Tier 4 Catch-Up Deductions in the 4/13/18 Check Date
The 2017 SEBAC Agreement defined a new Tier 4 Pension Plan, which has both a traditional Defined Benefit (DB) component and a new Defined Contribution (DC) component.
Each of these components include both employee and employer share deductions. Due to the delayed implementation of the Tier 4 Plan, Catch–Up deductions have been created to collect the missed contributions for both the employee and employer shares.
Tier 4 Employees will have TWO permanent employee share deductions:
A Defined Benefit deduction and a Defined Contribution deduction.
As well as TWO temporary Catch–Up employee share deductions (Defined Benefit and Defined Contribution). The Catch-Up deductions will end with the final payment on the check dated 6/22/18. The amount of the deduction will depend upon salary and date of hire.
There are also corresponding Employer shares for each. The DB deductions were added by the agencies; the DB Catch-Up, DC and DC Catch-Up deductions were added centrally.
For example, for an employee hired into Tier 4:
1 - RSER4 is the permanent DB retirement deduction; RSERER is the permanent DB employer share.
2 - CDSER4 is the corresponding DB Catch-Up Deduction. There is no employer DB catch-up.
3 - RSERDC is the permanent DC deduction: RSERDR is the permanent DC employer share.
4 - The DC Catch-Up for employee begins with KCEE and the employer DC Catch-Up begins with KCER; the rest of the deduction code values depend on employees’ date of hire. For example, if an employee’s first check was 3/29/18 the DC deduction code is KCEE01 (KCER01 employer share). If the employee’s first check was 8/18/17 the DC deduction code is KCEE17 (KCER17 employer share).
Note: Many Tier 4 employees were hired prior to when Tier 4 codes became available and were temporarily enrolled in Tier 3. These employees will also have a Tier 3 Catch-Up deduction that will end in June.
Tier 4 Employees will see the new deductions in their 4/13/18 check. The Tier 4 Catch-Up Deductions will continue for the remaining 6 check dates in Fiscal Year 2018.
A detailed Comptroller’s Memorandum explaining the DB & DC Tier 4 Catch-Up Deductions is forthcoming.