The Utah Tier 2 Public Employees' Contribution Retirement System offers two retirement plan options: the Hybrid Retirement System and the Defined Contribution Plan. The "Tier 2 Fund DB Hybrid EE Contribution 0.7% After Tax" refers to the employee's contribution towards the Hybrid Retirement System. 

• Tier 2 Fund refers to the retirement plan for employees hired on or after July 1, 2011. 

• DB Hybrid stands for Defined Benefit Hybrid, meaning it combines elements of a traditional pension (defined benefit) with a 401(k)-style plan (defined contribution). 

• EE Contribution refers to the Employee Contribution. 

• 0.7% After Tax shows that the employees contribute 0.7% of their salary to the retirement plan, and this contribution is made after taxes have been deducted. 

Employees in the Utah Tier 2 Hybrid Retirement System contribute 0.7% of their after-tax salary to their retirement fund. This contribution helps fund their future retirement benefits, which include both a pension and a 401(k)-style plan. 

Resources: 

• URS Employer Guide: Member Contribution FAQ [Link]

• As a printer-friendly document [PDF]

• If you need assistance, call customer support at (800) 228-9851. 

Setting up a new retirement pay code

Follow these steps to set up a new retirement pay code for the Tier 2 Fund DB Hybrid EE Contribution. 

Step 1. Set up a new retirement tax pay code 

1. Open Connect Payroll > Organization > Pay Codes. 

2. Click New  (CTRL+N). 

3. Set up the Pay Code tab, like this...

Pay code

Enter a new pay code number. Example: 50

Sub code

Enter a new sub code number. Example: 12

Title

Enter Retirement Tier 2 Fund 111 DBH. 

Abbreviated title

Enter RET T2-111. 

Type

Select Retirement as the pay code type. 

State

Select UT. 

Identification number

Enter the Utah State Retirement identification number for your organization. If you're not sure, contact Utah Retirement Systems. [urs.org]

4. Click Save  (CTRL+S).

5. Click Edit  (CTRL+E).

You may need to choose the option to undo all changes and continue before you can switch to Edit mode. 

6. If the Retirement Tier 2 Fund 111 DBH pay code is not displayed, use the Look up bar to look up the pay code that you just created for Retirement Tier 2 Fund 111 DBH. 

7. Now, finish setting up the rest of the pay code. 

Calculation order

Click the Modify Calculation Order link to enter the calculation order number. You won't see this number unless you're working in Edit mode. 

How do I set the calculation number? The calculation order will vary by organization. You should place the pay code in the calculation order with the other retirement type pay codes that have been set up in pay code. To find out the calculation order for retirement type pay codes, see Connect Payroll > Organization > Organization.  

Add on new employee

Do not select this checkbox. 

Allow employee options

Select this checkbox. 

Allow employer options

Do not select this checkbox. 

Allow payout payments

Do not select this checkbox. 

User as summarization pay code

Do not select this checkbox. 

4. Set up the Employee tab > Employee tab, like this...

Amount/Rate/Percent type

Select Percent of Amount. 

Percentage

Enter 0.7000-. Do not key the minus (-) sign. When you press Enter, the minus (-) sign is added to the percentage. 

Maximum limit, Annual limit, Minimum wage limit, Maximum wage limit, Standard pay hours

Enter 0.00

GL account

Enter the GL account for retirement payable. Example: 02-22500

GL activity

Enter 0

Calculation name

Skip this field. 

Employee allocation method

Select the allocation method for the selected GL account. For example, if the GL account is a complete account, then use Do Not Allocate as the allocation method. But if the GL account is a partial account, choose the allocation method to complete the partial GL account.  

Position

Skip this field. 

Position number

Skip this field. 

Round amounts to nearest dollar, Exclude hours, Exclude hours for overtime calculation

Do not select this checkbox. 

Monthly period numbers

Select the monthly period numbers and months to calculate the pay code. 

How do I select the monthly period numbers? The setting will vary based on how often the organization will be calculating this pay code. Monthly period numbers aren't affected by partial versus full GL accounts. The monthly period number is determined by how frequently you want this pay code to calculate. Usually, this pay code is set up for all pay periods. Biweekly = 1-3. Semi-monthly = 1-2. And so on. You will need to select the periods that you want this pay code to calculate. 

Allow calculations with these check types

Manual: Select this checkbox. 

Payout, Supplemental, Termination, Third party: Do not select this checkbox. 

5. Skip the Employee tab > Used in Calculations tab. 

This pay code is an after-tax pay code and therefore, no taxes are listed in the Used in Calculations tab. That's why this tab is blank. 

