Employer Annuity Plan contributions are billed as a percentage of salary basis. Lay employees are billed as a percent of cash salary. The bills are produced and mailed quarterly, approximately six weeks prior to the start of the quarter. For billing purposes, the salary basis should be annualized. To annualize the salary basis, calculate the salary basis as if it will be paid for a full calendar year. For example, an employee commences employment July 1, 2016, and the employer will contribute 14% to the employee’s Annuity Plan. The employee’s actual salary basis (the cash compensation plus housing allowance) that is payable for the six months is $25,000. However, for the purpose of completing the Salary Report for billing purposes, the amount should be annualized, and listed as $50,000.00, effective July 1, 2016. The billing program will prorate the annualized salary and bill for 14% of $25,000.00 for the two remaining quarters in the year. If the salary basis is reported as $25,000.00, effective July 1, the member’s account will be underbilled.
