July salary increases affect more than base salary, provide opportunity to review or adjust benefits
For fiscal year 2022-23, the salary level for medical benefit bonuses will increase from $46,900 to $48,800, representing a 4% increase to match the amount of the merit pay distribution.
This means that employees who will have an annual base salary of less than $48,800 after the salary increases will pay the lower level premiums, and those above the level will pay the higher level premiums for their medical insurance. Throughout the year, if an employee enrolled in a Purdue medical plan exceeds the salary level, a bonus increase will take effect at the time of the salary increase.
Employees paid bi-weekly will see a partial effect on their salary on July 13, 2022 and the full effect of their increase on their salary on July 27, 2022. Employees paid monthly will see the effect of their merit increase on salary on July 29, 2022. July 2022.
Merit increases provide employees with a good opportunity to consider adjusting their benefits, such as voluntary retirement savings or health savings accounts.
Simply increase pension contributions by as little as 1% can make a big difference to an employee’s retirement savings and reduce current tax deductions. Salary increases also lead to an increase in the University’s pension contributions.
To change voluntary pension contributions, employees can log in to loyalty, call 800-343-0860 or schedule a one-on-one virtual appointment with a Fidelity retirement planner. To schedule an individual virtual appointment, call 800-642-7131 or online schedule.
Additional benefits and insurance programs affected by the merit increase
Salary increases affect other benefits and insurance programs through coverage value and benefit premium deductions.
For example, an employee’s higher earning years are factored into their Social Security benefits, resulting in increased benefit payments when it comes time to draw Social Security benefits. Higher earnings also increase the value of benefits through basic and supplemental life insurance, long-term disability and short-term disability programs. These programs are based on salary-based rates. Thus, the value of benefits increases when salary increases occur, as well as small increases in deducted bonuses.
With the base amount of term life insurance that the University provides to employees, notional income amounts may also increase. Employees have the option of limiting their basic coverage to $50,000 to avoid imputed income expenses, which can be adjusted through Benefitfocus on A Campus portal. If an employee chooses to limit at the $50,000 benefit level and later wishes to increase the level, a medical examination process to prove insurability will be required.
Questions about benefit-related items can be directed to Human Resources at 765-494-2222 or [email protected]