During the past legislative session, the Governor and the General Assembly passed legislation authorizing bonus and leave awards for state employees. This memorandum applies only to the bonus payment as it pertains to members of the faculty (both teaching & research and administrative & professional faculty) and members of the Professional Research Staff.

In this memorandum, references to members of the Professional Research Staff include the following job classifications: research associate, research scientist, senior scientist and principal scientist. Professional Research Staff will be referred to as "faculty" for purposes of this memorandum. Research assistants, while members of the Professional Research Staff, accrue leave, and therefore will have a choice of receiving a bonus payment or a leave award. For more information on the implementation of this plan for Research Assistants, see http://www.hrs.virginia.edu/mgrmemos/statebonus.html.

All full-time salaried and part-time salaried faculty (who work at least 50 percent effort) who were employed prior to May 25, 2002 and remain employed by the University on August 30, 2002 are eligible to receive the bonus payment. Part-time salaried faculty who are employed at least 50 percent effort are eligible to receive the bonus payment in accordance with the amount of their part time salary, e.g. they are eligible to receive a 2.5 percent bonus on the amount of their part-time salary. Faculty are ineligible to receive the bonus in the form of leave.

Twelve-month faculty will receive the bonus payment in their August 30, 2002 paycheck. Nine-month faculty will receive the bonus payment in their September 30 paycheck.

All bonus payments will be based on merit. While it is anticipated that the total funds devoted to faculty bonus payments will not exceed the average award of 2.5 percent, individual faculty bonuses may exceed the average. Any individual bonus payment in excess of five percent or recommendations of no bonus payment will be accompanied by a written justification to the appropriate vice president by June 3, and will be subject to the approval of that vice president. Bonus payments may not be augmented by other resources available to the school or unit. Deans and Unit Heads have been asked to notify each faculty member in his/her area of the amount of the bonus no later than June 21, 2002.

Faculty who return from leave without pay may be eligible to receive a bonus payment, so long as they return from leave no later than June 30, 2003. The bonus payment will be based on the faculty member's pre-leave salary as of July 1, 2002 (for 12-month faculty), or September 1, 2002 (for 9-month faculty). Faculty who are on leave with pay or leave with partial pay are eligible to receive the bonus payment on the regular payment date in accordance with their full-time salary.

Faculty who are planning to retire must have a retirement date after September 1, 2002 in order to receive a bonus payment. Retiring faculty must continue to work, or be on paid leave, through August 30, 2002 in order to qualify for the bonus payment. Bonus payments will not be included as creditable compensation for determining future retirement benefits.

Faculty may wish to tax defer the bonus to the University's 403(b) program or the state's 457 Plan in lieu of receiving a bonus payment on August 30, 2002. Faculty may contribute some of, or the entire, bonus to a tax-deferred savings plan (TDSP) in order to postpone paying income tax on the bonus. However, FICA tax must be paid on the amount that is contributed and the annual maximum deferral amounts continue to apply. Faculty who wish to tax defer their bonus payment should contact the University Human Resources Benefits Division for more information at 924-4392. Forms to tax defer some of, or the entire, bonus into a TDSP must be received in the UHR Benefits Division by July 15, 2002. The employer cash match is not paid on the bonus.

If you have questions regarding the implementation of the Faculty Bonus Plan, please contact the office of your dean or unit head.