Chapter 10: Account Activity

In this section

This chapter provides information about the DRS receivables management system, including: 

• Interest
• Payments
• Current account activity
• Working with employer invoices

Employer responsibility

Each employer is responsible for making prompt and accurate payments to DRS.

Receivables

What is a receivable?

A receivable exists when DRS has a legal obligation to pay and collect the amount owed. This includes but is not limited to member and retiree overpayments, contributions and employer correction invoices. A receivable is also the accounting record of the amount owed, along with any adjustments and payments.

Adjustments are changes to the receivable that affect the total amount due. An example of an employer-generated adjustment is a transmittal correction (TC). DRS can also initiate an adjustment, such as a correction to interest charges.

Open item receivables

An open item receivable is a receivable with a net balance other than zero. A receivable remains open until the balance equals zero. If an adjustment changes the balance on the receivable, it is not a separate open item; it will be attached to the specific invoice. When the receivable balance is zero and shows as zero on your Pending Receivables tab in ERA, the receivable and all payments and adjustments are closed. No further information for this receivable will show in your current account activity under Reports\Current Account Activity in ERA.

Multiple regular transmittals processed in the same reporting period will process as one receivable. 

Interest

How is interest calculated?

Interest accrues daily on outstanding debit balances for each receivable. Interest charges post once a month to each receivable.

Interest is charged on each past due receivable balance rather than on the overall account balance. Interest is calculated daily on the daily balance. Then interest is posted once a month on the balance of each receivable with a debit balance. Multiply the daily rate, times the outstanding balance, times the applicable number of days, to determine the amount of interest due.

To calculate the daily rate, use the following equation: 

0.12 / 365 (days per year) = .0003288 daily rate

Interest will show as a line item adjustment to the assessed receivable. This gives you an audit trail between the interest and the calculated amount. DRS doesn’t apply interest to credit balances.

How does DRS make adjustments to interest?

When interest on a receivable is charged in error, DRS will continue to adjust or remove interest as necessary. Adjustments to previously assessed interest are taken into consideration.

Submit a request to remove interest charges you believe are in error. Your request must be in writing, received within 90 days of the date the interest posts to your account and include a description of the error.

Payments

When are payments due and past due?

Payments are due the 15th of each month after the report period month. Payments are past due if not received three business days after the due date. Interest will accrue beginning the 16th day on any past due receivable and will post at the close of the third business day after the 15th. Adjustments to interest assessed on past due receivables will be processed and displayed on your current account activity report.

Transmittal reports and receivables payments

• The transmittal report period is equal to the month paychecks are issued.
• The due date for regular transmittal reports is the 15th day of the month after the report period month. This due date also applies to all contribution payments and any other employer receivable payments due to DRS.
• Timely date is three business days following the due date.
  • Transmittals not received by the timely date are subject to a penalty assessment.
  • Receivables not paid in full by the timely date are subject to interest accrual starting the 16th of the month regardless of the method of payment. See “How interest is calculated.”

To access detailed instructions on payment procedures including creating payment advices and submitting payment, log in to ERA, select Help at the top right, then select Payments and Accounting to submit payments.

Deferred Compensation Program (DCP) and Plan 3

• You must submit payments to DRS before, on or soon after each payday. Reports received more than five days beyond an employer’s payday will be considered late.
• DRS will process DCP reports the day they’re received if the money and the report are received together and can be reconciled.

Insufficient payments

If your payment isn’t sufficient to cover the receivable balance, all interest will be paid first. We’ll apply any remainder of the payment to the invoice amount.

To access detailed instructions on setting up your bank accounts, log in to ERA, select Help at the top right, then select Payments and Accounting/Add a bank account.

Current account activity

It’s important to review your current account activity report each month to verify whether your contribution transmittal report and payment are equal. If you report correctly and make accurate payments, the current account activity report will show a zero balance.

If the current account activity shows an outstanding receivable balance, you’ll need to reconcile your account.

