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PSPRS members: How to calculate what you paid in excess contributions to PSPRS

If you were wondering how much your refund from PSPRS was going to be, reader Rick Radinksy has discovered a relatively simple method of cal...

Monday, November 14, 2016

PSPRS members: How to calculate what you paid in excess contributions to PSPRS

If you were wondering how much your refund from PSPRS was going to be, reader Rick Radinksy has discovered a relatively simple method of calculating one's excess PSPRS contributions, and he was kind enough to share it with all of us.  The method requires three things:
  • Access to your PSPRS account
  • Excel spreadsheet software
  • A basic familiarity with how to use Excel
Mr. Radinsky gave a quick explanation of how to find one's excess contributions in the comments of the previous post, but I have taken the liberty of writing some more detailed instructions on how to do it:
  1. Access your PSPRS account, hit the Access tab, then hit the Contribution History on the left side.
  2. At the top of that window, you'll see a drop down menu where you can choose to "select a format."  Choose Excel, then click on the blue "Export" to the right of the drop down menu.
  3. Your computer should give you the option to open the exported file in Excel.  Choose that option, and the file should open in Excel.
  4. Enable editing with the button at the top.  This spreadsheet will show all your contributions to PSPRS since you joined the system.  What you are concerned with are the columns that show amount and (fiscal) year.  This will tell you how much you have contributed in each fiscal year.
  5. Now you need to separate the following fiscal years (FY's) out: 2012, 2013, 2014, 2015, and 2016 and later.  You can do this by separating each FY out to get a total of all that fiscal year's contributions.  For example, FY 2012 ran from 7/2/2011 to 6/30/2012 on my contribution history.  I found it easiest to cut all the data from each FY's pay periods and paste them in a separate sheet.
  6. Once you have a FY's contributions separated out, all you have to do is use the autosum function to total all the contributions for that FY.  Do the same thing for FY's 2013, 2014, and 2015 to get each of those FY's total contributions .  Anything in FY 2016 and 2017 can be lumped together as they have the same contribution rate.
  7. In order to determine the excess contributions for each fiscal year, you will need to know how much of the total contributions for each year was excess.  You can use the following percentages to determine the excess portion:
    • FY 2012: 11.56% excess (1% / 8.65%)
    • FY 2013: 19.90% excess (1.9%/9.55%)
    • FY 2014: 26.09% excess (2.7%/10.35%)
    • FY 2015: 30.77% excess (3.4%/11.05%)
    • FY 2016 and later: 34.33% excess (4%/11.65%)
       8. Multiply these percentages by each FY's total contributions.
       9. The sum of all these amounts is your total excess contributions. 

The excess contributions should be your refunded "principal."  If you have no access to Excel, you can do these by hand, though it will be a bit cumbersome.  Mr. Radinsky notes that you can multiply your total refund by 75% to see what you will be paid, less withholding, assuming a 25% withholding rate.  These totals do not include any pre-judgment interest owed to members.

Thanks again to Mr. Radinsky for sharing this with us.  I am sure many people will find this very helpful.

***Here is some more helpful information from Mr. Radinsky from the comments:

The only thing I would add is that Excel itself isn't necessary. Microsoft has an accessible online version. Also Google Sheets would work, as well as the Apple spreadsheet equivalent.

50 comments:

  1. The only thing I would add is that Excel itself isn't necessary. Microsoft has an accessible online version. Also Google Sheets would work, as well as the Apple spreadsheet equivalent.

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  2. I added your comment to the end of the post so others are more likely to see it. Thanks again.

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    Replies
    1. Your method in step 7 makes a lot more sense than my longer method to get there. #respect

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    2. So do we multiply our FY contributions by the excess contribution percentage listed in Step 7 for each respective year? What do you mean with the percentage amounts listed in parenthesis after each excess contribution percentage?

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    3. The first percentage is the actual overage you paid in that fiscal year. The percentages in the parentheses shows how that first percentage was derived. For example, in FY 2012, the contribution rate increased 1% from 7.65 to 8.65%, so dividing 1% by 8.65% gets the 11.56% figure. I just wanted to include that so everyone could see how I derived the overage percentages.

      If you paid $5,000 in contributions in FY 2012, you should be refunded $578, which is 11.56% of $5,000. Of course, each year the excess contribution amount increased, making it a higher percentage of the contributions paid, finally reaching 34.33% excess that started in FY 2016 and continues today.

