PST Program (Part-Time, Seasonal, and Temporary)
The Part-time, Seasonal, and Temporary Employees Retirement Program (PST Program) is a mandatory retirement savings program created by federal law for State employees and California State University employees who aren't covered by a retirement system or Social Security. Savings Plus administers the PST Program in accordance with the Internal Revenue Code Section 457 Deferred Compensation Plan (DCP).
Employees in the PST Program are not covered by Social Security and are excluded from a pension through the California Public Employees' Retirement System (CalPERS) based upon their length of employment or time base.
- There are no employer contributions or matching of funds in the PST Program
- Participation in the PST Program doesn't limit employee contributions to an Individual Retirement Account (IRA)
Typically, PST Program coverage is required for the following employees:
- Part-time employees, who work less than one half-time
- Seasonal employees who are required to be members of CalPERS (except for Department of Forestry and Fire Protection employees)
- Temporary employees
- Permanent-intermittent (PI) employees
- Board and commission members who are employed on a daily basis for less than 125 days (6 months) or employed on an hourly basis for less than 1,000 hours in a fiscal year (July 1 through June 30)
- Half-time California State University (CSU) employees, who have less than one academic year of credited service
Officers and employees are exempt from the PST Program if they're exempt from civil service and opt out of CalPERS membership. These employees are covered by Social Security and are therefore exempt from participating in the PST Program.
The following part-time, seasonal, or temporary employees are NOT eligible to participate in the PST Program:
Full-time students who attend classes in the institutions in which they work
Employees hired temporarily to handle disaster emergencies such as fires, floods, storms, earthquakes, etc.
Election officials and election workers paid less than $100 in a calendar year
Persons hired through programs to relieve unemployment such as summer youth programs
Persons who have retired from CalPERS covered employment
Authorized, non-resident aliens with F or J visas or M teaching visas
Individuals paid for services performed in a hospital, home, or other institution in which they are housed
Persons who have CalPERS coverage through concurrent public agency employment
Employees who are employed in multiple positions with the State and/or CSU system; one position must be covered by Social Security, CalPERS, Judges' Retirement System (JRS), or the Legislators' Retirement System (LRS)
"Casual" employees who are provided health and welfare benefits. Typically these individuals are employed between 60 and 90 days in a calendar year
CSU employees who are required to participate in an alternative qualified retirement plan for the Omnibus Budget Reconciliation Act of 1990
Self-employed individuals who render services to the state and make Social Security payments on wages earned from their state contract. To request this exemption, the employee must submit a Letter of Intent to their HR Office to indicate their intent to pay Social Security taxes on their earnings along with a copy of their Self-Employment Tax Form from the previous year
Student Assistants, hired through the Hornet Foundation and other CSU Foundations
All employees who meet the requirements are enrolled in the PST Program. Per Federal regulations, PST employees are fully vested (100%) upon enrollment and are entitled to receive a benefit immediately. HR pros are responsible for establishing PST coverage for eligible employees. (See PPM Section H 200 or PAM Item Code 505 for instructions about document processing).
Automatic Payroll Deductions
The PST Program withholds 7.5% of an employee's gross wages (pre-tax) up to the maximum Social Security earnings limitation for each tax year. PST Program contributions are in addition to Medicare taxes.
Savings Plus invests the PST Program deduction in the Savings Plus Short Term Investment Fund - PST, under the employee's name. This fund is a conservative fund that seeks to provide principal preservation, a competitive interest rate and daily participant liquidity through high-quality fixed income investments. For more information refer to the PST Fund Profile located at SavingsPlusNow.com.
Savings Plus may asses a monthly fee of up to 50 basis points (½ of 1%) per year to cover administrative expenses.
Employers are charged an administrative fee to cover costs associated with administering ARP. The fee amount is determined by applying a per deduction fee of $4.80 and multiplying the fee by the number of deductions, including corrections, regardless of whether the transaction involves a positive or negative amount. The fee is assessed quarterly by the SCO
Savings Plus issues semi-annual statements reflecting employee contributions, earnings, and their current balance. PST Statements are mailed to the employee's address on record.
It's important employees keep their address updated with Savings Plus to insure receipt of their PST Statement. Savings Plus continues to send statements as long as the employee has a balance in the PST Program account.
Savings Plus issues PST Statements each February and August, for the periods of December 31 through June 30 and June 30 through December 31.
Address and Name Changes
Employees who currently contribute to the PST Program must submit address and name changes to their HR Office via the Employee Action Request (EAR) form.
Employees who retire, separate or stop contributing to the PST Program may update their address online, by fax, phone, or mail. Employees should provide their full name, Social Security number, daytime phone number (including area code), and your former and new address.
For name changes, the employee must provide a copy of the marriage license, dissolution or court document authorizing the name change.
Contact Savings Plus for more information.
