Payroll User Group Meeting

1
Payroll User Group Meeting

• Wednesday December 5, 2007
• 930 A.M. 1230 P.M.

2
Welcome

• Kevin McHugh Payroll Bureau Director

3
Food Drive

• To Support the Food Pantry at St. Johns the
  Evangelist (on Bowdoin St)
• Thank you!

4
Massachusetts State Employee Credit Union

• Rachel Majorowski
• Ed Connors

5
COMECC 2008

• Scott Olson, HRD

6
SmartPlan

• Bruce Dale and Lisa Tilley

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Payroll Users Meeting

• Massachusetts Deferred Compensation SMART Plan

8
Overview

• The Massachusetts Deferred Compensation SMART
  Plan will be changing record keeping services to
  Great-West Retirement Services (Great-West).
  The transition date of participant accounts from
  ING to GWRS is tentatively scheduled for February
  29, 2008.
• An extensive selection process was conducted by
  the Department of the State Treasurer with the
  aid of an independent consulting firm. After
  evaluating several service providers, Great-West
  was selected based on upon service enhancement
  opportunities and lower participant fees.

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About Great-West

• Great-West is a leading provider of
  employer-sponsored retirement programs for state
  and local governments.
• Great-West services 15 of the 50 states, more
  than any other service provider in the market.
• Great-West also serves four of Americas five
  largest cities (New York, Los Angeles, Houston
  and Philadelphia).

10
Plan Enhancements

• Reduction in Fees to Participants
• Administrative fees reduced by over 25 for
  full-time employees participating in the SMART
  Plan.
• Reduced to .0875 from the current fee of .12 of
  Plan assets
• Enhanced Participant Services
• Ability for participants to make deferral changes
  through the Voice Response System, the Web site
  or SMART Plan representative.
• Ability to defer in either dollars or percentages
  (Minimums are 10.00 or 1 of gross pay per pay
  period).

11
Plan Enhancements

• Enhanced Participant Services (continued)
• More extensive education and account management
  services via the Web site, including the ability
  for participants to personalize an account home
  page
• Wider range of free educational seminars,
  conducted by licensed representatives in more
  locations throughout the Commonwealth
• New call center in Massachusetts dedicated to
  serving the SMART Plan. This is in addition to
  service counselors located throughout the
  Commonwealth.

12
Transition Process

• Changes to payroll processing are being
  coordinated through the Office of the
  Comptroller.
• Payroll processing at a state employer level will
  continue as normal.
• Participant access through the automated Voice
  Response System and Web site will continue using
  the current toll-free phone number and Web URL.
• Dedicated local service offices will be
  maintained in locations across the state.

13
Participant Communication

• In January, a transition brochure will be mailed
  to participants informing them of the change and
  inviting them to attend informational meetings
  offered statewide.
• For now, it is business as usual. Participants
  may access their account via the SMART Plan
  Customer Service Center at 1-877-457-1900 or at
  www.mass-smart.com Account Access.

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Important Dates

• January 2, 2008 Initial announcement sent to
  participants
• January 17, 2008 Transition Bulletin Group
  Meeting Schedule mailed to participants
• January 31, 2008 Last day for enrollment through
  ING
• February 1, 2008 First day for enrollment
  through GWRS
• Month of February Participant Group Meetings
• February 22, 2008 Last day contributions are
  sent to ING
• Last day for participant transactions at
  ING
• February 29, 2008 Transition date assets are
  moved to GWRS
• March 7, 2008 ING provides participant account
  details
• March 14, 2008 The plan is open at GWRS for all
  participant transactions

Please note Dates subject to change.
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Questions?
16
Thank You!

• We look forward to servicing the
• Massachusetts Deferred Compensation
• SMART Plan and its participants!

17
W-2 Distribution and Year End Processing

• Kevin McHugh Payroll Bureau Director

18
Health Care Reform Change

• Legislative changes signed on November 29, 2007
  change the taxation of Non-IRS Dependents (IDH).
• Since the inception of Health Care Reform Act in
  July these amounts have been added to both
  Federal and State taxable gross (and applicable
  Medicare) .
• Change is retroactive (signed in November but
  effective 1/1/07) the employees had State Taxes
  withheld.
• No department action is needed. CTR will adjust
  the W-2 - MA Taxable Gross Balances. Any Tax
  Refunds due will occur when employees file their
  State Taxes.
• CTR and GIC are currently preparing notices.

