PMRS Employer Guidelines
PMRS is committed to improving the effectiveness and efficiency of pension administration for more than 1,060 plans. By reviewing and following the guidelines below, employers help PMRS deliver accurate, timely, and high-quality service.
Employers are responsible for maintaining plan compliance
- Plan documents must comply with all Internal Revenue Code (IRC) requirements. PMRS issues IRS-approved, tax qualified plan documents upon plan inception. Every 6-7 years, PMRS reviews and restates pension plan documents to keep it compliant with IRC rules. When an update is required, PMRS will contact employers. In many cases, the restatement updates to the pan documents are without any substantive changes to the plans.
- Plans must be administered in accordance with the plan documents. It is important to understand and follow the requirements outlined in the plan documents. This includes accurately submitting required documents on behalf of employees covered under the plan.
- Employers should review their plan annually. The best time for a review is prior to budget approval and collective bargaining.
Employers should understand the plan’s adoption agreement
The adoption agreement includes the variable provisions of the plan that the employer must be aware and familiar with, including:
- Employee eligibility requirements
- Types and amounts of allowable plan contributions
- Participant vesting requirements
- Benefit payment options
Employers should follow PMRS administrative requirements
To ensure plan compliance all plans must:
- Enforce the plan’s provisions for participation, contributions, and distributions
- Provide required plan notices to plan participants
- File required forms and documents for employee plan participants relating to retirements, terminations, newly/rehired employees, contribution options (if applicable), and demographic information changes
- Maintain accurate records for participant accounts
- Bring the plan back into compliance (if needed) and pay any associated interest
Employers should maintain timely communications with PMRS
To ensure accurate processing and payments all plans must:
- Promptly sign any amendments and/or restated plan documents sent from PMRS
- Report accurate payroll compensation and, if applicable, contributions on a quarterly basis
- Submit forms for any hired, terminating and retiring employee plan participants
- Inform PMRS if revisions to the plan are needed including those related to a collective bargaining agreement. A study of estimated costs associated with plan changes may be required and must be approved by the employer’s governing authority and the PMRS Board. Note that PMRS plan documents take precedence over collective bargaining agreements.
Employers should maintain required records for Pennsylvania Auditor General audits
The Auditor General audits all Pennsylvania public pension plans to ensure compliance with applicable state laws, regulations, plan documents and administrative procedures and policies. Examples of this include whether:
- State aid was administered in accordance with Act 205 requirements
- Employer contributions followed the plan’s governing documents and applicable regulations
- Employee contributions (if required) are deducted, and deposited in accordance with the plan provisions and applicable regulations
- Benefit payments are properly determined in accordance with applicable regulations
Employers must maintain all PMRS documentation including (but not limited to):
- Minimum Municipal Obligation (MMO) worksheets and invoices
- Lists of plan participants
- Forfeiture letters
- Retired, vested, and terminated plan participant calculations
- Act 205 (Act 293 for counties) valuations
- PMRS financial reports
- Summary of Municipal Reserve Account
- Cash receipts and member activity
- Governmental Accounting Standards Board (GASB 68) Valuation
- PMRS’ Annual Comprehensive Financial Report (ACFR)
- PMRS’ SSAE 18 (SOC 1 Type 2) report
- Plan documents including the Base Plan, Adoption Agreement and any amendments, ordinances, or resolutions
The Auditor General determines if an employer plan is eligible for state aid
The Auditor General will use the employer’s Act 205 (Act 293 for counties) report which outlines pension plan costs to determine eligibility for the General Municipal Pension System State Aid Program. PMRS includes this on the employer’s Minimum Municipal Obligation (MMO) invoice and worksheet.
Employers should reach out to PMRS to review their Act 205, funding ratio, distress level and/or MMO if they have questions.
PMRS is available to assist with questions or information requests
Contact PMRS’ Client Relations Municipal Relationship Managers at 717-787-2065.
