Arkansas State University offers the option for 9-month faculty to set aside salary for the summer months.
Plan Summary:
The Twelve Month Option Plan provides a method for faculty on 9-month appointments to spread their academic year salary over 12 months. The total amount deferred will be paid out in accordance with the standard distribution schedule:
| Appointment | Appointment Start Date | Defer/Appointment Period | Payout Period | First Pay Date |
| 9 month | 08/16 | 08/16 – 05/15 | 05/16 – 08/15 | 8/31 |
Participation in the plan is available to permanent faculty with this appointment date only. The election applies only to base pay from the academic appointment. A faculty member’s appointment and his or her total salary amount is not changed or affected by an election to receive salary over a 12-month period. Deductions will be processed over twelve months.
When a faculty member elects to receive salary over twelve months, he or she agrees to certain conditions as stated on the election form. These conditions should be studied carefully before the form is signed and submitted. For additional information, please see the list of Frequently Asked Questions.
Note: Interest will not be paid on the deferred amount.
Tax Treatment:
The deferred funds are not taxed until the summer months. The deferred amount will be included on tax statements during the tax year it is paid, not in the tax year it is earned.
IMPORTANT: If for any reason a faculty member’s employment with A-State terminates before the deferred contract ends, all monies that have been deferred are paid in a lump sum. Federal and State taxes will be calculated on the full amount and the tax implication can be significant.
Enrollment:
To enroll in the plan, the faculty member will complete and sign the Twelve Month Pay Authorization and Agreement form. The authorization form must be submitted to the Payroll Services office by July 1st. Enrollment in the plan becomes effective at the beginning of the plan year (August 16th).
Termination/Withdrawal:
Election to participate in the plan is irrevocable during the plan year. Pay out prior to the standard distribution schedule may be made only in the event of the faculty member’s termination, disability or death. Under current federal tax regulations, these restrictions are necessary in order for the payments to be taxed when received by the employee. An election will remain in effect each year until it is changed. Once enrolled, the plan continues in effect until the faculty member withdraws from the plan at the end of the plan year or resigns from the university. If a participating faculty member passes away, the money accumulated in the redistribution pay account will be paid to their estate, according to normal payroll policies and procedures.
When a faculty member retires or resigns their position before the end of the academic year or at the end of the academic year, the deferral process ends and all monies set aside are paid in full. In this case, formal withdrawal from the program is not necessary.
However, for continuing faculty, a written request to withdraw from the program is required. These faculty members should complete a new Twelve Month Pay Authorization and Agreement form and select the “Please stop deferral” box. This form must be completed and returned to the Payroll Services by July 1st for the agreement period beginning August 16. Termination will be effective at the end of the plan year on August 15 and the employee’s salary will revert back to a standard distribution effective August 16.