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Changes to W-2

• (BOX14E Pretax Health insurance) - BOX14E will
  report all pretax health insurance deductions for
  both Connector and Group Insurance.
• (BOX14P - Qualified Parking) The 2007 W-2 will
  report both Federal and State Non-Cash Parking
  under 14P only. BOX14R (former State) will not be
  used.
• (BOX14U BOX14U will report all imputed health
  benefits which include Non-IRS Dependents (IDH)
  and Same Sex Health (IHF). This non-cash benefit
  is imputed income and will be reported in BOX14U.
• These changes will be reflected in the W-2
  Brochure

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W-2 Distribution

• W-2 Delivery
• Update Home Address by January 4
• Postmarked before January 31
• W-2 Returns
• Sent to CTR Key Contact List Payroll Directors
  
• Departments are responsible for re-distribution
• W-2 Reprints
• Instructions are available on CTR/Procedures
  Website
• Stamp Reissue
• HMTAX007 available by January 31
• Non-Official Copy on PayInfo
• W-2C Corrections
• (new) Include a copy of the original W-2 and a
  detailed memo
• Send to Jim Box at CTR
• IRS website or JFK Fed Bldg for forms

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Preparation for Tax Year End

• Payperiod End Date 12/22/07 is the last Tax Year
  Payperiod (Check in Hand 12/28)
• Non Taxable payments are shown on pay stubs but
  will not be on W-2

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Tax Year End

• Review HMTAX010 Report for potential Medicare Tax
  Errors
• Complete Payroll Refunds and Submit to RET by
  12/21 for all Pay Periods prior to 12/22/2007
• Any Payroll Refunds for PPE 12/22/07 must be
  submitted to RET by 12/31/07

23
Deferred Compensation Refunds

• All Deferrals-in-Error or over contributions
  need to be refunded to the employee prior to
  12/31/2007 in order to have the W-2 updated
  correctly.
• Refund requests go to ING a copy to TRE c/o Jane
  Waldron, 1 Ashburton Place, Room 1200, Boston MA
  02108 or fax [phone]

24
Employer Provided Car Benefit

• Non-cash payment included in Paycheck
• Departments should be entering all CAR imputed
  income via HR/CMS
• Period is November 1 to October 31
• Code is CAR (amounts)
• 1.50 per commute or Amount Submitted by
  Employee on OSD Form
• See OSD Memo issued in October

25
Housing Allowance

• Cash payment
• Departments should be paying all Housing payments
  via HR/CMS
• Code is BH7 (amounts)
• note College Presidents have more codes
  available to them

26
DCAP/HCSA/COMECC Automated End-Deduction

• HCSA, DCAP, HCSAF and the COMECC will be end
  dated on 12/26/2007.
• HR/CMS will systematically insert a new row with
  an effective date and deduction end date of
  12/22/2007.
• Payroll Offices will not have to manually end
  these deductions.
• Payroll Offices can now begin entering
  HCSA/DCAP/HCSAF and COMECC deduction data for
  2008 by using an Effective Date of 12/23/2007.
• Reports on Doc Direct
• HCSA DCAP - HMTAX006
• COMECC HMTAX005

27
MBTA Refunds Update

• Refunds Total 218 (24K)
• We just received Aug-Oct payments
• Nov-Dec may not occur in time for 07 W-2
• Will not process W-2Cs, more to come
• Replaced Total 533
• Review your Internal policies
• Be aware of repeat offenders and why
• What more can you do?

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• Dont use staples!

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Christmas Payroll
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Christmas Payroll

• Payroll will be processed on Tuesday 12/25/07
• HRCMS will keep its normal online hours as
  follows
• Saturday 12/22/07 - 600 am - 600 pm
• Sunday 12/23/07 - Not available
• Monday 12/24/07 - 600 am - 600 pm
• Tuesday 12/25/07 - Not available

31
2008 Payroll Processing

• Kevin McHugh

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2008 Payroll Processing

• Notable Tax Changes For 2008
• Federal Exemption Factor Raised by 100 (3,500)
• EIC Income Eligibility May Be Raised
• Qualified Parking exclusion raised 5 to
  220/month
• Qualified Transit exclusion raised 5 to
  115/month
• Deferred Comp Limits all unchanged
• Normal (15,500)
• Over 50 Catch-up Provision (5,000)
• Last 3 Year Catch-up (15,500) Max 31,000
• HCSA Fee unchanged 1.73 biweekly
• HCSA/DCAP limits unchanged

Pending Final Release by IRS
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2008 Payroll Processing

• Need W-5 for Advance Earned Income Credit
  Payments for CY08 any existing AEIC expires and
  department must inform employees
• CTR Payroll will end all current AEIC employees
  with an Effective Date of 12/22/07. Departments
  can enter a new row with an End Date 12/23/07

34
2008 Payroll Processing

• Need new W-4 for any employee wishing to claim
  EXEMPT for Federal tax withholding
• Notify Employees by Dec 30
• Deadline for new W-4 is Feb 15 otherwise S-0
• Report HTAX103 identifies people who need review
• See IRS website for W-4 form
• Reminder Use HR/CMS Radial Button (not
  Allowances 10)

