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Faculty, Admin Pro benefits premium deductions

December 4, 2012

Good news! You'll have a little more 'take home' pay in this month's pay advice, if enrolled in an insurance plan.

As you may already be aware, the premium deduction process is changing for Faculty and Administrative Professionals beginning in December 2012. The Cost Share benefits program is modifying the premium collection method for calendar year 2013 in order to better conform with Healthcare Reform. This will allow the plans to account for contributions on a 12-month ‘plan year’ basis (January-December). Premiums are currently paid a month prior to the month of coverage (i.e., December premium is for January coverage).

The new premium deduction method will create a change in your take home pay in December 2012, if enrolled in an insurance plan, as you will not see premium deductions (medical, dental, vision) from your pay advice; however, imputed income for Basic Group Term Life and deductions for Flexible Spending Accounts (FSA) will apply.

2013 deductions

Beginning in calendar year 2013 benefits premium deductions will occur as follows:

  • Your premiums deducted from your pay advice will be for the current month’s coverage, i.e.,
    • January pay advice reflects premium contribution for January coverage
  • 9-month employees paid over nine months will incur double benefit deductions in the spring to ensure benefits coverage through the summer months, i.e.,
    • April pay advice - two premium deductions for coverage in April and May;
    • May pay advice - two premium deductions for coverage in June and July;
    • August pay advice - premium deduction returns to a normal current month’s coverage cycle

Defer pay to retirement

Since you may have 'extra' take home pay in December, this is an excellent time to take action and consider enrolling or modifying your current contribution in a supplemental employer sponsored retirement plan to tax-defer the benefits premium amount, which would otherwise be deducted from your December pay advice. But hurry, you only have until the Dec. 10 to defer (or increase your deferral for this tax year)!

The Benefits and Privileges afforded to you through University employment provide the opportunity to enhance retirement savings through a supplemental tax-deferred (pre-tax) program (i.e., University 403(b), PERA 401(k) or 457), which offers both current and tax-deferred advantages. The University promotes the benefits of saving for retirement and encourages employees to take full advantage of the employer sponsored plans. It is important to save now to secure your financial future in retirement, and it is also advisable to periodically review your investments against your financial goals and to make any adjustments accordingly prior to retirement. These supplemental retirement programs allow you to reduce the amount of taxes you pay now and earnings grow tax-deferred until they are distributed. You may contribute up to the annual IRS maximum each year.

Retirement vendors available for assistance

The University 403(b) retirement vendors (Fidelity, TIAA-CREF, VALIC) provide on-campus and online services to assist you in planning for retirement. Make an appointment today and receive assistance with selecting investments for your portfolio, reviewing your retirement plan asset allocations and assessing your overall preparedness to enjoy a lucrative retirement. Saving even a small amount now can potentially lead to big dividends in the future due to the effectives of investing a particular amount on a regular schedule, regardless of the investment share price, and the ability to obtain the added benefit of tax-deferred growth and compounding returns. This can allow the money you contribute to accumulate substantially over time as referenced below:

Free retirement counseling services

The University’s 403(b) plan sponsors provide free retirement counseling appointments for employees. A calendar of upcoming appointment availability is located on the Human Resources website:

Tax deferred investment enrollment and contribution change process

You may enroll or change your contribution to the University 403(b) or PERA 401(k) by completing the appropriate salary reduction form at the appropriate link below. The PERA 457 requires a PIN and the salary reduction instructions are located on PERA’s website.

  1. University 403(b)Enrollment deadline is Dec. 10 to defer contributions pre-tax.
  2. PERA 401(k); Enrollment deadline is the Dec. 10 to defer contributions pre-tax.
  3. PERA 457; The enrollment deadline and PIN requirement for online enrollment occurs one month prior to the requested contribution month, please plan accordingly.

Additional information about voluntary retirement plans is located on the Human Resources website.

Questions?

Please do not hesitate to contact the Human Resources Service Center via email or phone at (970) 491-MyHR (6947), should you have questions or require assistance in completing the salary reduction form.