As we begin a new fiscal year, it's the perfect time to review contribution reporting practices and ensure all Fiscal Year 2026 payrolls and adjustments have been completed accurately.
While most payrolls are submitted correctly, a few common reporting errors continue to create delays, require additional employer follow-up, and can affect a member's retirement record. The good news? Most of these mistakes are easy to prevent, and just as easy to correct when addressed promptly.
Here are the most common issues we see and some helpful tips to resolve them.
Our Contribution Accounting team continues to see employers submitting payroll using last fiscal year's Retirement (RET) and Long-Term Disability (LTD) contribution rates. This is one of the most common, and avoidable, reporting errors at the start of a new fiscal year.
Effective for payrolls with a Pay Period Ending (PPE) on or after July 1, 2026, employers must use the FY2027 contribution rates:
• Retirement (RET): 11.87%
• Long-Term Disability (LTD): 0.11%
Note: Please verify that your payroll system has been updated with the FY2027 rates before submitting payroll.
1. Incorrect Pay Period Ending (PPE) Date
The Pay Period Ending (PPE) date drives several important ASRS business rules, including the fiscal year, applicable contribution rates, and reporting requirements.
Remember, ASRS uses the Pay Period Ending date, not the pay date, to determine the correct Fiscal Year and contribution rates.
Fix
• Verify the PPE date before submitting your payroll.
• If incorrectly reported contact your Contribution Accounting Specialists or add a comment to the Contribution Summary Report prior to submitting payment.
2. Waiting Too Long to Process Adjustments
Corrections become more difficult the longer they are delayed. Waiting several months often requires additional research and can delay member service credit or retirement processing.
Fix
• Reconcile your payroll records each month.
• Process adjustments as soon as an error is identified rather than waiting until year-end.
• Before closing your fiscal year, verify that all payrolls have been submitted and any outstanding corrections have been completed.
3. Adjustments That Don't Match the Original Payroll
When correcting previously reported payroll, adjustments should mirror the original transaction.
Common issues include:
• Using a different Pay Period Ending date
• Reporting a different pay type
• Crediting only compensation or only contributions
Fix
When reversing payroll:
• Use the same PPE date as the original payroll.
• Use the same pay type that was originally reported.
• Reverse both compensation and retirement contributions together.
• All corrections should be made using the adjustment process.
4. Proposition 301 Reporting (School Employers)
Each year we receive questions regarding Proposition 301 reporting. The most common errors are due to incorrect Pay Type used and inaccurate Contribution Rate (Prior vs current)
Fix
• Review the ASRS Pay Types Defined guide before processing Proposition 301 payments.
• Verify you are applying the correct PPE Date and the using corresponding rate.
• When in doubt, contact Contribution Accounting before submitting the payroll. It's much easier to answer a question before payroll is submitted than to correct it afterward.
5. Payroll Was Submitted with Incorrect Compensation or Contributions
Occasionally payroll is submitted with incorrect earnings, omitted earnings, or incorrect retirement contributions.
Fix
• Determine whether the employee was overreported or underreported.
• Submit the appropriate adjustment for the difference rather than re-reporting the employee's entire payroll unless a complete reversal is necessary.
• Reconcile payroll totals against your payroll register before submitting future payrolls to help catch discrepancies early.
6. Missing FY2026 Contributions? Use the CNW Process.
As the fiscal year has ended, missing contributions for different fiscal years, in this case FY2026 generally should not be reported as payroll adjustments. Instead, employers should submit the required Compensation Not Withheld (CNW) request to report and remit the missing contribution.
Quick Tip
• Review your FY2026 payroll records to identify any missing contributions as soon as possible.
• If contributions were not reported during FY2026, do not submit a payroll adjustment.
• If you are unsure whether a correction should be reported as payroll adjustment or a CNW transaction, contact Contribution Accounting before submitting Our team is happy to help ensure the correction is processed correctly the first time.
Submitting the correct transaction helps avoid delays, prevents duplicate reporting, and ensures member records remain accurate.
Best Practice: Review Before You Submit
Many reporting issues can be avoided with a brief review before selecting Submit.
Ask yourself:
• Have all eligible employees been included?
• Are contribution rates correct for the Pay Period Ending date?
• Does reported compensation match payroll records?
• Have adjustments been completed for previously identified errors?
• Have payroll totals been reconciled?
Taking a few extra minutes before submission can save hours of research and corrections later.
Remember Your Statutory Responsibilities
Arizona law requires participating employers to accurately report eligible employees and remit required contributions to ASRS. A.R.S. § 38-735 requires employers to submit contributions and member information in accordance with ASRS requirements. When reporting errors occur, employers should correct them promptly to maintain accurate member records. Adjustment and refund provisions for certain contribution errors are addressed in Avoid Common Contribution Reporting Mistakes: Year-End Reminders for ASRS Employers
Arizona law requires participating employers to accurately report eligible employees and remit required contributions to ASRS. A.R.S. § 38-735 requires employers to submit contributions and member information in accordance with ASRS requirements. When reporting errors occur, employers should correct them promptly to maintain accurate member records. Adjustment and refund provisions for certain contribution errors are addressed in A.R.S. § 38-738.
Helpful Resources
The following resources are available on the ASRS website to assist employers with accurate reporting:
• Web-Based Contribution Reporting Guide
• File Upload Contribution Reporting Guide
• Compensation Quick Reference Guide
Using these resources before submitting payroll can help reduce errors and make payroll processing smoother for both your organization and your employees.
Thank You
Thank you for your continued partnership and commitment to accurate reporting. Your attention to detail helps ensure ASRS members receive timely service credit, accurate retirement records, and the benefits they have earned. Together, we can reduce corrections, improve processing times, and continue providing exceptional service to Arizona's public employees.
If you have any questions please don't hesitate to contact the Employer Relations team through an Employer Secure Message, Live Chat, or by calling the Employer Services line at (602) 542-2777.
