Top 10 Employer Audit Issues

Mar 21, 2017

The NHRS audit team works with participating employers to ensure that required information is provided to the retirement system in a manner consistent with the law. Because of various legislative changes to the pension plan in recent years, particularly changes to the definition of earnable compensation, a number of common issues are appearing in employer audits.

NHRS encourages all employers to review the following list of common audit findings to ensure they are in compliance with the statute. This is particularly important in regard to earnable compensation as the failure to properly report earnable compensation could result in incorrect benefit determinations and may require administrative adjustments if discovered upon audit. 

If you have any questions, call the NHRS Employer Audit Department at 603-410-3681. All of the interpretive memos referenced in this list can be found at: https://www.nhrs.org/employers/statutory-interpretive-guidance

TOP 10 AUDIT FINDINGS

(References RSA 100-A & www.nhrs.org)

  1. Wages/stipends qualifying as additional pay for extracurricular and instructional activities and teacher development pay not part of contracted salary must be reported in the compensation over base salary field.  Refer to Interpretive Memorandum No. 2015-2.
  2. Overtime, whether paid at a straight-time rate, time-and-one-half, double-time, etc. must be reported in the compensation over base salary field and not in the base salary field.  Refer to RSA 100-A:1, XVII and Interpretive Memorandum No. 2015-1.
  3. Holiday pay has been reported to NHRS in the wrong field and, depending on the employer’s policy, may not be reportable at all.  Refer to Interpretive Memorandum No. 2015-3.
  4. Payouts of unused sick and unused vacation time cannot be reported for members who were not vested prior to 1/1/12.  Refer to RSA 100-A:1, XVII (b)(1) and Interpretive Memorandum No. 2015-4.
  5. Additional compensation for non-abuse of sick leave, perfect attendance, or similar bonuses has been reported in the wrong field, and non-qualifying bonuses have been reported.  Refer to Interpretive Memorandum No. 2015-4.
  6. Retiree work hours and compensation have been misreported. Refer to RSA 100-A:16, VI and NHRS FAQ “HB 342 Retiree Reporting.”
  7. Reporting workers’ compensation wages paid to NHRS members is not allowed. Only differential pay may be reported when a member is in receipt of workers’ compensation payments. A member may request creditable service for time while in receipt of workers’ compensation by contacting NHRS.  Refer to RSA 100-A:4, III (b).
  8. Participating employers must report payments to members pursuant to an employer-funded salary continuance plan for short-term and long-term disability on the Salary Continuance Form. Refer to RSA 100-A:4, III-a and Interpretive Memorandum No. 2016-1.
  9. Extra or Special Duty Pay has been misreported.  Refer to Interpretive Memorandum No. 2013-3, RSA 100-A:1, XXXII and RSA 100-A:16, VI.
  10. Stipends paid to members for performing additional duties that are not considered part of the member’s base salary or overtime, and do not otherwise qualify within the definition of earnable compensation, are not reportable.  Refer to RSA 100-A:1, XVII and Interpretive Memorandum No. 2013-1.