• Any receivable with a balance – either a debit or a credit – will remain on your current account activity report
• If the outstanding balance is a debit, interest will accrue from the 16th of the month it was due until it’s resolved

The current account activity report reflects the activity in your account between the last and current report dates. The current month will detail transmittal report information. Any receivable with a balance of $5 (positive or negative) will continue to appear on the current account activity report until the balance is reconciled.

For each retirement system and plan, the information available includes:

• Member and employer contribution amounts reported on your transmittal
• DRS-recalculated member and employer transaction totals
• DRS-rejected member and employer transaction totals
• DRS-calculated amounts (member and employer contributions) reflected as the final contribution transmittal (CT) invoice amount
• Invoices generated by DRS, such as an arrears billing
• All payments and adjustments

The current account activity report includes account information for each retirement system and plan you participate in. You can search by various criteria including combinations of:

• Invoice number
• Report period
• System plan fund
• Due date begin
• Due date end
• System plan fund
• Receivable type

The system returns all the details of the account activity within these parameters.

The monthly transmittal report you send DRS provides the information used to determine your contribution billing amount. The amount due is the total of the employer and employee contributions based on your employees’ compensation and the contribution rates for the earning period(s) being reported.

The invoice amount is the result of processing the transactions submitted on the transmittal report. If DRS rejects or recalculates contributions, the invoice will reflect the adjustments.

Here’s how your account is processed each month:

• By the 15th of each month, you must send the transmittal report and contribution payments to DRS
• DRS receives and posts payments daily
• DRS processes the transmittal information. If any information is changed or rejected, ERA will create transmittal edit messages. For more information about working with transmittal edit messages, log in to ERA, select Help at the top right, then Reporting, and choose the desired topic
• DRS posts all invoice information
• DRS applies interest charges on past due receivables

We mail invoices and post them to your current account activity on the first day of the month or the next business day if the first day falls on a weekend or a holiday.

We mail audit adjustment invoices and post them to your current account activity the day they’re approved.

For non-taxed periods, most invoice types reflect adjustments to both member and employer contributions. For taxed periods, the adjustments are to employer contributions only.

Procedures for working with your current account activity

The contribution transmittal (CT) invoice shown on your current account activity report relates to a particular earning period. You may have reported several earning periods within a reporting period. While the earning period determines the contribution rate, the account information will be displayed on the current account activity report by reporting period.

You can adjust a specific CT invoice amount by submitting a correction report before the next regular transmittal report. If you have rejected data, submitting a correction report before your next report is posted will reduce the need to do a credit redistribution.

Re-reporting that previously rejected information on next month’s regular report will show on the current month’s invoice. This requires the use of the Credit Redistribution Form to reconcile the outstanding balances.

Reconciling your account

Review your current account activity each month to reconcile your account.

• If you make payments to more than one system or plan, make sure the correct payment was posted to the appropriate system and plan.
• Verify the CT invoice and any invoice adjustments agree with the amount you reported. If the amounts are different, review the corresponding edit message report and take the steps necessary to reconcile your account.
• Verify that all invoices received by your office and the payments you have made are shown on the current account activity report.
• Check that all credit redistributions have been posted correctly.
• Check the items (if any) on your correction report.

Reconciling each receivable

• If your current account activity report shows a receivable with a balance $5.00, (a positive or negative amount) you need to reconcile the outstanding balance.
• Gather the documents relating to the invoice. This might include:
  • A copy of the monthly transmittal report you submitted
  • A copy of transmittal correction reports, if any were submitted
  • Any DRS edit reports you received
  • A copy of the Payment Advice form you submitted
  • Copies of any Credit Redistribution forms, if any were submitted
  • Copies of any invoices you received
• Verify that payments were posted as detailed on your Payment Advice form and that debits and credits were moved as detailed on your Credit Redistribution form. If there are discrepancies, contact a DRS account manager.
• Compare the Contribution Transmittal (CT) invoice and any correction report adjustments on your Current Account Activity report with the amount you reported on the transmittal(s). If the figures don’t match, refer to your edit reports for an explanation of any differences.
• If the difference in the CT invoice amount or any adjustments are the result of a reporting error—such as a plan error or a recalculation error—make the necessary corrections with a correction report or on your next regular report. (See Chapter 9 for instructions on how to correct errors shown on the edit reports.)
• If you’ve determined there are total dollar amounts out of balance, report the necessary information on the transmittal report. Submit payment due or complete a Credit Redistribution form to move credits.
• Once we’ve received and processed your corrections, payments and completed forms, your Current Account Activity report will reflect this activity in your account. Check the following month’s Current Account Activity report to make sure the outstanding balance has been reconciled.

