Estimating Benefit Costs

The following generally describes how to determine benefit costs on an employee’s additional pay appointment:

  • All additional compensation will have the 1.45% Medicare benefit expense posted to 603012.      
  • Additional compensation for employees with less than a full-time appointment will generally have the 6.2% FICA/Oasdi benefit expense posted to 603001.
  • Additional compensation for employees, who are already CalPERS members, with less than a full-time appointment will generally have the 28.325% Retirement benefit expense posted to 603005.
  • If the employee receiving the additional compensation fits all three scenarios the total benefit expense would be 35.975%.  However, this is likely not the norm. 

Most additional appointments are for employees that are already at 1.0 time-base and are current CalPERS members.  If this is the case, the only additional benefit expense incurred would be the 1.45%. 

Below is a chart that may be useful in determining the retirement component of the benefit costs and budgeting benefit expenses.  If a department is unsure if their employee is a current CalPERS member, they can review past LCD to see if expenses are posting to 603005 for that particular employee.  There is a chance that a particular payment could affect an employee’s membership status and trigger the retirement costs.   

 

 

 

 

Est. Benefit Expense

CalPERS member

AND
Full-time Employment

NO Retirement

Verify in LCD that 603005 expenses are posting for individual and

FTE = 1.0

1.45%

CalPERS member

AND
Less than full-time employment

YES Retirement

Verify in LCD that 603005 expenses are posting for individual and

FTE less than 1.0

35.98%

Not CalPERS member

Depends, Payroll will evaluate and make a determination, as over time an employee may become eligible

Verify in LCD that no 603005 expenses are posting for individual

7.65%

Not CalPERS member

BUT

3rd consecutive semester of half time or more

YES Retirement

According to CalPERS rules, a temporary faculty member becomes eligible for retirement benefits:

“If appointed for an academic year at half-time or more, the employee qualifies for membership at the beginning of the third consecutive semester or at the beginning of the fourth quarter (GC 20305 [a][4]).”

35.98%