TRS Links Related to Penalty Interest.
Penalties and Interest.
It was noted that TRS changed their calculation of PI such that TAMUS PCTs should no longer create PI charges (See email below). TAMUS.
However, Workday retro processing does create situations where PI is assessed. The retro entries fall into two categories:
Type A – most often this is late enrollment in the Workday TRS benefit plan
- TRS member and employer contributions are not captured with the original payrolls.
- Once the employee is enrolled in TRS with a retroactive effective date, Workday (correctly) goes into arrears and collect TRS for prior periods on subsequent pay periods.
- The TAMUS TRS-TEAM integration correctly reports these as RP25 adjustments to prior periods.
- PI is calculated and due
Action items for Type A
- No action item for the integration, PI is correct and due.
- Continued effort by SBA and benefits to enroll employees timely.
Type B – Compensation paid after initial pay period
- Employee is compensated for a prior period. Employee is accurately enrolled in TRS and TRS is deducted appropriately.
- The TAMUS TRS-TEAM integration incorrectly reports these as RP25 adjustments to prior periods. This compensation is really “current” activity since the TRS deductions coincide with actual gross payment compensation. The fact the work was performed in a prior period does not mean it has to be reported as an RP25 adjustment.
- Note, this can include compensation adjustments for prior periods.
TRS TEAM was changed Effective 06/2019
- Change the TAMUS TRS team integration to report “Type B” cases above as regular RP20 records. This was done by by determining if eligible gross pay earnings are included with the TRS deductions. If gross pay is included, then send the contribution as an RP20 for the current period.
From: Teacher Retirement System of Texas <TRS@public.govdelivery.com>
Sent: Thursday, May 16, 2019 4:20 PM
Subject: Change in Calculating Penalty Interest on Prior Month Adjustments
|TRS’ goal is to minimize Penalty Interest (PI) charges in situations where the employer is reallocating salary from one funding source to another. In order to accomplish this, a recent enhancement was put in to the system to change the way PI is calculated. For records reported for the current report month (RP20 and ER20), PI will continue to be assessed if the TEXNET deposit is submitted after the monthly due date.
The updates to PI calculation are as follows and will go into effect after the maintenance release this Sunday, May 19, 2019:
Adjustments submitted on a regular monthly report (RP or ER report)
Adjustments submitted on a separate adjustment report (RP Adjustment or ER Adjustment report)
*The settlement date of the TEXNET deposit is generally the business day after the date the deposit is submitted through the comptroller. If the settlement date is changed to a later business day the deposit will be considered late.