See the Employers Publications and Forms section for a complete list of employer forms.

Submitting the payment advice

A Payment Advice form must accompany all payments to DRS. ERA will help you create and submit the Payment Advice. For instructions, log in to ERA, select help at the top right, select Payments and Accounting, and submit payments electronically.

If you need additional information, contact a DRS account manager.

Credit redistributions

Use the Credit Redistribution form to reconcile receivable balances on your current account activity report. Normally, you’ll use the form to move money from one receivable with a credit balance (a negative amount) to another receivable with a debit balance (a positive amount). Note the following:

• Instructions are on the back of the form. If you need additional information, contact DRS Accounts Receivable by calling 800-547-6657, option 6, option 1 or 360-664-7864 or email us.
• You can send the form to DRS at any time; you don’t need to wait until you send your regular monthly payment. If we receive the form by the due date, the credit redistribution should appear on your next current account activity report.
• Make sure you include your name and phone number on the form so the DRS account manager can contact you if there are any questions.
• Don’t enter negative amounts on the form. Amounts you enter in the FROM column post as debits and amounts you enter in the TO column post as credits.
• Make sure you enter the system, plan, invoice number, payment number and amount.
• You can move credits from one system or plan to another.
• If you move money from a receivable with a debit balance, you’ll increase the amount owed to DRS and we will charge you interest.

Plan changes

• If you report a member in the wrong plan, the reported transmittal information moves into the correct plan after the transmittal is processed and a warning message is issued. This does not apply to Plan 3.
• If you’re a non-taxed employer, DRS recalculates the member and employer contributions based on the contribution rates that apply for each plan and adjusts your invoice accordingly.
• If you’re a taxed employer, DRS recalculates the employer contributions only and adjusts your contribution transmittal (CT) invoices for each plan accordingly. Your current account activity report will reflect these changes. To balance your account, you need to complete the Credit Redistribution form and send any monies due with the appropriate Payment Advice form. (Refer to Chapter 9 for information about making the necessary corrections through the transmittal process.) Payments you send to DRS aren’t adjusted. You’ll need to balance your account.

Non-taxed recalculations

The employer and employee contributions due to DRS are determined by multiplying the employee’s compensation by the applicable contribution rates for the earning period reported. If reported contributions aren’t within $0.10 (plus or minus) of the correct amount, DRS recalculates the contributions. Your current account activity report will show the adjusted total. DRS does not adjust payments.

When non-taxed contributions are recalculated, DRS adjusts the CT by the amount of both the employee and the employer contributions when applicable. The transmittal edit messages will document and explain how contributions were adjusted.

If the difference is a credit, you should short your payment for the next month’s transmittal invoice and complete a Credit Redistribution form

You’ll need to submit any debit to DRS.

Once DRS receives and processes the adjustments, the activity will show on your current account activity report. You should check the current account activity report to verify the adjustments were posted correctly.

Taxed contributions

The employer and employee contributions due to DRS are determined by multiplying the employee’s compensation by the applicable contribution rates for the earning period reported. If the contributions are reported incorrectly, DRS will correct the error.

Incorrect reporting of taxed employer contributions

DRS recalculates incorrectly reported employer contributions if they are not within $.10 (plus or minus) of what you should have reported. If the contributions are within $0.10 (plus or minus) of the correct amount, DRS makes no adjustment. Payments you send to DRS aren’t adjusted.

