Faculty 12 Month Deferred Pay Plan
The Twelve Month Payroll Redistribution Plan provides a method for academic employees on 9-month appointments to spread their 9-month gross salary equally over the 12-month plan year (October 1 through 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). Interest will not be paid on the deferred amount. Participation in the plan will be available to academic employees on 9-month appointments only. Open enrollment for the plan year ends on September 10. Employees entering the plan for the first time will not receive pay in September. 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. 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.
Where the payroll system is currently so programmed, the plan continues in effect until the employee terminates the plan. To withdraw from the plan, the employee will sign and date a Request for Termination of Payroll Redistribution Plan form. This form must be returned to the Payroll Office by September 10. Termination will be effective at the end of the plan year (September 30) and the employee's salary will revert back to a standard 9-month distribution effective September 16th. 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.