October 26, 2011 Has Your City Made the Proper Retirement Contributions for Elected or Appointed Officials?
Recently several Utah cities have been contacted by the Utah Retirement Systems (URS) regarding the non-payment of retirement contributions for a certain category of part-time city employees. Specifically, the issue concerns those individuals that are classified as “elected or appointed officials.”
For most individuals the obligation of the city to make retirement contributions for part-time employees is determined by the amount of time an individual actually works. However, for “elected or appointed” officials the obligation to make retirement contributions is determined by the amount they are paid. For example, in February 2011, an elected or appointed official that earns “925/month should have contributions made on their behalf – regardless of the amount of time worked. This salary amount has increased over time. For example, in 1995 the eligibility amount was $626/month.
In response to inquiries from individuals who are appropriately classified as “elected or appointed” officials – in particular justice court judges – the URS has indicated that cities who have not made retirement contributions on their employees’ behalf are liable for these contribution payments. The most challenging aspect is that these payment obligations may go back to March of 1994. (Note: Under changes recently made to Utah retirement laws, this issue does not apply to individuals who are appointed on or after July 1, 2011. Retirement eligibility after that date is determined by actual full-time/classifications in terms of time actually worked.)
At the present time, the focus is on justice court judges and whether retirement contributions on their behalf were made to URS. The ULCT is trying to help our cities understand the scope of their potential liabilities. In the near future, we will be requesting information about their justice courts and retirement contributions. Please respond to these information requests when they are made.