      Unfortunately, since we are working back from the actual contribution amounts paid to PSPRS, this is how we have to do the calculations.

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    4. If you were charged 1% extra on your contributions on say 50K and your contributions were 4250 (8.5%) and it should have been 3750 (7.5%), wouldn't your overpay be 500? (4250-3750=500). Because they took 1% to much from the 50k?

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  3. No way to check past contributions if you're retired. No "Access tab" and the "Contribution History" isn't available.

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  4. My brain hurts while trying to wrap my mind around this.

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  5. Does the Hall decision affect CORP as well?

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  6. CORP members did not have their contribution rates changed by SB1609 and therefore are not impacted by the Hall lawsuit.

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  7. I think I just read that there will be no refunds this year as there are more things to work out in the courts. Perhaps another lengthy legal battle?

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    Replies
    1. I believe the justices sent it back to the lower court to hash out final settlement details, like interest and attorneys' fees, that are merely administrative in nature. There are no more constitutional issues to litigate.

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  8. Do you think that could take months?

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    Replies
    1. PSPRS is saying not to expect any payments before the end of the calendar year.

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  9. What if I changed agencies (Both agencies under PSPRS) in the middle of the time frame? I worked for one agency from 2008 to 2014. When I came to my new agency my previous contributions were sent in a lump sum late in 2015 (so under the FY 2016). Do I get the 34.33% for the lump sum plus the rest of my contributions for FY 2016?

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    Replies
    1. You should be due the same refund no matter where you worked as long you were in the PSPRS system with both agencies. The contributions transferred between employers would have the same stepped overages, based on the fiscal year in which they were paid, which started at 11.56% up to 34.33%. You would not get 34.33% on the lump sum, just the actual excess amounts you paid in those fiscal years. 34.33% is only for fiscal year 2016 and later.

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  10. Will the payment be forwarded from PSPRS or will our individual agency be responsible for issuing the refund?

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    Replies
    1. PSPRS is the agency that actually has the money, and it has not said how it will be repaid. Since the refund will be wages, it is subject to state and federal income tax and Medicare tax and FICA tax, if you pay into Social Security. I thought they might send it back through our employers, to those still employed in a public safety agency. This would allow the required taxes to be withheld, and the wages would appear on the W-2 for the tax year. I don't know how they will do payments for someone who is retired as they will still owe the same taxes as an active worker. Interest will be a whole other issue. We will have to wait and see what PSPRS can figure out.

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    2. I still don't know how I can have my 2011 wages be on my 2017 W-2? Am I over thinking this or is this a real question?

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  11. So here's a question...I earned the money I am to be refunded in each year respectively. Will I have to (Can I) do a modified tax return for each year so the 2017 tax return won't see a huge increase in "pay?"

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  12. Can I opt to let the funds remain with in the PSPRS system?

    Possibly adjust years of service?

    This would be a win win, for both the PSPRS and the member. Especially for the Tier 1 members.

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    Replies
    1. Perhaps in some situations but not all nor even the majority. They need to give the options of:

      1) Roll into an IRA
      2) Purchase/adjust years of service
      3) Cash payment

      This would allow each member to do what is best for them. To say that all members will refunded the in same way will benefit some more than others. For PSPRS to suggest that all members will have their years of service adjusted will greatly benefit PSPRS as they will give unfavorable credit as they do with purchase of time.

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  13. What will happen if the employer paid a portion of the employee's PSPRS contribution? For example: If the employer paid 3.65% and the employee paid 8%, who would get the refund, if anyone?

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  14. How will the refund be paid if the employer is paying a portion of the employee's contribution? For example; the employee pays 8% and the employer pay 3.65%.

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  15. Anyone heard any news about refunds?
    Thanks

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  16. Anyone heard anything about the refunds? Thanks

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  17. Talk of this seems to have died down. Should we not expect any updates till next year. I read that it has to go back to the lower courts to work out some details. Where can we see the status of this or when it is on the court calendar? Can I assume that the longer they wait, the more the interest grows and the larger the payments will be?

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  18. Are DPS sworn affected by this? I heard a rumor that the stipend they get eliminates them from their refund. Is there any truth to that? Current DPS sworn only pay 6.6%, up from 2.6 in 2011.