35
2008 HIRD Information

• Continue collecting HIRD forms
• Report MBEN021R Departmental HIBO Report to be
  available soon
• Tax Reporting
• Form MA 1099-HC will be issued by Provider for
  reporting purposes
• Form MA 1099-HC will be issued to the subscriber
  of the plan and will list spouse and dependent
  information. 
• Recipients of MassHealth and Commonwealth Care (300 of the FPL) will not receive 1099-HC
• See DOR website for FAQs regarding Healthcare
  Reform responsibilities for Employees, Employers
  and Providers

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2008 Payroll Processing

• Reminders
• Manage your Location Codes
• Imputed Parking is no longer entered as separate
  Federal and State amounts
• Only Use PKF - Non Cash Parking
• Parking appear as Noncash on paycheck

37
2008 Payroll Processing

• NEW HIRES - (Effective immediately) The United
  States Customs and Immigration Services has
  issued a new Form I9, Employment Eligibility
  Verification to be used during the New Hire
  process. Employing departments should note the
  changes to List A for acceptable identity and
  work authorization papers. See http//www.uscis.go
  v/portal/site/uscis

38
SSN Verification Results

• Submitted 97.0K in 07 VS 94.1K in 06
• Errors 2.5K in 07 VS 4.6K in 06
• 2007 counts
• SSN not in file (never issued to anyone) 13
• Name and DOB match gender does not match 666
• Name and gender match DOB does not match 1,116
  
• Name matches DOB and gender do not match 45
• Name does not match DOB and gender not checked
  676

39
SSN Verification Cleanup

• Document Direct Report MTAX014R lists the errors
  found between the SSA and the data HR/CMS. See
  new Job Aid
• Use the name issued on Social Security Card or
  other paperwork. (Marriages especially)
• Proof of SSN is done at time of hiring, do not
  set up an employee with a temporary SSN expecting
  you can change this later.

40
Pay Info

• Kevin McHugh

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PayInfo

• New Features
• 30 Payperiods of data available
• New Look and Technology
• W-2 Employee Reference Copy
• Updated Instructions

42
Good for the Employee and Can Save Money

• 5.50 Per employee cost savings by eliminating
  personnel time to sort and deliver paychecks
• 1500 Average savings per location based on
  pick-up and delivery of checks and miles
  driven/year
• 0.35 employee per pay period TRE savings based
  on an average of to print and distribute checks
• Statewide Total Savings 2,418,001.20

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Other Benefit to Paperless Payroll
Going Green

• More than Money Saved

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Eliminating Printed Pay advices would save 240.2
Trees a Year

• SOME TYPICAL CALCULATIONS
• A "pallet" of copier paper (20-lb. sheet weight,
  or 20) contains 40 cartons and weighs 1 ton.
• Therefore,
• 1 carton (10 reams) of 100 virgin copier paper
  uses .6 trees
• 1 tree makes 16.67 reams of copy paper or 8,333.3
  sheets
• 1 ream (500 sheets) uses 6 of a tree (and those
  add up quickly!)
• Calculations from http//www.conservatree.org

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and if the trees from the Boston Common were
used.

• Each ton (2000 pounds) can save 380 gallons of
  oil, three cubic yards of landfill space, 4000
  kilowatts of energy, and 7000 gallons of water.
  This represents a 64 energy savings, a 58 water
  savings, and 60 pounds less of air pollution!
• The 240.2 trees saved (above) can absorb a total
  of 3,532 pounds of carbon dioxide from the air
  each year. Burning that same ton of paper would
  create 21,194 pounds of carbon dioxide.

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Going Green
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Going Green
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Going Green
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Direct Deposit/PayInfo Stats
51
Collective Bargaining Processing

• Send any feedback to Jeanine Hopkins or Alex Dion
  
• Additional automation or report details?

52
Reminder from HRD

• Use the following Codes for SERV

53
CIW Update

• Kevin McHugh

54
CIW Replatforming Project Update
55

• Project Update

• Environment issues detected in system and UAT
  testing installing and testing vendor patches
• No definite rollout date for phase I--MMARS/LCM
  data
• Phase IIHRCMS/UMASS data will follow several
  months after rollout of MMARS/LCM

56
Project Update

• Query performance results continue to be
  extremely encouraging
• UAT testing comments
• I'm sure I was the only one running queries at
  this point but that is spectacular. Great job!
• the drop in port duration was astounding.

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Implementation Assistance

• CIW Website, www.iw.state.ma.us will be main
  information center. You can locate the
  information under the Special CIW Replatforming
  project section.
• ODBC driver application and instructions
• Job Aids for Data Type changes
• Spreadsheet of column and view name changes
• Schedule of Drop In sessions

58
Disaster Recovery Exercise

• ITD- CTR- TRE performed a second Test DRE payroll
  over the weekend of 12/1.
• Able to
• Re-establish local network and desktops
• Re-establish all data HRCMS, LCM, MMARS
• Process a Full Payroll Cycle HRCMS LCM/MMARS
  TRE

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• Happy Holidays!