Bank Savings Option (through payroll deduction)
IRS Qualified Plan for Faculty and Officers of Administration (with 9/16 to 6/15 appointments)
IRS Qualified Plan for Law School Faculty and Officers of Administration (with appointments 8/16 to 5/15)
1. Overview
The University of Oregon offers several plans for 9-month employees to set aside salary for the summer months. There is an IRS qualified plan for faculty and officers of administration, an OUS/SEIU negotiated plan for classified employees, and the Payroll Savings Option, in which a fixed amount or percentage of net pay is direct deposited to a savings account. The following chart illustrates the differences among the plans:
| Type of Plan |
Interest Paid
|
May Withdraw Funds At Any Time |
May Change Deferral Amt At Any Time |
May Re-Enroll In Plan At Any Time | First Paycheck Delayed One Month |
|
Bank Savings Option
(Available to all employees.) |
Yes | Yes | Yes | Yes | No |
| IRS Qualified Plan for Faculty and Officers of Administration | No | No, must follow IRS guidelines. | No, the amount is set according to the plan guidelines. |
No, employees must wait till next plan year during the fall enrollment period. | Yes, this occurs only in the first year of enrollment. |
| SEIU/OUS Negotiated Plan for Full Time Classified Employees | No | Yes | No, employees must choose a deduction amount at the beginning of the plan year. | No, employees must wait till next plan year during the fall enrollment period. | No |
Classified
Pay Redistribution Example
Faculty
and Officers of Administration Pay Redistribution Example
2. Bank Savings Option
Plan Summary:
Employees may direct deposit a fixed amount or a percentage of net pay to a bank or credit union each month. If your goal is to have available funds in the summer months equal to your academic year monthly pay, we recommend that you select 25% of net pay, rather than a fixed amount.
Enrollment:
To enroll in the plan, an employee will complete a new Direct Deposit Authorization Form. Telephone Nancy Miller at 346-1126 or Chad Hartvigsen at 346-1106 in the Payroll Office. They will assist you with the Direct Deposit Authorization Form since percentage deductions require special notation on the form.
Deadline: By the 15th of the month.
Note: This is the only plan in which your deferral earns interest. It is also the most flexible plan in the choices available: since you may change the deferral amount or stop and resume the plan at any time.
3. Plan for Classified Employees
Plan Summary
This plan provides an opportunity for full time SEIU employees working an academic-year schedule to receive pay in the summer months of July and August. Pay deferrals will be made in the months of full pay, October-May.
Employees who enroll shall hold OUS and the University harmless for all claims, damages, suits or other forms of liability that may arise from their participation.
Enrollment
Submit the Authorization For Twelve Month Payroll Option Plan to the Payroll Office by October 15th. The monthly deferral amount for the academic-year must be specified at the time of enrollment. The amount cannot be changed until the enrollment period next fall. Telephone Mindy Schmidling at 346-2960 in the Payroll Office if you have any questions about the plan or need assistance.
Tax Treatment
The plan is not a tax qualified plan. This means the pay is taxed at the time it is earned and deferred. The deferred amount will be included on tax statements during the year it is earned. As a result, there is no tax liability associated with the payouts, and taxes will not be withheld from the July and August payments.
Termination/Withdrawal
Employees may opt out of the plan at any time and receive a payout of the deferral balance. Employees may not resume participation in the plan until the next fall enrollment period. Participation terminates each year: fall re-enrollment is required. To terminate participation in the plan, employees should submit the Request For Termination of Twelve Month Payroll Option Plan to the Payroll Office by the 15th of the month.
It is the employee's responsibility to calculate and specify a deferral amount that will not exceed the monthly gross pay available for voluntary deductions and their deferral. If at any time the deferral amount exceeds the available funds, the university will terminate an employee's participation in the plan until the following enrollment period. During the period of non-enrollment, employees may transition to the "Payroll Savings Option" program in order to continue setting aside funds for the summer months.
Payments
One half of the accrued balance will be paid to the employee in July; the other half will be paid in August. The deferrals do not earn interest. The payments will be issued via the employee's normal paycheck method, either by direct deposit or physical check.
Deductions/Benefits
Benefit deductions for academic-year employees will continue to be ''triple deducted' in May. OPSRP/PERS contributions are paid at the time the pay is earned and taxed. The payouts aren't subject to tax withholdings or deduction; however, these funds may be subject to garnishment or writs. Tax-deferred investments, (TDI), deductions will not be taken from the summer payouts.
Summer Appointments
Pay for summer term employment will not affect the payouts. The deferral payment and the summer pay will be reflected on the same paycheck. However, any taxes or withholdings will be based upon the summer pay.
