Employers must deduct and remit employee AND employer pension retirement plan contributions from a covered employee's eligible salary each pay period.
MSRS-eligible salary is defined in Minnesota Statute, section 352.01, subd 13.
Note: In the event of wrongful discharge with back pay award, MSRS must, under Minnesota Statutes, section 356.50, investigate any other earnings (unemployment compensation, other employment) that the member received during the period of discharge and collect MSRS contributions on that earnings amount, in addition to contributions owed on the back pay award.
Types of salary
Military shift differential pay
On June 17, 2008, the Heroes Earnings Assistance and Relief Tax Act went into effect. This Act provides that beginning January 1, 2009, differential military pay made by the employer to an employee who is on a military leave of absence is included in the calculation of wages for retirement. The agency makes up the difference when military pay is less than the employee would have received in state service.
Voluntary unpaid leave/leave salary savings
Employees and/or employers may purchase MSRS service/salary credit for hours of unpaid leave salary savings. The unpaid hours must be reported to MSRS if not included in an electronic payroll reporting system.
Vacation/Compensatory Conversion
Employees are limited to making MSRS contributions on a maximum of 40 hours per fiscal year for payout of compensatory or vacation/sick hours. Any hours beyond the maximum are not considered "salary" and no contributions are owed on those hours.