I. Title
Benefit Replacement Pay Procedure
II. Objective
(Not explicitly detailed)
III. Scope
(Not explicitly detailed)
IV. Procedure
Prior to January 1, 1996, the State paid 5.8% of the social security tax on the first $16,500 of the State employee’s earnings. This payment was treated as taxable income to the employee, and the remaining FICA tax was paid by the employee.
A. Legislative Background
The 74th Legislature passed Senate Bill 102, eliminating the provision for the State of Texas to pay the 5.8% portion of the FICA tax. The legislation provided that state employees on the payroll as of August 31, 1995, would continue to receive the state-paid FICA benefit on wages paid through December 31, 1995. Beginning with wages paid January 1, 1996, state-paid social security ceased and Benefit Replacement Pay was paid to eligible employees to offset the loss of state-paid social security.
B. Calculations and Reporting
- The Benefit Replacement Pay calculation is based on the employee’s compensation as of October 31, 1995.
- As of September 1, 1997, the Benefit Replacement Pay was added to the gross pay of eligible employees.
- It is no longer reported as a separate item.
C. Eligibility Restrictions
- Break in Service: An eligible employee who leaves State employment for 30 or more consecutive days after August 31, 2005, becomes ineligible to receive benefit replacement pay upon re-employment with the State.
- Retirement: An eligible employee who retired from State employment on or after June 1, 2005, who receives an annuity from a public retirement system, is ineligible to receive benefit replacement pay upon re-employment with the State.
- Military Leave: Employees on leave without pay due to military leave retain eligibility for BRP upon return to active employment.
V. Definitions
None
VI. Relevant Federal and State Statutes
None
VII. Relevant UT System Policies, Procedures and Forms
None
VIII. Who Should Know
(Information not explicitly listed in provided content)
IX. UTA Office(s) Responsible for Procedure
- Responsible Officer: Chief Human Resources Officer
- Sponsoring Department: Human Resources
X. Dates Approved or Amended
February 11, 2011
XI. Contact Information
All questions pertaining to this procedure should be directed to the Chief Human Resources Officer at askhr@uta.edu.
Send notifications of errors or changes to: policysite@uta.edu