Employees designate beneficiaries for their PST account online at SavingsPlusNow.com
. If the employee doesn't have a beneficiary designation on file at the time of death, Savings Plus will distribute the employee's PST death benefits in the following order:
Surviving spouse or registered domestic partner (whether or not the employee was still living together with the spouse/partner at the time of his/her death); or, if none,
Natural and adopted children, including a natural child adopted by another, share and share alike; or, if none,
Parents, share and share alike; or, if none,
Brothers and sisters, share and share alike; or, if none,
Employee's estate (if probated, or subject to probate); or, if not,
Employee's trust (if one exists) or, if not,
Stepchildren, share and share alike; or, if none,
Grandchildren, including step-grandchildren, share and share alike; or, if none,
Nieces and nephews, share and share alike; or, if none,
Great-grandchildren, share and share alike; or, if none,
Cousins, share and share alike; or, if none,
In accordance with state law for intestate estates
After they retire or separate from all State employment employees may request a distribution online at SavingsPlusNow.com
For more information call a customer service representative at 1-855-616-4SPN (4776), 7:00 a.m. to 7:00 p.m. (Pacific Time), Monday through Friday. Use the queue word "Representative" to speak directly with a customer service representative.
Savings Plus issues PST distributions no sooner than 90 days after the last PST Program contribution posts into or out of the employees account and their eligibility has been verified. All payments are issued via direct deposit to one financial institution. There is no charge for this service.
Savings Plus mails the employee's 1099-R by January 31 of the following year for tax reporting purposes. The 1099-R applies to both Direct Payment and Direct Rollover (non-taxable event) to Another Entity payment options.
Employees may request a Direct Payment to receive their entire account balance. Savings Plus reports Direct Payments to the IRS as ordinary income. A mandatory 20% is withheld from the payment for federal income taxes on amounts of $200 or more. Additionally, California residents are subject to State income tax withholding at the rate that applies to married with three allowances unless the employee requests otherwise by completing a California State Withholding Certificate for Pension or Annuity Payments (DE-4P).
Employees may request a Direct Rollover to Another Entity to roll over funds from their PST Program account to an Individual Retirement Account (IRA), 401(k) Plan, 457 or 403(b) Tax Sheltered Annuity as long as the entity sponsoring the plan accepts 457 funds. To request a Direct Rollover to Another Entity the employee must attach a certification from the receiving entity to the PST Benefit Payment Application.
If the employee is age 70½ or older and elects to rollover funds, Savings Plus will process the Required Minimum Distribution (RMD) and issue payment directly to the employee before transferring funds to the new provider. Refer to the Summary 402(f), which is enclosed in the PST Benefit Payment Booklet for information regarding RMDs.
Employees, who become eligible for CalPERS due to a change in their employment status (length of employment or time base), are no longer eligible for the PST Program. The 7.5% deduction from their paycheck stops and all accumulated contributions and earnings in the account will automatically transfer to a 457 Plan with Savings Plus (Welcome Kit will be sent). Savings Plus transfers the PST account to a Savings Plus 457 Plan. If the employee doesn't have a 457 Plan, Savings Plus will set one up. The PST Program is a type of 457 Plan and therefore are not eligible to transfer to a Savings Plus 401(k) Plan.
Employees, who contribute to a 457 Plan in the same year in which they contributed to the PST Program, must include their PST contributions in determining their total annual contributions to the 457 Plan.
Employees, who become eligible for CalPERS, should review the Information Kit of materials they receive from Savings Plus to select investment options and manage their account. In addition, NRS certified retirement specialists are available for workshops and one-on-one assistance. The professionals at NRS can offer unbiased assistance in retirement planning, developing an asset allocation model, and the benefits of pre-tax investing. Employees may also want to seek the advice of a qualified investment advisor.
Employee PST accounts may be considered "unclaimed" or dormant if no payroll deductions go into the account for three years. Once an account becomes dormant, it's transferred to the State Controller's Office (SCO), Unclaimed Property Unit. To claim escheated funds, employees may call SCO at (800) 992-4647 (residents of CA) and (916) 323-2827 (out-of-state or foreign). SCO requires the individual's name and SSN to confirm their funds were escheated. Upon confirmation, the employee may request a claim form. Employees may "Search for Unclaimed Property" online at sco.ca.gov
The employee is not required to provide a receipt of a cash balance notification from U.S. Claims Service or any other private company in order to claim the money. Employees don't have to pay for a service they can perform themselves.
The PST Program is governed by the Internal Revenue Service (IRS), Internal Revenue Code Section 457. The Federal Omnibus Budget Reconciliation Act of 1990 amended the Internal Revenue Code (26 U.S.C. 3121 (b)(7)(F) to mandate that wages of a State or local government employee (for service after July 1,1991) shall be subject to Social Security taxes unless the employee is a member of a retirement system maintained by the employer. The PST Program satisfies this mandate. This requirement generally applies to part-time employees who work less than half-time and to employees who are not considered permanent (e.g. seasonal, intermittent, or limited-term), who are excluded from membership with the California Public Employees' Retirement System (CalPERS) and are not covered by Social Security.
PST Program coverage began with the August 1991 pay period, as the regulations didn't require coverage retroactive to July 1, 1991.
Assembly Bill 701, Chapter 83, Statutes of 1991, effective June 30, 1991
CalHR Law 19999.2