4. Plan for Faculty and Officers of Administration (with 9/16 to 6/15 appointments)
Plan Summary
The Twelve Month Option Plan provides a method for faculty
and officers of administration on 9-month appointments to spread their
academic year salary over 12 months, October 1 to September 30 of the
following year. The total amount deferred will be paid out in accordance
with the standard distribution schedule: July 1/3, August 1/3, and September
1/3. Participation in the plan is available only to employees on 9-month
appointments. Checks or direct deposits will be processed like any other
payroll payment. Deductions will be process over twelve months.
Note: Employees entering the plan for the first time will not receive pay in September. Interest will not be paid on the deferred amount.
Tax Treatment
This plan is an IRS qualified plan. The deferral funds are not taxed until the summer months. The deferred amount will be included on tax statements during the year it is paid, not in the tax year it is earned.
Enrollment
To enroll in the plan, an employee will complete an
Authorization for the Twelve Month Pay Option
Plan form. This form must be submitted to the Payroll Office
by September 15th. Enrollment in the plan becomes effective at the beginning
of the plan year, October 1st. Telephone Chad Hartvigsen at 346-1106
in the Payroll Office if you have any questions about the plan or need
assistance. Also, Chad can provide projections for you of the change
to your net pay when you choose this plan.
Termination/Withdrawal
Election to participate in the plan is irrevocable during the
plan year. 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. Once
enrolled, the plan continues in effect until the employee withdraws
from the plan at the end of the plan year or resigns from the university.
If a participating employee dies, the money accumulated in the redistribution
pay account will be paid to the surviving spouse or children or to the
estate, according to normal payroll policies and procedures.
When employees retire or resign their positions, the deferral process ends and all monies that have been set aside for pay out during the summer months are paid in full. Formal withdrawal from the program is not necessary.
However, for continuing employees a written request to withdraw from the program is required. These employees should complete a Request for Termination of Twelve Month Pay Option Plan form. This form must be returned to the Payroll Office by September 15th. Termination will be effective at the end of the plan year on September 30th and the employee's salary will revert back to a standard 9-month distribution effective September 16th.
Noted exceptions to participation in the program
Faculty with part-time appointments: It may not always be possible
for faculty with part-time appointments to have their appointments included
in the deferred pay program. To qualify, the primary appointment must
be for the full academic year; additional part-time appointments of
one or two quarter duration will not be included in the deferral process.
5. Plan for Faculty and Officers of Administration (with Law School appointments 8/16 to 5/15)
Plan Summary
The Twelve Month Option Plan provides a method for faculty
and officers of administration on 9-month appointments to spread their
academic year salary over 12 months, September1 to August 31 of the
following year. The total amount deferred will be paid out in accordance
with the standard distribution schedule: June 1/3, July 1/3, and August
1/3. Participation in the plan is available only to employees on 9-month
appointments. Checks or direct deposits will be processed like any other
payroll payment. Deductions will be process over twelve months.
Note: Employees entering the plan for the first time will not receive pay in August. Interest will not be paid on the deferred amount.
Tax Treatment
This plan is an IRS qualified plan. The deferral funds are not taxed until the summer months. The deferred amount will be included on tax statements during the year it is paid, not in the tax year it is earned.
Enrollment
To enroll in the plan an employee will complete an
Authorization for the Twelve Month Pay Option
Plan form. This form must be submitted to the Payroll Office
by August 15th. Enrollment in the plan becomes effective
at the beginning of the plan year, September 1st. Telephone Chad Hartvigsen at 346-1106
in the Payroll Office if you have any questions about the plan or need
assistance. Also, Chad can provide projections for you of the change
to your net pay when you choose this plan.
Termination/Withdrawal
Election to participate in the plan is irrevocable during the
plan year. 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. Once
enrolled, the plan continues in effect until the employee withdraws
from the plan at the end of the plan year or resigns from the university.
If a participating employee dies, the money accumulated in the redistribution
pay account will be paid to the surviving spouse or children or to the
estate, according to normal payroll policies and procedures.
When employees retire or resign their positions, the deferral process ends and all monies that have been set aside for pay out during the summer months are paid in full. Formal withdrawal from the program is not necessary.
However, for continuing employees a written request to withdraw from the program is required. These employees should complete a Request for Termination of Twelve Month Pay Option Plan form. This form must be returned to the Payroll Office by August 15th. Termination will be effective at the end of the plan year on August 31st and the employee's salary will revert back to a standard 9-month distribution effective August 16th.
Noted exceptions to participation in the program
Faculty with part-time appointments: It may not always be possible
for faculty with part-time appointments to have their appointments included
in the deferred pay program. To qualify, the primary appointment must
be for the full academic year; additional part-time appointments of
one or two quarter duration will not be included in the deferral process.