COMPTROLLER'S SEAL STATE OF CONNECTICUT

STATE OF CONNECTICUT

NANCY WYMAN
COMPTROLLER
OFFICE OF THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106-1775
MARK OJAKIAN
DEPUTY COMPTROLLER

INTERDEPARTMENTAL MEMORANDUM

March 6, 2009

The Honorable Theresa C. Lantz, Commissioner
Department of Correction
24 Wolcott Hill Road
Wethersfield, CT 06109

Subject: Retroactive Salary Increases, Retroactive Annual Increments and Lump Sum Payments for Retired and Separated American Federation of State, County and Municipal Employees (AFSCME) NP-4 bargaining unit

I. AUTHORITY

Interest Arbitration Award for American Federation of State, County and Municipal Employees (AFSCME) NP-4 bargaining unit for the period July 1, 2008 through June 30, 2011.

II. ELIGIBLE EMPLOYEES

American Federation of State, County and Municipal Employees (AFSCME) bargaining unit (NP-4) employees who were actively employed on July 1, 2008 but have since retired or separated from State service.

III. INSTRUCTIONS TO ACTIVATE RETIRED OR SEPARATED EMPLOYEES

Core-CT has created a job aid titled "Check List for Retroactive Payments to Terminated Employees" which is posted on the Core-CT website. Agencies should refer to this job aid for assistance in rehiring or activating terminated and retired employees for the purpose of making retroactive payments.

IV. PAYROLL PROCEDURES FOR RETROACTIVE PAYMENTS FOR RETIRED AND SEPARATED EMPLOYEES


Payroll procedures for processing retroactive payments are contained in the Interdepartmental Memoranda issued February 11, 2009 and February 20, 2009. Please refer to these memoranda for retroactive compensation information.

V. COMPENSATION

A. Retroactive General Wage Increases are effective as follows:
Effective Date Increase
July 4, 2008 (Retroactive) 3 % of Base Salary
B. Retroactive Annual Increments and Retroactive Lump Sum Payments for Maximum Step Employees
Employees will continue to be eligible for and receive annual increments and lump sum in July 2008 or January 2009 in accordance with existing practice.

VI. RETROACTIVE PAYMENTS FOR RETIRED AND SEPARATED EMPLOYEES

When calculating the retroactive payments, calculate to the date of retirement or separation from state service. For the period July 4, 2008 through date of separation, agency staff must calculate and process the following retroactive payments manually. The retroactive payments should reflect the additional compensation due as a result of the manual calculation of the retroactive difference due on the biweekly and overtime payments made to impacted former employees during the aforementioned dates and lump sums as applicable.
Such payments are subject to mandatory deductions: federal withholding tax and state income tax annualized, social security tax and retirement contributions.
A. Retroactive General Wage Increase (GWI)
Effective Salary Period Check Date
Date Increases Covered
July 4, 2008 3% 07/04/08 - date of separation 03/27/09
B. Retroactive Annual Increments and Retroactive Lump Sum Payment at Maximum Step
Annual Increment and Period Check Date
Lump Sum Date Covered
July 4, 2008 07/04/08 - date of separation 03/27/09
January 1, 2009 12/19/08 - date of separation 03/27/09


VII. RETIREMENT PROCEDURES
The additional retroactive compensation must be reported to the Retirement and Benefit Services Division in the manner described below as such additional payments may have an impact for retirement benefit purposes.
Each agency must provide the Retirement and Benefit Services Division's Audit Unit with a list of affected retirees by name, employee number and retirement date accompanied by the worksheet detailing the calculations utilized for these adjustment payments. Worksheets for separated employees must also be provided with a clear notation on each worksheet indicating such status.

VIII. CALCULATION OF INTEREST PENALTY

If payment was made in the check dated February 27, 2009, (refer to memorandum dated February 20, 2009), no interest is due. If payment is made in a later check date, an interest penalty of 5% is payable for the period January 5, 2009 until the date the eligible employee receives all retroactive amounts due him/her under the interest arbitration award.
In the example below, the check date of March 27, 2009 is being used. Agencies must calculate to the actual check date of payment.
81 days/360 days multiplied by 5% multiplied by the retroactive lump sum payment
Example: If the retroactive amount was $300:
81 days /360 days x .05 x $300 = $3.38
Multiply the retroactive lump sum amount paid by the number of days between
January 5, 2009 and the date of the payment of the retroactive payment March 27, 2009, (which is 81 days) divided by 360, then the product multiplied by 5%.

IX. PAYROLL PROCEDURES FOR INTEREST ARBITRATION AWARD

On the Additional Pay Page: Amount; Earnings Code INT.

Interest paid on a wage award is not considered wages (IRS Revenue Ruling 72-268). Therefore, the subject interest penalty would not be subject to withholding for income taxes, employment taxes and retirement contributions.

X. PAYROLL PROCEDURES

Payment of Retroactive Salary Increases and Retroactive Annual Increments and Retroactive Lump Sums.
On the Additional Pay Page: Amount; Earnings Code RTR.

XI. GENERAL

Questions may be directed as follows:
Payroll Procedures:

Office of the State Comptroller Payroll Services Division (860) 702-3463
Memorandum Interpretation:

Office of the State Comptroller, Fiscal Policy Division (860) 702-3440.
Direct the list of retirees and separated employees with a copy of the calculation worksheet to:

Office of the State Comptroller
Retirement Division
Audit Unit
55 Elm Street
Hartford, CT 06106


NANCY WYMAN
STATE COMPTROLLER

NW:ED

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