Pension Retirement Calculation Impacts Pension Retirement Calculation Pension

Pension Retirement Calculation Impacts

Pension Retirement Calculation �Pension retirement calculation is based on: � 36 periods of 12 consecutive months plus lag pay �Creditable Years of Service

What is STD Reconciliation? �The Short Term Disability (STD) Reconciliation is the process where the total amount an employee was paid while on STD is compared to what they should have been paid.

What is the Purpose of STD Reconciliation? �To ensure the employee was paid correctly �To ensure that the pension calculation is not over-inflated or under-inflated �If the employee isn’t paid properly, the creditable compensation to calculate the pension is incorrect �To determine if the DIP fund was charged correctly �Office of Pensions manages the DIP fund �To ensure there are no periods without pay �Employee’s are provided pension credit based on their service �If an employee’s service includes periods without pay, the service requires adjustment

When is STD Reconciliation Required? �When employee was on STD for more than a pay period �When the STD period is picked up in the creditable compensation schedule �If the employee was approved for STD retroactively �When the STD period displays high, low or zero pay

What information is needed to successfully complete STD Reconciliation? �The STD Benefit Effective Date �The STD Benefit Termination Date �The Regular Daily Rate for the employee �All applicable Explanation of Benefits (EOB) and/or STD Worksheets �Daily Activity Reports �Any PIP or Workers Compensation information (if applicable) �Some Organizations also supply an STD Worksheet

What is an Explanation Of Benefit (EOB)? � An EOB is a Hartford report that is provided to the employing Organization indicating the Benefit Amount to be issued. � Information provided on the EOB can include contract days worked for less than 12 -month employees, Workers Compensation, PIP payments & Social Security Disability payments. � Note: EOBs may have nothing helpful on them or may not be provided, but this does not mean STD cannot be reconciled.

What is a daily activity report? �The Daily Activity Report provides benefits duration periods for both STD and Workers Compensation/PIP, and SSDI payments. It also provides the amounts for the third party payments.

How do I calculate the daily rate? �The Daily Rate is calculated using the Annual Salary during Short Term Disability divided by the # of days in the contract. �Located under Job Data in PHRST

12 -Month Employee Annual Salary $20, 665. 30 divided by 260 equals $79. 48 Daily Rate

Less than 12 -Month Employee Annual Salary $18, 478. 80 divided by 174 equals $106. 20 Daily Rate

Supplementing STD Payments � Employees may use available annual leave, sick leave, compensatory time or donated leave to bring the STD benefit payment up to a maximum of 100% of pre-disability base salary. � The maximum an employee can supplement is 25% of their daily salary per day. � The supplement should be reflected as hours used on the paycheck. � In order to receive the full 25% Supplement the employee uses 18. 75 hours or 1. 875 hours per day (20 hours or 2 hours per day for an 8 -hour employee).

STD RECONCILIATION WORKSHEET

STD RECONCILIATION WORKSHEET �STD Period: The period during which the employee was receiving payment for STD. �PIP Period: The period during which the employee was receiving payment from a third-party insurance company. �WC period: The period during which the employee was receiving payment through Workers Compensation. �Daily Rate: The regular daily rate as calculated for the period the employee was on Short Term Disability. �Supplement: If the employee supplemented STD payments with Sick/Annual Leave �Hazard Duty: Employees in a Hazard Duty classified position shall have their Daily Rate Calculated with the Hazard Duty pay included.

STD RECONCILIATION (cont’d)