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Date: March 26, 2018
To: Deans, Directors, and Department Chairs
From: Andy Johns, Senior Associate Vice Chancellor for Research
Dwayne Pinkney, Senior Associate Vice Chancellor for Finance & Operations
Re: Implementation of Central Pool for Terminal Leave Payouts, Effective July 1, 2018

The University continuously strives to improve its administrative processes and procedures in order to increase efficiency and effectiveness. In keeping with this goal, the University will implement a central pool for the payout of terminal leave effective July 1, 2018. This central terminal leave payout pool will fund any unused vacation and bonus leave that is eligible for payout upon an employee’s separation from the University. Composite benefits and severance pay are already paid from a separate central pool and will continue to operate with no changes.

The central terminal leave payout pool will be funded by an assessment of 1.2% of all SHRA and EHRA Non-Faculty employees’ salary funding sources, for each pay period, using a new account code (516130). This rate was determined by reviewing past leave payouts over the past five fiscal years. The total payouts from this central pool will be reviewed annually and the rate will be increased or decreased to adjust for higher or lower than expected payouts.

The existing central composite benefits and severance pay rates will remain unchanged for fiscal year 2018-19 and will also continue to be reviewed annually. A summary of the applicable rates is listed below.

Any terminal leave payouts that are due to employees that separate from the University July 1, 2018 or later will be paid from the central pool and departments will no longer be responsible for those charges. Although this new Terminal Leave Payout assessment may have an impact on how schools and departments plan and budget, we anticipate that the change will provide for greater financial predictability as departments will pay for terminal leave payouts incrementally in advance rather than at the time of employee separation which may not always be anticipated.

Composite Benefits Fund
Expense Account Code: 516120
Salary Base: EHRA and SHRA Salaries paid from Non-State Funds
Rate: 0.50% (Unchanged from prior FY)

Severance Pay Pool
Expense Account Code: 512510
Salary Base: SHRA Salaries paid from Non-State Funds
Rate: 1.00% (Unchanged from prior FY)

Terminal Leave Payout Pool
Expense Account Code: 516130
Salary Base: EHRA Non-Faculty and SHRA paid from All Funds
Rate: 1.20% (New)

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