Incorrect reporting of taxed member contributions

DRS doesn’t recalculate taxed member contributions. You’ll receive a warning message with your transmittal edit messages informing you the contributions were incorrectly reported. DRS will flag the member’s account as discrepant. A discrepant transaction could prevent a member from withdrawing contributions or apply the wrong amount of interest to their account. Because these transactions have a negative impact on the member, you should make the appropriate corrections immediately. (See Chapter 9 for information on correcting member account information).

Working with employer invoices

This section provides information about the following employer invoices:

• Invoice for an employer correction (EC): Created when a member’s account adjustment results in an employer obligation or credit.
• Invoice for excess compensation: Sent to an employer when twice the retiree’s regular salary or certain types of cash outs are included in the average final compensation (AFC) period, final average salary (FAS) and average final salary (AFS).
• Penalty invoice: Sent when a transmittal is late.

With the exception of invoices for the contribution transmittal and the transmittal correction, each invoice has a unique eight-digit number to simplify account reconciliation.

CT and TC invoices will be identified by the reporting period of the transmittal report (for example, 052018 for May 2018).

List of invoice types

A

AA-Audit adjustment

Identifies a DRS internal correction to an employer’s account. (For example, billing the employer when a retiree isn’t reported and a benefit is paid in error.)

C

CP-Copy expense

Identifies invoices for photocopies provided by DRS.

CT-Contribution transmittal

Identifies the contribution transmittal invoice based on information reported on the regular monthly transmittal. If your reporting is correct, the CT total on your current account activity report will match the total contribution amount reported on the transmittal. If contributions are recalculated or rejected, the CT total will reflect the DRS adjustment. If there’s a reporting error, the error will be reflected on the edit report. See Chapter 9 for details about DRS edit reports.

D

DC-Member contributions

Identifies member contributions for Plan 3 based on reported information on the transmittal report. 

DI-Interest on retroactive contributions

Created for use with interest on retroactive contributions for the Dolan case.

E

EB-Employer billing

Identifies employer contributions due for a Plan 1 retiree having worked in excess of 867 hours. Only applies to reporting retiree return to work hours before Jan. 1, 2012.

EC-Employer correction

Identifies adjustments to a member’s account and includes plan transfers, system transfers and other types of adjustments. 

EN-New agency

Identifies contributions for current employees that are due for periods before employer participation in a Washington state retirement system. This amount of employer and member contributions is called previous service cost.

EO-Employer overpayment

Identifies member contributions due because of contribution transmittal corrections after a refund of contributions was issued to a member.

L

LS-Lost earnings revenue-self-directed

Loss of investment return on a member’s defined contribution account due to an employer error.

LW-lost earnings revenue – WSIB

Loss of investment return on a member’s defined contribution account due to an employer error.

M

MS-Miscellaneous

Identifies when DRS provides chargeable services.

O

OS-Optional service

Identifies employer contributions due because a member purchased optional service (substitute teachers, for example). For earning periods before Jan. 1, 1999, PS was used (see “PS-Prior service” below).

OA-Old Age Survivor Insurance invoice (OASI)

Annual invoice to participating employers to administer the OASI program.

P

PA-Penalty assessment (transmittal deficiencies)

Identifies a penalty fee for late transmittal reporting by your organization.

PS-Prior service

For earning periods before Jan. 1, 1999, identifies employer contributions due because a member purchased optional service earned before an employer began participating in a retirement system. OS-Optional Service has replaced this code (see “OS-Optional service” above).

S

SC-Statewide City Employees’ Retirement System (SCERS)

Identifies invoice amounts for pension payments to retirees of SCERS. SCERS became insolvent on Jan. 1, 1972, and DRS administers the payments. Since that date, certain employers have been billed for payments to retirees or their beneficiaries still receiving benefits from that system.

T

TC-Transmittal correction

Identifies an invoice that could be generated when you submit a correcting transaction on your transmittal correction report.

