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0 The PERA"phrase" Social Security for DCP-Covered Elected Officials (continued) • • If your subdivision wants to offer Social Security to elect- ed officials in positions covered by the DCP, the first step is to have your governing body adopt a resolution indicat- ing its desire to provide such coverage and the effective date for participation. The Social Security participation may be established retroactively, but may not, under Section 218(e)(1) of federal law, be earlier than the fifth year preceding the year in which your subdivision's 218 modification is mailed to the SSA. If and when your governing body extends Social Security to elected officials, the second step in the process is for you to schedule a referendum to give each eligible person the opportunity to individually accept or reject Social Security under the 218 modification that will cover the DCP positions of your subdivision. Eligible elected officials will indicate their Social Security choice by writ- ten ballot after they have been given at least 90 day's notice of the referendum. Under state law, you will be responsible for conducting the referendum and pay- ing any associated costs. As the State Social Security Administrator, PERA will supervise the referendum and establish the necessary forms and notices. The table on page 6 describes the elected officials who can participate in the referendum. Indefinite Layoffs (continued) When you place an employee on layoff, first determine whether the person's employment will be suspended for an unknown period, or whether the layoff is seasonal or temporary with the expectation that the employee will return to the same position no later than a specific date. When the period of layoff is not for a limited period during a year and, instead is for an unlimited period, employers must report the new 'I' status code to indicate why wages have stopped for the applicable member. However, when the employee being placed on layoff will have an expect- ed return date, the temporary layoff code of 'L' should be used. (Note: school districts do not need to report a seasonal layoff that occurs over the summer months. We automatically award up to three months of service credit to school workers who do not have any salary reported during the summer period.) Finally, if you work with computer software providers, or have developed your own system for electronic demo- graphic reporting, please make sure that those respon- sible for programming are aware of this new employment status code and its July 1, 2006 effective date. 4 Once Minnesota's 218 Agreement is Modified After the SSA approves a modification to Minnesota's 218 Agreement for your subdivision, you must withhold Social Security (6.2%) and Medicare taxes (1.45%) from the sal- ary of each elected official who voted in favor of Social Security coverage. Your subdivision must match the con- tributions and report wages and payment to the Internal Revenue Service (IRS) using Form 941. You must also withhold Social Security and Medicare taxes from the sal- ary of all newly elected officials of your subdivision. If your 218 modification called for retroactive Social Security participation, you must submit to the IRS the applicable past employer and employee amounts using their process for reporting retroactive contributions. For each official who voted in favor of retroactive Social Security, contributions must be paid back to the effective date of the 218 amendment or the date the particular elected official took office, whichever is later. The pay- ment of these employee and employer contributions must be equal to the taxes which would have been imposed by the Federal Insurance Contributions Act had the elective service been covered by Social Security on the dates the service was performed. Additional Resources You may view and download examples of the govern- ing -body resolution and referendum documents from our Web site (www.mnpera.org) within the Employers Section under Social Security. To learn more about the refer- endum process, please review the online Referendum Procedures. If you have questions about the new law or would like to initiate the referendum process within your city, county, school district, township, or special authority, please call our Employer Line at 651-296-3636 or 1-888- 892-7372 and select menu option 3. Deductions in Error (continued) must take steps to retain that status in order to ensure that members' contributions may continue to be made on a pre-tax basis. When member deductions have been made in error, we will work with you to correct the situation as efficiently as possible. The new PERA refund process does not affect your ability to use our adjustment process as an alternative to receiving a check from our office. For more details about the adjustment process, please refer to the Employer Manual or call the Employer Line, option 7.