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Benefits Commitments

Effective July 1, 2004

Beginning with the 2004-05 fiscal year, benefits for regular faculty and staff will be encumbered/committed in department cost centers. This includes retirement, insurance, social security and medicare. This new feature will allow departments to more accurately project the available balance in their cost centers.

How It Works

Each pay period, new encumbrances will be calculated and posted in SAP cost centers based on the employee wage and benefit data stored in the SAP system.

Departments must notify the appropriate HR office of any changes to an employee’s position or status. If they fail to do this in a timely manner the encumbrances/commitments will not reflect the appropriate amount. For example, if an employee leaves the university but the department does not inform the employment office, then the employee will still be in active status and an encumbrance will still be calculated and posted for that employee.

Note that an amount for social security tax will still be encumbered even after an employee reaches their maximum ($5,449.80) social security tax liability for the calendar year. This issue will correct itself with the first encumbrance run in January of each year.

Benefits Not Encumbered

Temporary staff, Professional Education Services (CEL) faculty and students are the only employee sub-groups that will not have benefit encumbrances. These employee sub-groups also do not have any salary encumbrances/commitments due to the nature of those types of positions.

Benefits related to one-time payments will not be encumbered. For example; higher class pay, paid for one pay period, is a one-time payment and will not have benefits encumbered in advance.

Questions?

Please call Tim Daugherty at 774-7368, Cindy Smith at 774-7363 or Payroll at 774-3481 if you have any questions regarding the new encumbrances.