1. University-year Pay Cycle Changes Eliminate Schedule II (Non-LEO Faculty) May 2009 Ann Arbor and Flint Campuses U Yr Schedule Chg Interchg 05_09.ppt

2. Topics to be Covered  Overview of change  “Catch-up” Payments Made to Faculty  HR Appointment Data  Impact on Federally Sponsored Funding during Academic Year  Pay Cycle Comparison – Current and New  Example of Transition Year General Ledger (GL) Distribution  Resource Information

3. Overview of Change  Eliminate Schedule II pay cycle that was originated on 9/1/2001  Reasons for change  University-year Design Group Recommendations  IRS Notice issued in July 2008, impacting deferred compensation status  Return to salary pre-payments for July and August for September 1 st new hires  Pre-payments will be made in early September once the faculty member is on campus  Terminations, at the end of the academic year, will be paid through June 30 th. Benefit coverage will end May 31 st.  Salary for Fall Term will be paid July thru December  Salary for Winter Term will be paid January thru June  Prorations NO LONGER needed for effort, compensation rate or DBE changes effective September 1 st or January 1 st  Prorations, when needed, will be calculated on a “per term” basis.

4. “Catch-up” Payments Made to Faculty  Partial group of University-year faculty paid 2/12 ths in December 2008 – Group 1  Paid in calendar year 2008 due to deferred compensation impact of IRS Notice  University-year faculty to be paid 2/12 ths in June 2009 – Group 2  Will be paid in the same academic year as Group 1.  Conversion date to Schedule I for these two groups is 9/1/08  Remaining University-year faculty on Leave without salary will be paid 2/12 ths upon return from Leave

5. HR Appointment Data  JOB Data  Merit increases will be effective September 1 st and will not be paid retroactive to July 1 st  Effort changes effective September 1 st will be retroactive to July 1 st and processed at the previous academic year pay rate for July and August  Leaves of Absence with or without pay effective September 1 st will be retroactive to July 1 st and should be processed before July  DBE Data  University Year changes to Short Codes and distribution percentages effective September 1 st will be retroactive to July 1 st

6. HR Appointment Data (cont’d)  Pre-approved Promotions Process  HRRIS will process the pre-approved promotional appointment changes for regular, clinical and research faculty in June with the effective date of September 1 st  University Year DBE Process  HRRIS will process the university year department budget earnings for the next academic year in June with the effective date of September 1 st

7. Impact on Federally Sponsored Funding during Academic Year  Pre-payments in July and August  Will result in “blended pay rate” being used for Fall Term charges to the federal sponsor  DBE Data  Sponsored U-Yr Flag will be effective each Sept 1 st to reflect the entire pay cycle for the academic year  General Ledger Account Values  Differentiate salary charged to federal sponsor during academic year

8. General Ledger Account Values  General Ledger Account Values will differentiate the charges to a federal sponsor (1/9 th or 1/8 th ) from the charges to other funding sources over 12 months. Job Code GL Account (Charged over 12 months) GL Account (Charged over 9 months)Job Code Title 128870510600501000Faculty Associate 128900500100500110Research Investigator 128920500100500155Assistant Research Scientist 128940500100500175Associate Research Scientist 128960500100500150Research Scientist 129500500100500125Research Professor 129520500100500130Associate Research Professor 159100510200500800Associate Director 201000500400500450Professor 201500500700500750Associate Professor 202000500900500950Assistant Professor 202840501430501480LEO Lecturer II 202860501440501480LEO Lecturer III 202880501460501480LEO Lecturer IV 203000501400501450Lecturer

10. General Ledger Distribution for Transition Year  Example: A full-time faculty member has one appointment on the Ann Arbor campus and is partially funded by federal sources. The 9/1/08 compensation rate is $60,000. The 9/1/09 compensation rate is $72,000. The appointment is charged to the General Fund (120000) for 50% allocation and federally funded sponsored project (034000) for 50% allocation. 034000120000 090833090834 034000 MonthEarn CodeAmountEarn CodeAmountEarn CodeAmount Gross Pay Earn CodeAmount July 2009 2,500.00 5,000.00 August 2,500.00 5,000.00 SeptemberGLA4,250.00REG3,000.00ENP-1,250.00 6,000.00 FBI175.00 OctoberGLA4,250.00REG3,000.00ENP-1,250.00 6,000.00 FBI175.00 NovemberGLA4,250.00REG3,000.00ENP-1,250.00 6,000.00 FBI175.00 DecemberGLA4,250.00REG3,000.00ENP-1,250.00 6,000.00 FBI175.00 January 2010GLA3,600.00REG3,000.00ENP-600.00 6,000.00 FBI84.00 FebruaryGLA3,600.00REG3,000.00ENP-600.00 6,000.00 FBI84.00 MarchGLA3,600.00REG3,000.00ENP-600.00 6,000.00 FBI84.00 AprilGLA3,600.00REG3,000.00ENP-600.00 6,000.00 FBI84.00 MayGLA3,600.00REG3,000.00ENP-600,.00 6,000.00 FBI84.00 June REG3,000.00ENP3,000.00 6,000.00 Subtotal 35,000.00 0.00 70,000.00 1,120.00 July REG3,000.00ENP 3,000.006,000.00 August REG3,000.00ENP 3,000.006,000.00

11. Resource Information  Payroll resource materials  In Interchange packet Four examples of pay and distribution prorations  On July 1, 2009, available on Payroll web site : http://www.finops.umich.edu/payroll/resources/admin/ %252Funiversityyearappointmentinformation Additional proration worksheets http://www.finops.umich.edu/payroll/resources/admin/ %252Funiversityyearappointmentinformation