Chapter 5: Special Conditions
School District and Educational Service District Pay Adjustments
Contribution Rate Changes
To correctly report earnings that fall into more than one rate period, you must calculate retirement contributions at the rate in effect when the service was earned. You may need to report compensation using Status Code A, or use a Status Code M for each rate period when a lump sum payment occurs. Refer to Chapter 6, Contributions, for additional information.
Here are examples of how to report pay adjustments for service earned during two rate periods.
Using Status Code A
It is March, and a retroactive pay adjustment is to be paid equally over the remaining months of the school year. There is a contribution rate change April 1. How do you report the pay adjustment?
Because September through March and April through June have different contribution rates, report the payments as earned.
Using Status Code M
In this scenario, there is again a rate change in April but the retroactive pay adjustment is paid as a lump sum in June. How do I report the pay adjustment?
Because the earning periods for the lump sum payment fall into more than one contribution rate period, you will need to report the adjustment applicable to each rate. Report the pay adjustment for August through March in the March earning period. Report the pay adjustment for April through June in the June earning period.