1. What is employer reporting?
Employer reporting is the submission by employers to the ERS all information deemed necessary to accurately determine plan eligibility and to calculate benefits.  ERS is responsible for the general administration and operation of the retirement system for all State and county employers.  One of the key services ERS provides is the computation of a member’s retirement allowance, which is based in part on a member’s average final compensation.  However, the amount of “compensation” used to calculate a member’s retirement allowance is not necessarily the same amount as the amount of money a member receives from their employer.  This is because for retirement purposes, HRS § 88-21.5 limits the definition of “compensation” to specific categories, depending on the member’s membership date.  If a payment does not fall within the specified categories, then it does not qualify as “compensation” for retirement purposes.  Thus, ERS has long requested that employers only self-report “compensation” for retirement purposes and relies on such employer reporting to calculate retirement allowances. 

Personnel and Payroll Reporting
Follow the personnel and payroll reporting requirements outlined on the appropriate Personnel Reporting and Payroll Reporting page.

Refer to the Employee Benefit Limitations table to see if it applies to your employee.

2. What types of pay can be reported as “compensation” to the ERS for benefit computation purposes?
          A. For an employee who has an ERS membership date before July 1, 2012 (Tier 1), compensation
              for ERS purposes is limited to the following:
                    1. Normal periodic payments of money for service the right to which accrues on a regular
                        basis in proportion to the services performed.  This is to reflect payments of the basic rate
                        of pay or basic compensation as indicated on the employee’s appropriate salary schedule
                        or equivalent;
                    2. Overtime;
                    3. Differentials;
                    4. Supplementary payments;
                    5. Bonuses and lump sum salary supplements; and
                    6. Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the
                        Internal Revenue Code of 1986, as amended.

          Pay for “allowances” and/or “reimbursements” should not be reported to the ERS; provided,
          however, that meal allowances may be reported as overtime in the period they were earned if:
          (a) paid only when the employee works overtime; and (b) represents a component of compensation
          for overtime.

          B. For an employee who has an ERS membership date after June 30, 2012 (Tier 2), compensation
              for ERS purposes is limited to the following:
                    1. Normal periodic payments of money for service the right to which accrues on a regular
                        basis in proportion to the services performed.  This is to reflect payments of the basic rate
                        of pay or basic compensation as indicated on the employee’s appropriate salary schedule
                        or equivalent;
                    2. Shortage differentials, which are: (a) paid in addition to the payments identified in A.1
                        above; (b) paid based on services performed in a position identified by the appropriate
                        jurisdiction as a labor shortage or difficult-to-fill position (as documented in personnel
                        records or equivalent); and (c) accrued on a regular basis in proportion to the services
                        performed;
                    3. Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the
                        Internal Revenue Code of 1986, as amended; and
                    4. Twelve-month differentials for employees of the department of education.

          Pay for any other additional or extra payments, including but not limited to the following, should
          not be reported: overtime, supplementary payments, bonuses, lump sum salary supplements,
          allowances, reimbursements and differentials (other than differentials identified immediately above
          at items B.2 and B.4).