OTRS Gross-Up Salary Additive
Employment Action Form Procedures
The OTRS Gross-Up Salary Additive provides a means for departments to increase pay to offset
OTRS deductions from pay for employees who are mandated into OTRS and have to
pay their own member OTRS contributions. The additive is 7% of the employee’s
salary. It ends when the employee becomes eligible to participate in OSU’s
7-11 retirement program (at least age 26 and after one year of eligible
service). Since the cost of OTRS is 7% of total compensation (pay plus
benefits), the 7% of pay gross-up covers most, but not all, of the cost.
Employees that would be mandated into OTRS except for being over age 55 may also
receive this additive.
In order to affect the monthly payment, the department will prepare an Employment
Action (EA) form. Under the Proposed section, an additional
assignment will be listed showing the OTRS Gross-Up Additive. The OTRS Gross-Up
Additive assignment is in addition to the employee’s regular assignment. The
following data elements should be the same as the regular assignment: Job
Code, Position Number, FTE, Class Code, HRS Div,
Assign Dept. The Pay Rate should be 7% of the employee’s regular
salary. The Hours should be listed as 1.00 and OTRS should
be written on the right side of the assignment line to ensure the proper codes
are used by payroll processing.
The begin date should be the first of the month in which the employee is
mandated to pay the OTRS and continues until the employee becomes eligible for
OSU’s 7-11 retirement program. This additive assignment may cross fiscal years
and will need to be continued through the budget process (see discussion below).
The OTRS Gross-Up Additive is considered a "benefit" rather than
"pay" for OSU purposes. The earnings code is 017. The assignment is
excluded when providing salary verifications, calculating life insurance, or
determining workers’ compensation and unemployment benefits. However, it is
included in the calculation of total compensation for purposes of OTR
contributions. The OTRS Gross-Up amount is considered taxable income for federal
and state income tax withholding purposes and social security and Medicare.
Although a separate assignment, it is paid with regular pay.
The OTRS Gross-Up Additive is charged to the same accounts as indicated on
Labor Distribution for the position number listed. It cannot be charged to a
different account. This amount is also subject to the Average Fringe Benefit
calculation.
OSU-paid retirement benefits begin the 1st of the month coincident
with or following completion of one year of service (if the employee is age 26).
Therefore, a person hired July 1 would meet the service requirement the
following June 30 and would enroll in the retirement program July 1. A person
hired on July 2 would meet the service requirement on July 31 of the following
year and would enroll the following August 1. The OTRS Gross-Up Additive should
end when 7-11 OSU retirement contributions begin.
The OTRS Gross-Up Additive will automatically terminate with the termination
of the assignment with the same position number as listed for the additive.
Termination during a month will result in a pro-ration of the amount.
Any OTRS Gross-Up Additive assignment with an end date of "FN" or
"06/30/yyyy" will automatically terminate at the end of the current
fiscal year unless continued through the budget process or a new EA form with a
continuing assignment is completed and processed in a timely manner. It is
expected that most assignments will continue by approval of the department
during the BDS process for the following year. However, it is very important
that the correct end date (as explained above) be designated in the BDS process.
Questions regarding the OTRS Gross-Up may be referred to Employee Services,
(405) 744-5449.
