IRS to Issue Ruling on SEBAC ARP Grievance Award

Seven years after the Retirement Service Division asked the IRS for a private letter ruling on the SEBAC ARP Grievance Award (SAG Award), the IRS is in the process of agreeing that the implementation of the SAG Award will not adversely affect the tax-qualified status of the affected plans.
What is this about?
Allegations were made by some higher education employees that they were “steered” by their employer into participating in the Alternate Retirement Plan (ARP). SEBAC filed a grievance which progressed to arbitration and on September 22, 2010, an award was issued. The SAG Award provided that “all ARP members shall be given the one time opportunity to make their irrevocable choice  to either remain in ARP or transfer to the State Employee Retirement System (SERS).”
As mentioned, the implementation was delayed because of the IRS involvement.
Who does this apply to?
All ARP member in higher education who were on active payroll on September 22, 2010 including individuals who have since retired. It does not apply to anyone who has already elected to transfer from ARP to the Hybrid Retirement Plan.
I qualify; what are my choices?
ARP member choices under the SAG Award will be:
  • Remain in ARP; or
  • Transfer from ARP to Hybrid per the 2011 SEBAC Agreement as of the implementation date; or
  • Participate in SERS on a prospective basis as of the implementation dates; or
  • Participate in SERS on a prospective basis as of the implementation date and purchase service credit for past service in ARP.
Please note that transfer into SERS may be only for Tier II or Tier IIA.
What dates are important for this process?
  • August 1, 2018 is the deadline to submit a request for a salary anomaly determination.
  • All salary anomaly determinations must be resolved no later than September 1, 2018.
  • The 90 day window to elect your choice will be from September 14, 2018-December 14, 2018.
  • January 18, 2019 will be the date of implementation. 
How do I find out more information? 
The Retirement Division will be holding several informational presentations at campus locations in April and May. Please review the information provided by the OSC here.
The 4Cs will continue to share information about the SAG Award implementation. There is also more information available on the Comptroller’s page here.

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