8.01.04: Purchases Made by Reporting Units on Behalf of Employees

ORS accepts payments from reporting units on behalf of its employees for purchase of active duty military service credit and/or payment for a repayment of a refund, contributions for pre 1992 weekly workers compensation, and MIP Window buy-back. Reporting unit purchases made on behalf of employees should not be confused with tax-deferred payments withheld from employee wages.

These reporting unit pre-tax purchases are covered by the following rules:

  • A service credit purchase made by the employer through a tax-deferred payment agreement on behalf of the employee is a fringe benefit and is not to be reported as compensation. Do not remit employer retirement contributions for these payments.
  • These payments are considered employee rather than employer contributions toward retirement and should be reported as a TDP deduction (DTL3 record) on your retirement detail report.
  • These payments should be made on the Employer Reporting website under the Payments section by choosing the DB Contributions and TDP Cash Receipt Type.

Note: Do not try to speed things up by submitting TDP payments outside of the normal process. It does not speed up the posting process but actually slows it down.

These types of payments must be reported to the IRS as both income and deferred wages on your employee’s W-2 form.

See section 10.11.00: When an Employer Purchases Service Credit for an Employee.

Last updated: 09/29/2017