Several changes affect 2011 pay
Check your pay statement carefully
Several changes affecting pay and deductions went into effect on January 1, 2011, and continued throughout the calendar year. Employees should check their pay statements carefully to be sure everything is correct. Employees with questions may contact Kirk Tolliver at 1-6679 or firstname.lastname@example.org .
Decrease in Social Security tax. For the 2011 tax year only, the non-Medicare portion of Social Security tax paid by employees has gone down from 6.2% to 4.2%.
Increase in federal tax withholding. For tax year 2011, the Federal tax tables have changed. Most people will see an increase in federal tax withholding for payroll payments received after Jan 1, 2011 due to the expiration of the 2009 American Recovery & Reinvestment Act, which had decreased employee withholding by $400/$800.
Benefit Deductions. Deductions for 2011 benefits take effect with January paychecks. Employees should check their pay statements to be sure proper deductions are being taken for the benefits they chose for 2011, including medical, the health savings account, flexible spending accounts, life insurance, and voluntary benefits (such as dental, legal, critical illness, and universal life).
Medical Premium Tier. To accommodate rebalancing (see below) and December pay raises, the medical premium tier breakpoint for 2011 was raised to $44,000 of annual pay. Employees should review their pay statements to be sure their medical insurance deduction aligns with the proper premium tier. A chart showing annual premiums is available at http://www.purdue.edu/hr/Benefits/Medical/ContributionChart.html.
Voluntary Retirement Savings/TDA. The University selected Fidelity as the recordkeeper for the defined contribution and voluntary savings retirement plans effective January 1. All employees who want to continue to contribute to a voluntary retirement savings account –also known as a tax deferred annuity or TDA – will need to enroll in a Fidelity account and designate their investment allocations for their contributions. To enroll and make investment allocations, go to the Purdue-dedicated Fidelity NetBenefits site at http://www.plan.fidelity.com/purdue.
Rebalancing. For faculty and staff covered by the defined contribution retirement plan, the University’s contribution is reduced to 10 percent and covered employees will now contribute 4 percent of their pay to retirement. Employee salaries will be adjusted to compensate for this change. The pay adjustment, commonly being referred to as “rebalancing,” took effect with the January, 2011, pay. An online rebalancing calculator showing faculty and staff how their specific overall compensation will be affected by rebalancing is available at https://www2.itap.purdue.edu/bs/hrcalculators/rebalanced/index.cfm.
Budgeted Increases. Most continuing faculty and staff received merit increases as part of the 2011-12 budget process.
Employees who prior to January, 2011, began serving the three-year waiting period for University contributions to the retirement plan will begin the 4 percent mandatory contribution upon completion of the waiting period. Their pay will be rebalanced when contributions begin. Employees participating in Voluntary Early Partial Retirement (VEPR) prior to janaury, 2011, will continue with the former University retirement contribution rate through the end of their careers and, therefore, will not be rebalanced. Although VEPR participants are not being rebalanced, they still need to make investment elections through Fidelity for their future retirement contributions.