Covered Compensation

Compensation and Contributions

Employee and employer contributions are required to be made to SERS based on an employee’s SERS compensation. The employee contribution rate is 10% and the employer contribution rate is 14%. Contributions must be remitted through eSERS no later than five business days after each pay date.

Compensation includes all salary, wages, and other earnings paid to an employee by reason of employment. It is important for employers to remit contributions promptly and accurately — employee or survivor benefits depend on accurate compensation information reported to SERS.

Section 1

What Is Covered Compensation

Compensation is determined prior to the amount deducted as the employee’s contributions and before any compensation is treated as deferred income for federal income tax purposes.

Compensation Subject to SERS Contributions

Compensation subject to SERS contributions includes, but is not limited to:

  • Regular base salary and hourly wages
  • Overtime paid to non-exempt employees
  • Pick-up on Pick-up Plan
  • Pay for used vacation and sick leave
  • Paid holiday and calamity days
  • Across-the-board retroactive wage settlements
  • Longevity/length of service payments (per written contract or policy applicable to all employees)
  • Merit increases
  • Employee payments to an eligible retirement plan (e.g. 403(b), 457(b), 401(k))
  • Backpay awards reinstating an employee without interruption (submit within same fiscal year to avoid interest)
  • Extended days and commissions per contract
  • Workers’ Compensation Salary Continuation
  • Lump sum payments, retention payments, education payments, and signing bonuses (must be provided for in a collective bargaining agreement, individual contract, or school district policy)

Compensation Not Subject to SERS Contributions

Compensation not subject to SERS contributions includes, but is not limited to:

  • Unused compensatory time (comp time) cash out
  • Unused leave time (vacation/sick/personal) cash out
  • Attendance bonuses for limited use of sick leave
  • Wellness rewards for achieving measurable health goals
  • Recruitment referral payments
  • Severance payments
  • Discretionary bonus payments not governed in a contract
  • Amounts paid for insurance coverage or in lieu of insurance
  • Incidental benefits including lodging, food, laundry, uniform allowance, and parking
  • Reimbursement for job-related expenses including moving and travel expenses
  • Compensation exceeding the allowable federal tax law limit
  • Anything of value paid based on or attributed to retirement or an agreement to retire
  • Military differential pay for active duty exceeding one month
Section 2

Determinations of Compensation

If there is a question about whether a payment is subject to SERS withholding, including settlements and grievances, the employer should request a written determination from SERS before the payment is issued.

Requesting a Determination

Submit your request in writing prior to the payment being issued to the member. Depending on the type of payment, Employer Services may request supporting documentation including a copy of the contract, collective bargaining agreement, school district policy, salary schedule, or settlement agreement. SERS may request additional information to make a determination.

Outcome of Determinations

If the employer does not request a determination and the payment is later determined to not be SERS compensation, any contributions received are considered unauthorized and refunded to the employer once the employee’s account is adjusted in eSERS.

If the payment is determined to be compensation, a charge will be made to the employer for both the employee and employer contributions plus interest. Once the cost has been calculated and submitted, the employer has until June 15 to send payment.

Section 3

Contributions and Due Dates

Employee contributions are deducted from the employee’s compensation each payroll period at the current contribution rate set by the Board. The employer remits a separate contribution. Both must be remitted promptly — failure to do so may result in penalties.

Contribution Rates

The employee contribution rate is currently 10%. The employer contribution rate is 14%. Per-pay contributions are to be remitted to SERS no later than five business days from the pay date.

Due Dates

Payments for employee contributions and employer contributions (for employers not using the ODEW Foundation Program) are to be remitted to SERS no later than five business days from the pay date. Payment of employer contributions for employers using the Foundation Program is always considered on time.

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