X

XC-Excess compensation

Identifies an invoice that is generated when certain types of payments are reported during the period used to calculate the member’s retirement benefit. See a sample of an Excess Compensation Invoice. These invoices typically occur for PERS Plan 1 and TRS Plan 1 retirees and can occur for Plan 2 or 3 retirees if they receive overtime payments that are greater than twice the regular daily or hourly rate of pay.

Adjustments to member accounts

Several invoice types reflect adjustments to member accounts that result in an employer obligation or credit, including EC, EN, EO and OS. The adjustment can be the result of a plan transfer, a system transfer, an error in reporting or another activity.

If payment is due, you will receive an invoice. See a sample employer invoice. The invoice will provide the reason for the bill and the code used on your current account activity report. If you have questions, contact the individual whose name is shown on the invoice. See “Responding to all types of invoices” below.

If DRS owes you a credit, you will receive an employer credit document. This document will explain the reason for the credit. If you have questions, contact the individual whose name appears on the credit document. You will need to complete a Credit Redistribution form to apply the credit to an appropriate system, plan or billing month.

If you need help submitting a payment through ERA or completing a Credit Redistribution form, contact an Account Manager.

Responding to all types of invoices

If a payment is due:

Follow instructions in the ERA help to apply payment to the correct system, plan and invoice number. After logging in to ERA select Help at the top right, then select Payments and Accounting, then submit payments.

For example, if you received this invoice sample, you would use ERA to create a Payment Advice form and apply a payment of $45.56 to PERS Plan 1 for Invoice #123456.

If you are entitled to a credit

Use the Credit Redistribution form to move the credit to another receivable with an outstanding obligation or take the credit by shorting your next payment. If you have questions, contact an Account Manager.

Procedure overview

Apply these procedures when you’re working with a DRS invoice:

• You may submit the payment along with your regular monthly contribution payment, or you may submit the payment separately.
• To move a credit to a receivable with an outstanding obligation, you must complete a Credit Redistribution form.
• You should receive an invoice before you see the billing on your current account activity report. You may receive more than one invoice or credit during a given month. Your current account activity report will show each billing as a separate invoice. Don’t report any of the invoiced adjustments on your monthly transmittal report. (Example of an Employer Invoice)

Excess compensation benefit invoice (PERS and TRS Plans 1 only)

DRS will send you an Excess Compensation Benefit Invoice when a retiring member’s average final compensation (AFC) includes a cashout over 240 hours of annual leave or other payments in excess of regular salary or overtime. You must pay the present value of all present and future benefits attributable to excess compensation. These bills are sent only to employers of PERS Plan 1 or TRS Plan 1 members.

If you have questions, contact the individual whose name and telephone number are printed near the bottom of your invoice.

Penalty invoice

DRS must receive your monthly transmittal report by the 15th of the month to ensure member account information is updated and interest is applied on time. We charge employers for late reporting if the monthly transmittal isn’t received by the third business day after the 15th, and we apply a fixed fee for each day a report is late.

State law permits DRS to assess an additional fee for late or inaccurate reporting. RCW 41.50.110

Deficiency charges aren’t applied for inaccurate reporting such as, rejected transactions, warnings or defaults; however, a penalty assessment fee is applied for late reporting.

If you disagree with any of the charges appearing on the penalty invoice, you can contest any charge by emailing us or writing to DRS at:

Manager, Employer Information Processing
Department of Retirement Systems
PO Box 48380
Olympia, WA 98504-8380

In your letter or email, please indicate the reporting period (or periods) you wish to contest. Submit any evidence you have to support your belief that a charge or charges were made in error. For example, show proof of when you mailed your report to DRS.

You must submit your request for reconsideration of a penalty assessment charge within six months of the date that DRS issued the penalty invoice. Charge(s) can’t be reversed after the six-month period.

DRS encourages you to pay the penalty invoice by the due date even if you are contesting some or all of the charges. If you make your payment on time and a decision is made to reverse any charges, credit for the appropriate amount will be reflected on your current account activity report. If you don’t make a payment while contesting a charge, the invoice might become past due.