MoreyUnit

     A number of inquiries about the recently repealed 2.75% Performance pay statute.  The Department of Administration has issues guidelines and answers to many of your questions.  Here are some of those questions and answers:

What agencies are affected by the performance pay reduction?

All state agencies, boards and commissions are affected by the performance pay reduction.

When does the performance pay program end?

The performance pay program that was implemented pursuant to A.R.S. § 38-618.01 ends on June 15, 2010. The following pay period (June 26 - July 9) will be the first pay period that employees will no longer receive performance pay.

How will the 2.75% performance pay reduction be implemented?

For all agencies participating in the performance pay program pursuant to A.R.S. § 38-618.01, ADOA will remove the performance pay code from HRIS thus eliminating the ability for employees to receive the 2.75% performance pay.

How long will the performance pay reduction last?

The performance pay reduction is permanent.

Will the performance pay reduction affect an employee's base pay in agencies not headed by an elected official?

No, performance pay has not been part of an employee's base pay, and the reduction of performance pay will not change the employee's base pay.

Will the performance pay reduction impact overtime earnings?

Yes. Performance pay is included in the overtime rate, therefore the reduction of performance pay will reduce overtime earnings.

Can an employee's pay be increased in order to offset the performance pay reduction?

No, an employee's pay may not be increased to offset the reduction.

Can employees grieve the performance pay reduction?

No. This performance pay reduction is not grievable or appealable.

Will the performance pay reduction impact employees' retirement contributions and payable benefits?

ASRS provided the following response regarding this question:

A member's retirement in the Defined Benefit Plan is determined by a formula that takes into account average annual salary, years of service, and a graded multiplier that increases with years of service. Furloughs and salary reductions may impact the formula because the highest 36 consecutive months of salary over the last 120 months are used in the calculation. Employees with retirement questions should contact the appropriate retirement system directly. Both ASRS and PSPRS have issued information relating to the effects on retirement benefits that may be caused by pay reductions.

ARIZONA STATE RETIREMENT SYSTEM (ASRS)

3300 North Central Ave. 13th Floor

Phoenix, AZ 85012

Phoenix: (602) 240-2000

Tucson: (520) 628-5107

Outside Metro Phoenix & Tucson: (800) 621-3778

TDFD (Hearing Impaired): (602) 240-5333

Website: www.azasrs.gov

PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM (PSPRS)

ELECTED OFFICIALS RETIREMENT PLAN (EORP)

CORRECTIONS OFFICERS RETIREMENT PLAN (CORP)

3010 E. Camelback Road #200

Phoenix, AZ 85016

In Phoenix: (602) 255-5575

Website: www.psprs.com

What impact will the performance pay reduction have on an employee's health, dental and vision insurance?

There is no impact to an employee's health, dental or vision insurance.

What impact will the performance pay reduction have on an employee's life insurance?

There is no impact to an employee's life insurance.

What impact will the performance pay reduction have on an employee's disability insurance?

The calculation for disability benefits is calculated on bi-weekly earnings, so disability benefits may be reduced based on earnings in the pay period at the time of disability.

If you would like to see the entire document, follow this link: