Dear School District Superintendents, Charter School and Education Collaborative Directors, Business Managers, Payroll Officers, Personnel Administrators and Town Treasurers,
We are writing to advise employers that our regulatory agency, the Public Employee Retirement Administration Commission (PERAC), has reversed its original guidance regarding not taking deductions on supplemental pay in conjunction with workers’ compensation benefits, and is now requiring employers to take contributions on that supplemental pay. Accordingly, please return to treating these payments the same way that you were before our e-mail to you of February 23, 2018.
PERAC’s new guidance, provided under Memo 17, dated April 9, 2018, states that the Vernava decision is limited only to members who receive job-related (“accidental”) disability retirement benefits under c.32 § 7, and does not impact members while they are employed. Therefore, supplemental payments from sick leave or vacation time paid to a member who is receiving workers’ compensation benefits should be considered “regular compensation” and retirement deductions should be taken. Upon retirement from the MTRS with a job-related disability benefit, the member will receive a refund of the deductions taken from the supplemental pay.
Effective immediately, please resume taking retirement deductions on any supplemental payments from sick leave or vacation time paid to a member who is receiving workers’ compensation benefits. This change will require that you update the affected members’ Events in MyTRS. Thus, please call your Employer Services representative for guidance on this procedure, and instructions on how to capture the deductions not taken based on the earlier guidance stated in our e-mail of February 23.
We apologize for any confusion created by this change, and thank you for your attention to this important matter.