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  19. Any updates on the refunds?
    thanks

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  20. Hi, any word on the refunds?

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  21. Talk of this has seemed to die down quite a bit. Many of us are being told that this now may happen in January or as late as July after it gets worked out in a lower court. Where could we get info as to when this matter goes on the court calendar? Do you think PSPRS will stall as long as they can?

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  22. Hall refund update: Please expect delays


    PSPRS is aware that since the Arizona Supreme Court ruling in the Hall v. Elected Officials' Retirement Plan (Hall v. EORP) case, members have many questions, and everyone is anxious to begin taking action in compliance with the court's ruling.

    PSPRS wishes to remind members who may be impacted that the legal process associated with the Hall lawsuit is far from complete. Members should consider avoiding personal financial decisions based on expectations associated with the Hall lawsuit and related litigation.

    A few things to consider:
    The Hall lawsuit impacts a select group of judges who are covered by the EORP retirement plan
    There is a similar lawsuit for members of PSPRS (Parker v. PSPRS) that must be reconciled with the Hall decision
    Court-ordered remedies for the Parker lawsuit could differ from those ordered in the Hall lawsuit
    Hall lawsuit litigants, including EORP, the State of Arizona and the plaintiffs, have a short timeframe to ask the court to reconsider or provide further guidance on issues of the court's opinion that are unclear or were not addressed
    Following the court's decision on reconsiderations, the lawsuit will be returned to the trial court, which will address unresolved issues including method of refunds, legal fees and applicable interest
    The legal process associated with the Hall - and related Parker litigation - may not conclude quickly
    Corrections officers covered by the CORP retirement plan are not impacted because their contribution rates were never changed in SB1609, which was challenged in Hall

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  23. Received this e-mail today; really doesn't look like we'll be getting much anytime soon:

    "PSPRS is aware that since the Arizona Supreme Court ruling in the Hall v. Elected Officials' Retirement Plan (Hall v. EORP) case, members have many questions, and everyone is anxious to begin taking action in compliance with the court's ruling.

    PSPRS wishes to remind members who may be impacted that the legal process associated with the Hall lawsuit is far from complete. Members should consider avoiding personal financial decisions based on expectations associated with the Hall lawsuit and related litigation.

    A few things to consider:

    •The Hall lawsuit impacts a select group of judges who are covered by the EORP retirement plan

    •There is a similar lawsuit for members of PSPRS (Parker v. PSPRS) that must be reconciled with the Hall decision

    •Court-ordered remedies for the Parker lawsuit could differ from those ordered in the Hall lawsuit

    •Hall lawsuit litigants, including EORP, the State of Arizona and the plaintiffs, have a short timeframe to ask the court to reconsider or provide further guidance on issues of the court's opinion that are unclear or were not addressed

    •Following the court's decision on reconsiderations, the lawsuit will be returned to the trial court, which will address unresolved issues including method of refunds, legal fees and applicable interest

    •The legal process associated with the Hall - and related Parker litigation - may not conclude quickly

    •Corrections officers covered by the CORP retirement plan are not impacted because their contribution rates were never changed in SB1609, which was challenged in Hall"

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  24. Did anyone catch what psprs put out today? Seems like they will be dragging their feet on refunds and searching for any way to avoid paying.

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    Replies
    1. I got that email on the 12th. With them accruing $825,000 interest per month (at least) I really dont think they will be delaying this too long. They say that there are several outstanding court issues. That may be true, but they have only 2 things to do. Consolidate the cases and determine how interest is to be paid. They can do that in as little as one hearing. Its not like they have not done that before, it already happened with the previous case that was for the retires PBIs.

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  25. December 13, 2016
    Contact: Christian Palmer
    Phone: 602-296-3736

    Employer contribution rates are now available and lawsuit updates

    Individual employer contribution rates for PSPRS and CORP are now available online.
    Contribution rate increases were caused primarily by short-term actuarial increases due to Prop 124 (for PSPRS) and the reduction of the assumed earnings rate in 2015 (for both PSPRS and CORP) by the Board of Trustees. The EORP rate currently remains at 23.5 percent.

    Updates on the Arizona Supreme Court’s Hall decision

    PSPRS is aware that since the recent Supreme Court ruling in the Hall v. Elected Officials' Retirement Plan (Hall v. EORP) case, members and employers have many questions, and everyone is anxious to begin taking action in compliance with the court’s ruling. However, the legal process is not complete, and PSPRS is not authorized to take any action at this time to implement the court’s decision. The parties have until December 27, 2016, to submit petitions for reconsideration of some parts of the decision that were not clear in the opinion, or were not addressed at all. The Supreme Court will issue its mandate within 15 days after the final disposition of any motions for reconsideration. The issuance of the mandate will terminate the appeal process, and return jurisdiction to the Superior Court of Arizona, which only then can address the unresolved issues. These unresolved issues involve determining a method for restoration of excess contributions and unpaid PBI, allocation and amount of fees, and the question of prejudgment interest.

    In as much as Hall v. EORP was a class action, it is of note that the form of remedy for the certified class will require extensive consideration by the Maricopa County Superior Court. In addition, there is no court judgment of any kind as to plan members who were not in the certified class in Hall. They include members of PSPRS, members of CORP, and even members of EORP who were not judges or justices of the Superior Court of Arizona, the Arizona Court of Appeals, or the Arizona Supreme Court. Although the legal principles applicable to these members appear identical, the appropriate remedy, necessary steps, and time table are still undetermined. The issues to be resolved should be the same for all three plans. This process will not happen instantly, but steps are being taken to expedite the implementation of the court’s decisions as quickly as possible. As such, employers should take the necessary steps now to plan and prepare for needing to return employee contribution rates back to their lower levels when directed to do so.

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    Replies
    1. Do think this would have any effect on prior service time that I purchased on 09-22-15? I'm thinking I should be owed more time since it should have been calculated at the lower rate.

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  26. Latest on Hall..."An unopposed" motion for "reconsideration" was granted along with an extension until Feb 3. The "reconsideration" means little other than asking the judges to rethink their decision. I think this is a normal procedural move that both sides usually file motions for hence the "unopposed" language. This means the case is still in the higher court. As much as I know about procedure, once the 3rd comes and goes the higher court will make its final mandate sending it back to the lower court for finalization. So the waiting game continues.

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    Replies
    1. Would be nice if they would get this over with. I wonder if they will let us divert part of the refund to a 457 so we dont get killed on taxes.....

      With them having $825,000 interest per month you would think they would get this moving. They still have not returned our contribution rate either.

      But what the heck, its not like it is THEIR money they are playing with.

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  27. We are past February 3rd, have there been any recent updates posted?

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    Replies
    1. The 2/3/17 was just a deadline for the plaintiffs to issue a response to the motion for reconsideration. The justice still have to rule on the motion, and as usual we will have to wait.

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  28. If we are refunded these wages in, say 2017, wouldn't it then be counted towards our high 3? It would seem a lot of people would like that boost in pension that will payout more over the years.

    As much as I like to see a healthy pension system, it would seem to me that principle plus prime should be awarded along with the added interest from the ill gotten gains.

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    Replies
    1. Any refund of excess contributions would not change one's past pensionable income. The amount of pensionable income was already set when the contributions were taken. The refunded wages represents just those excess contributions and will not be an increase in the pensionable income.

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  29. I read the recent post about psprs giving cities the go ahead to release "our" overpayments. It also said the cities will be given credits on future contributions in exchange for our refunds owed from psprs. I'm sure most of you have seen. The real question I had is the cities will have to pay us and have the funds available to pay us. Wouldn't that put the cities in more of a vulernable spot? What happens if the cities may not have funds available to pay out?

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    Replies
    1. There appears to be some leeway on how employers will pay out the refunds. I do not see that there is a requirement that full refunds need to be paid out immediately. They can be made in installments, perhaps as the credit is drawn down, but I would think that this would have to be something agreed to by employers and labor representatives.

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  30. If they do installments, how do they figure out interest? And those who retired would not be covered by labor reps. I don't think they will let me put the 14 thousand they owe me into a 457 so I'm stuck taking a tax hit.

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  31. An online calculator that makes the estimated refund calculation very easy. https://cpdclea.com/refund/

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    Replies
    1. The problem is that how is anyone going to come up with those dollar amounts? It needs to be calculated on fiscal year not calendar year. (July to July). I created the spreadsheet to take this into account, and give an estimate using 5% as the interest.

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    2. The problem with that calculator is that it appears to be designed for calendar year. The retirement system runs in FY (july to july) so you would need to know that amount to make it come out right.

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