The Twelve Month Deferred Payroll Distribution Plan provides a method for academic employees on 9-month appointments to spread their gross salary over the 12-month period of a plan year (October 1st through September 30th of the following year). To achieve this plan year distribution, 25% of the monthly salary will be put into a deferred accrual starting with the October 31st payroll through the June 30th payroll. The deferred amounts are placed into a non-interest bearing account. One third of the total amount in this account is paid to the employee for each of the months of July, August, and September. Participation in the plan will be available to faculty academic year employees on 9-month appointments only. Participation in the plan is not available to academic employees who will be on sabbatical in the plan year, retiring in the plan year, on a non-renewable year-long adjunct appointment, or on an appointment basis with an FTE that fluctuates during the plan year. For employees entering the plan in the first year, pay will begin with the October 31st payroll, therefore you will not receive September pay. Checks or direct deposits will be processed like any other payroll payment. Deductions will be processed as a 12-month employee.
To enroll in the plan an employee will sign and date an Authorization for Twelve Month Payroll Redistribution Plan form. This form must be returned to the Payroll Office by September 10th. Enrollment in the plan becomes effective at the beginning of the plan year (October 1).
Election to participate in the plan is irrevocable during the plan year. This plan will continue from year to year until participation is cancelled, employee experiences an unevenly reduced appointment such as sabbatical or reduced FTE, termination of employment, or the University discontinues the program.
Pay out prior to the standard distribution schedule may be made only in the event of the employee's termination or death. Under current federal tax regulations, these restrictions are necessary in order for the payments to be taxed when received by the employee. If a participating employee dies, the money accumulated in the deferred accrual account will be paid to the surviving spouse or children or to the estate, according to payroll policies and procedures.
To withdraw from the plan, the employee will sign and date a Request for Termination of Deferred Payroll Distribution Plan form. This form must be returned to the Payroll Office by September 10th. Termination will be effective at the end of the plan year (September 30th) and the employee's salary will revert back to a standard 9-month distribution effective September 16th.