Guidance for Paying PERA Retirees as CORE Vendors

Guidance for Paying PERA Retirees as CORE Vendors

Process Description

State statute (C.R.S. 24-51-401) requires PERA employers, such as the State of Colorado, to report payments made to PERA retirees working as independent contractors. The State of Colorado is required to report payments and pay the PERA Employer Contribution for these independent contractor wages, and the retiree is required to pay the PERA Employee Contribution. Closely related businesses (with an EIN – Employer ID Number assigned by the IRS) are also subject to PERA Contributions, and retirees must disclose if they are doing business under an EIN instead of their SSN. More information can be found at PERA's website, www.copera.org. The Disclosure of Compensation form is on page 21 of the Working After Retirement handbook revised April 2023.

PERA Employer Contribution Billing

Every month, CORE runs an automated job that identifies retirees in CORE (vendor records set up under an SSN identified by PERA as a retiree) and reportable payments made on these vendor records. Once these payments are identified, CORE then generates IET1s which bill departments for the employer contribution. The IET1 draws funds from the same coding as the original payment. If different payment coding is needed for the employer contribution, the department will need to create a JV to correct that coding.

Identifying PERA Retirees

1. Determine whether the contractor is being paid through a SSN or an EIN.
2. If the vendor is being paid through a SSN, no further action is needed. The CAVO has a process to flag SSNs in CORE automatically.
3. If the vendor is being paid through an EIN, request a Disclosure of Compensation form from the vendor, and email it to the CAVO at state_centralapproval@state.co.us so that the EIN can be flagged in CORE. The disclosure can be found on PERA’s website, linked above.
4. If it’s unclear whether a vendor is flagged in CORE as a PERA retiree, email the CAVO and we will check their status. On the VCUST table, the Retired Employee field will generally be Yes for vendor records associated with a PERA retiree, but not always.

PERA Payment Corrections

1. Departments are responsible for ensuring that any corrections to retiree payments are completed within the same month as the original payment.
2. When correcting payments, JVs must hit cash, just like a 1099 reportable correction.
3. If the correction cannot be made during the month of the original payment, please reach out to the CAVO team.
4. Examples that may require an adjustment:
   1. A payment was reported to PERA but the contractor hadn’t retired yet.
   2. A payment made in a prior calendar year needs adjustment.
   3. Payment coding errors; e.g. a reportable object code was used for a non-reportable payment.