If you think the 3% hold back for state retirement accounts from teacher pay is bad, get a load of this:
Many district teachers on a 26 paycheck cycle are opting to get the balance of the year’s pay prior to the July 1st commencement of the payroll deduction.
Oh my goodness, there’s a little surprise popping up in the pay envelopes for those who “opt in” so to speak.
It’s called taxes.
Income taxes are not deducted by calculating the pay scale as too many folks believe, but are deducted according to a sliding scale based on the size of any particular payroll check.
The bigger the check, the bigger bite in dollars AND tax rate.
Meaning of course that by opting in to collecting the year’s remaining pay in one lump sum means one huge chunk taken out in taxes.
Much more than the 3% that would have been taken starting July 1.
The bigger the check, the bigger the slice going to Uncle Sam.
Estimates are 4 or 5% extra for many teachers, while up to 10 or 15% extra for those over step 17.
Wanna avoid paying into your FRS account? Ya gotta fork over to the IRS instead.
Damned if you do, damned if you don’t.
Here’s a copy of a BTU e-mail going around:
[ This message was sent to all BTU members and applies specifically to BTU members who work for traditional Broward public schools AND elected to receive 26 paychecks per year although they work a traditional school year. This message does NOT yet apply to BTU – Charter School Professionals. Thank you. ]
FRS PENSION PAYCHECK SURVEY RESULTS
The BTU FRS PENSION PAYCHECK SURVEY is now closed. 3005 members responded to the online opinion poll and 80 percent of the participants indicated they would like to receive a lump sum payment of money earned during the 2010-2011 before July 1, 2011 when the state will begin to deduct 3 percent in order to pay for state public employee pensions.
District officials have agreed to pay School Board of Broward County employees who earned salary in 2010-2011 school year by June 30th in order to avoid the 3 percent penalty.
Under the new FRS regulations, any monies paid after June 30 will be charged a 3 percent retirement contribution, even if the money was earned before July 1st if the public employee elected to have their earnings spread over 26 paychecks. It should be noted in response to numerous member questions that, however unfair, it does not matter when monies were earned by public employees, but only that the money is being dispersed after June 30th when the new FRS regulations take effect.
For Technical Support Professionals, district officials have stated one paycheck cycle will also be handled this way. There is a paycheck in July that contains 4 days carryover from June and unfortunately this paycheck will be affected by the 3 percent FRS contribution.
Union officials have yet to meet with City of Pembroke Pines officials to discuss the situation, which will also impact the earnings of Pembroke Pines Charter School teachers.
IMPORTANT NOTE: This message was sent to all BTU members and applies specifically to BTU members who work for traditional Broward public schools AND elected to have their earnings spread over 26 paychecks although they work a traditional school year. This message does NOT yet apply to BTU – Charter School Professionals.
Please send any questions, comments or concerns in reply to this e-mail.
The checks are out and the pain is real.
Oh, how I’d love to have my CAB account back!
Law of unintended consequences, anyone?