6. Set up the Employee tab > Used for Calculation tab, like this...

Select the pay codes that you want to include in the calculation. For example: 

• Regular pay (1-00)

• Overtime pay (2-00)

• Vacation pay (3-00)

• Sick leave (4-01)

• Sick leave PT (4-02)

• Holiday pay (7-01)

• Holiday worked pay (7-02)

• Miscellaneous pay (8-01)

• Bonus (8-02)

• Stipend (8-03)

• Bereavement pay (8-04)

• On call pay (8-05)

• Comp time used (9-02)

7. Click Save  (CTRL+S). 

Step 2. Add the new pay code to the following reports

Update the following reports with the new pay code. Adding the new pay code will include the amounts for the new retirement pay code to the report. 

• Pay code transmittal report for retirement reconciliation 

• Transmittal for retirement (if applicable)

• Paystub (if pay codes are hard coded and the pay codes do not use shifting variables)

• State retirement report

Step 3. Add the new pay code to applicable employees

After the final payroll in June or the first payroll in July, add the Tier 2 Fund DB Hybrid EE Contribution pay code to applicable employees. (Employees > Modify Existing Employees or Add Pay Codes to Employees)

Editing an existing retirement pay code

Follow these steps if you have already set up a pay code for Tier 2 Fund 111 DBH. You can update the existing pay code with the new Tier 2 Fund DB information. 

Step 1. Edit the existing pay code

1. Open Connect Payroll > Organization > Pay Codes. 

2. Look up the pay code for Tier 2 Fund 111 DBH. 

Tip! Look for a pay code beginning with pay code 50-00 to 59-##. 

3. Click to select the Allow Employee Options checkbox.  

4. Set up the Employee tab, like this...

Amount/Rate/Percent type

Select Percent of Amount. 

Percentage

Enter 0.7000-. Do not key the minus (-) sign. When you press Enter, the minus (-) sign is added to the percentage. 

Important! Do not enter 0.7000- until after the final payroll of June. You can update the rest of the fields on the pay code, but the percentage should not be set until after the final payroll in June is finished. 

Maximum limit, Annual limit, Minimum wage limit, Maximum wage limit, Standard pay hours

Enter 0.00

GL account

Enter the GL account for retirement payable. Usually, the GL account is a liability/payable account. Example: 02-22500

GL activity

Enter 0

Calculation name

Skip this field. 

Employee allocation method

Select the allocation method for the selected GL account. For example, if the GL account is a complete account, then use Do Not Allocate as the allocation method. But if the GL account is a partial account, choose the allocation method to complete the partial GL account.  

Position

Skip this field. 

Position number

Skip this field. 

Round amounts to nearest dollar, Exclude hours, Exclude hours for overtime calculation

Do not select this checkbox. 

Monthly period numbers

Select the monthly period numbers and months to calculate the pay code. 

How do I select the monthly period numbers? The setting will vary based on how often the organization will be calculating this pay code. Monthly period numbers aren't affected by partial versus full GL accounts. The monthly period number is determined by how frequently you want this pay code to calculate. Usually, this pay code is set up for all pay periods. Biweekly = 1-3. Semi-monthly = 1-2. And so on. You will need to select the periods that you want this pay code to calculate. 

Allow calculations with these check types

Manual: Select this checkbox. 

Payout, Supplemental, Termination, Third party: Do not select this checkbox. 

5. Update the Employee tab > Used in Calculations tab. 

Important!

• Make this change after the final payroll in June is finished.

• If there are any tax pay codes under the Used In Calculation tab, you need to stop and use the option to create a new pay code. This pay code is not eligible for editing an existing pay code. If the tax pay codes are removed from this list, it could result in tax errors in Checkout and in issues with tax reporting for 941s and W-2s. 

6. Update the Employee tab > Used for Calculation tab. 

The pay codes that are used for calculation needs to match the pay codes that the employer used for calculations. Specifically, the wages subject to this retirement amount. 

Step 2. Add the new pay code to the following reports

Update the following reports with the new pay code. Adding the new pay code will include the amounts for the new retirement pay code to the report. 

• Pay code transmittal report for retirement reconciliation 

• Transmittal for retirement (if applicable)

• Paystub (if pay codes are hard coded and the pay codes do not use shifting variables)

• State retirement report

Step 3. Add the new pay code to applicable employees

Eligible employees should already have this pay code because the employer portion is already calculating. To add the new pay code to an employee, wait until after the final payroll in June to add 

the Tier 2 Fund DB Hybrid EE Contribution pay code to applicable employees. (Employees > Modify Existing Employees or Add Pay Codes to Employees)

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