Federal 218 Task Force Releases Report on Retirement
by Roger Kurtz
April 13, 2009
Missouri U.S. Senator Claire McCaskill today (April 13, 2009) released a report prepared by the Federal Section 218 Task Force for Missouri School Districts. The report addresses the findings of the Task Force which was organized to determine the proper application of the Missouri Section 218 agreement and subsequent coverage modifications. The Task Force also was charged with developing a process to evaluate which positions in the Missouri public schools are subject to Social Security coverage. The Task Force was formed at the request of the Missouri U.S. Congressional Delegation last fall and included representatives from Social Security, IRS, Office of Administration and PRSR/PEERS.
A complete copy of the report can be downloaded from at this link: Task Force Report
More information on the entire issue can be found on the State Social Security Administrator website at http://oa.mo.gov/acct/schooldistricts.htm.
First and foremost, the recommendations of the Task Force will not take effect until July 1, 2010. Probably the most important recommendation from the Task Force is that a full-time “teacher” who has both a license to teach and is in a position that Missouri law requires to have a license to teach is excluded from Social Security coverage.
The Social Security Administration will rely heavily on DESE Core Data codes in determining if certification is required. These codes are used by school districts to submit information for all employees based upon the duties of the employee (Screens 18, 20 and 24). Core data codes from 10 through 60 require a license to teach. For specific assignments identified under position code 70 (Other Pupil Services Personnel), if the assignment requires a license to teach and the teacher is working full-time in that assignment, the teacher would not pay Social Security taxes. Those individuals under position codes 80 (Aides) and 90 (Ancillary Personnel) are not required to have a license to teach and employees will pay Social Security taxes.
The Task Force further reported that if a school district employee occupies a position that is excluded from Social Security coverage, then any compensation received by the employee for extra duties while in that position, will be excluded from Social Security coverage. If the employee occupies any additional positions with the same employer, compensation received for the additional positions will be excluded from Social Security coverage. Conversely, if the employee occupies a position covered by Social Security, then any compensation received by the employee for extra duties performed while in that position, or for any additional positions occupied by the employee with the same employer, that compensation will be covered by Social Security.
Part-time employees are extremely more difficult for a determination to be made. School districts have been divided into four categories, depending on the date on which the school districts executed its Section 218 coverage modification. The status of a part-time teacher may depend upon the category in which the district falls. In the largest group, which is Category 1, each school district will be required to hold a referendum if Social Security coverage is to continue for part-time teachers who are in PEERS and paying Social Security. (Click here for list of school districts by Category.) More details on this referendum requirement will be forthcoming. Please refer to the report for additional information on part-time employees.
The Task Force concluded that retired teachers working under the 550 hour rule will be required to pay social security taxes beginning on July 1, 2010 and school districts will be required to match these contributions.
The summary of the report states, “Generally, the greatest impact will be on part-time employees because in almost all circumstances, full-time “teachers” are excluded from Social Security coverage.”
In the coming months, the Office of Administration will be working with school districts to make determinations on all employees. They hope to have all determinations made prior to January 1, 2010.
Task Force chairman, Michael Grochowski, will review the Task Force report with association representatives later this week. MASA is planning to record this meeting and make it available on our website.
If you have an opportunity, please relay your gratitude and appreciation to your U.S. Congressman and/or to Senators McCaskill and Kit Bond for their assistance with this issue.
