Only compensation that is salary for PERA purposes may be used to calculate contributions and determine membership eligibility.
PERA-eligible salary is defined in state law and is the same for the Defined Benefit Plans (DBP) and Defined Contribution Plan (DCP). PERA-eligible earnings are not identical to reportable Social Security earnings or to state or federal taxable income under the Internal Revenue Service.
Member contributions are deducted from gross pre-tax salary before any voluntary tax-deferred deductions for a 457 deferred compensation plan, supplemental retirement plan, or other salary reduction programs.
The most common types of eligible and ineligible pay are shown below. This list is not meant to be all-inclusive.
Gross, before-tax salary, including:
overtime pay
retroactive pay
used PTO
performance-based bonus payment
Do not report:
expense reimbursements
retirement incentives
payment for unused PTO
any bonus payment that is not performance-based
See Chapter 5 of the Employer Manual for more information on what types of pay are considered PERA-eligible. Please contact PERA before remitting contributions if you are not sure how to treat a particular payment to an employee.
