Understanding Retirement Annuity Offsets
An U.S. Federal Government annuitant employee is a government retiree who is re-hired into a federal position and reported on the U.S. form SF-52. In most cases, the annuitant keeps their full retirement annuity, however their new federal salary is reduced by the amount of the annuity.
When an employee receives a retirement annuity from the federal government, any current federal employer must offset the retirement calculation by the annuity amount. This difference must be reported on the RITS (Retirement and Insurance Transfer System) interface.
To ensure that the RITS interface picks up and reports the total annuity amounts, you must properly set up the earnings codes, employee pay data, and pay group table.
The hourly rate of the position is the pre-offset rate. Payroll calculation uses the pre-offset rate to pay premiums and to calculate benefits base rate for premiums/contributions.
Note:
The system uses regular earnings at the pre-offset rate only for base benefits calculation. Regular earnings are not paid out at the pre-offset rate.
During payroll calculation, the system calculates and pays regular earnings at the offset rate, and uses the offset rate to pay all forms of regular pay.
You must enter the employee’s standard hours and offset rate in Additional Pay. During time entry, you must enter the premium earning codes on Addl Line Nbr 0 (additional line number 0; the line number does not appear) and regular earnings codes on Addl Line Nbr 1 (additional line number 1). When Pay Calculation creates paysheets, the pre-offset rate appears on Addl Line Nbr 0, and the offset rate appears on Addl Line Nbr 1.
The RITS (Retirement and Insurance Transfer System) is used to report retirement, military deposit, life insurance and health benefits premiums and contributions to the Office of Personnel Management (OPM) on a pay period basis. The RITS includes the annuitant offset amount in its reporting to OPM (Office of Personnel Management). The Payroll for North America RITS 2812/2812A Interface Summary Report (FGPY001.SQR) includes the annuitant offset amount in the Total Annuity Amount field by retirement plan.
Use the Employed Retired Annuitant component to view the total number of annuitants, new hires, separations and annuity offset for a pay period.