the same for all employers, so are shown in a table.

Contribution Reporting

Our Employer Payroll Portal is used to submit your contribution files to PSPRS and for employers to perform the Employee Lookup feature to determine membership tiers, contribution rates, notify PSPRS when a new employee is hired, terminates, goes on a leave, or returns to service.  The following "how to" tutorials may be helpful as you enter demographic and contribution information:

In order to view invoices that are generated when contribution files are submitted, you must be registered to use Wells Fargo's E-Bill Express.  If you have not yet registered, please contact our office at finance@psprs.com to get registered.  You do not need to pay your contributions on E-Bill Express, but you can use the E-Bill Express site to pay by ACH, electronic check or credit card.  Employers are encouraged to remit contribution payments using electronic funds transfer; however, the System will accept contribution payments made by check.  For those employers who wish to remit contribution payments by check, they must do so by mailing payments to:

PSPRS/CORP/EORP
P.O. Box 17670
Phoenix, AZ  85011-0670

By law, contribution payments are to be made no later than 10 days after the end of each employer's pay period.  Failure to remit payments on a timely basis will result in assessment of penalties and interest as provided by state statute.  Contributions withheld from member’s paychecks are done on a pre-tax basis.

Alternate Contribution Rate (ACR)

Legislation passed in 2011 which requires employers to pay an Alternate Contribution Rate (ACR) when they employ a PSPRS, CORP or EORP retiree.  This rate is strictly charged to the employer as a way to lessen any potential actuarial impact caused by hiring a retiree in a position that would normally be filled with a contributing employee.

The ACR is individually set for each participating employer group and determined each year during the System’s annual actuarial valuation. The ACR is the result of combining the amortized unfunded liabilities for both the cost of pension and health, with a minimum amount of 8% in PSPRS and 6% in CORP.  Employers can access this information from the Contribution Requirement section in their annual Individual Actuarial Valuation Report.  For the EORP ACR and Retirement Path information, see EODCRS.

Employers must report ACR data and payments using their normal payroll reporting processes to the System.  This would include uploading data through the Employer Payroll Portal.  Employers who submit late ACR payments are subject to interest being charged against those payments.

For more information on contribution reporting and payment remittance, please contact our Active Members Department.

Determining Pensionable Compensation

In order to properly report wages and withhold contributions, employers need to understand what is considered compensation.

Compensation for PSPRS Members

What is included as pensionable compensation

What is NOT included as pensionable compensation

  • Base salary
  • Shift differential pay
  • Military differential pay
  • Holiday pay
  • Overtime pay
  • Sick time used
  • Vacation time used
  • Compensation time used
  • Pay earned by third party contracts between public agencies
  • Longevity payments, as long as it is paid at least every 6-months
  • Lump sum payments of accrued unused vacation time
  • Lump sum payments of accrued unused sick time
  • Lump sum payments of accrued unused compensatory time
  • Uniform allowances, car allowances or other fringe type benefit payments

 

Compensation for CORP Members

What is included as pensionable compensation

What is NOT included as pensionable compensation

  • Base salary
  • Shift differential pay
  • Military differential pay
  • Holiday pay
  • Sick time used
  • Vacation time used
  • Compensation time used
  • Lump sum payments of accrued unused vacation time
  • Lump sum payments of accrued unused sick time
  • Lump sum payments of accrued unused compensatory time
  • Overtime is not considered base salary
  • Uniform allowances, car allowances or other fringe type benefit payments

Compensation for EORP Members

What is included as pensionable compensation

What is NOT included as pensionable compensation

  • Gross Salary
  • Lump sum payments of accrued unused vacation time
  • Lump sum payments of accrued unused sick time
  • Lump sum payments of accrued unused compensatory time
  • Uniform allowances, car allowances or other fringe type benefit payments

Pensionable Compensation Limits

The legislature has set limits to the amount of compensation that is considered “pensionable compensation.”  For all tier 1 and 2 members, the compensation limit mirrors the limits set for 401(a) plans by the Internal Revenue Service.  For 2018, the compensation limit is $275,000.  Once a Tier 1 or 2 member reaches $275,000 in pensionable wages, both employee and employer contributions (including legacy contributions) cease for the rest of the year.  In accordance with statute, the compensation limit is monitored on a fiscal year basis.

For Public Safety Tier 3 members, the compensation limit in 2018 is $110,000, per A.R.S. §38-843.04.  The limit applies to both Tier 3 DB members and DC members.  Once a Tier 3 Public Safety member reaches $110,000 in pensionable compensation, all employee and employer contributions cease for the rest of the year.

For Tier 3 corrections officers, the compensation limit is $70,000, per A.R.S. §38-895.01.  The limit applies to both Tier 3 DB members and DC members.  Once a Tier 3 corrections officer reaches $70,000 in pensionable compensation, all employee and employer contributions cease for the rest of the year.

For both Public Safety and CORP, the limit will be adjusted every 3 years based on the average change in a specific wage index.  The compensation limit for Tier 3 members is monitored on a calendar year basis, not a fiscal year basis, based on pay period ending dates that fall within that calendar year.

Once a member reaches the pensionable compensation limit, our system will no longer allow you to submit contributions for the rest of the year.  Please use the demographic tool to change the member's status to "Compensation Limit Reached" so that the member will continue to accrue service, even though they are not contributing to the plan.  The nonpayment reason code is "CL".