Faculty appointments are made by the dean and are subject to approval of the provost and trustees if the appointment is at the rank of Professor or includes tenure. Under Article 6 of the CBA, some terms of an initial appointment letter will be limited to the period of initial appointment.

Faculty Appointments and Pay Under Semesters

Summer 20US Payroll dates for Monthly Paid Faculty
Term Begin End








August 31

Drop w/full refund date
Full semester May 11 Aug 8 x
x x
Session A June 1 July 5
  x x   6/5/20
Session B July 6 Aug 8     x x 7/10/20
Session D May 11 June 23 x x     5/17/20
Session E June 24 Aug 8     x x 6/30/20
May-mester May 11 May 31 x x     5/13/20

Monthly PCR due dates are: May 12, 2020; June 15, 2020; July 17, 2020; Aug 17, 2020

Deferred Compensation under Semesters FAQ

The Internal Revenue Code’s Section 409A, part of the American Jobs Creation Act of 2004, resulted in regulations that affected the University due to semester conversion. IRC Section 457 also covers deferred compensation rules.

These regulations prohibit an employee from deferring from one tax year to the next. Any compensation in excess of a “safe‐harbor” amount (currently $18,000). In other words,compensation earned in one calendar year should generally be paid in that calendar year (so that it can be taxed in that year), and if it is not, the amount deferred must be less than the safeharbor amount; otherwise, a tax penalty will be levied on the deferred amount that exceeds the safe harbor.

Only faculty with 2‐semester (“9‐month”) appointments are affected.

Of those, only faculty earning base pay (coded 0FAC‐Faculty Salary) and administrative stipends (0ADM‐Salary 2) totaling more than $108,000 per academic year are currently affected. That threshold is determined through a calculation of the safe harbor, which the IRS periodically adjusts.

Employees on 12‐month appointments will not be affected.

For the affected faculty, the University will increase that person’s monthly pay for the paychecks from September through December and will decrease the monthly pay for the eight paychecks from January through August. The total of all monthly paychecks will equal the faculty member’s annual salary and administrative stipend (if any). 

The four fall‐semester paychecks will not be increased sufficiently to equal all compensation accrued in fall, but they will come close enough to ensure that the deferred compensation does not exceed the safe‐harbor amount.

The affected faculty would be subject to a 20% penalty on that portion of the deferred compensation that exceeds the safe‐harbor amount.

Individual faculty who are affected by a pay adjustment whereby their base pay (coded 0FAC‐Faculty Salary) and administrative stipends (0ADM‐Salary 2) totals more than $108,000 per academic year should use the “409A Calculator” that will enable them to calculate the distribution of their annual pay over the academic year.

They will not have to do anything. Payroll will automatically adjust the pay distribution for those who are affected.


They will continue to receive 12 equal installments of their annual pay across the year.

If a faculty member receives a salary increase or stipend that would result in a deferral that exceeds the safe‐harbor amount, he/she should use the “409A Calculator” that will enable them to calculate the distribution of their annual pay over the academic year.

No, the regulations apply to the deferral of compensation, not to the deferral of taxes.

On semesters, a faculty member with a 9‐month appointment will earn one‐half of their salary in the fall semester but will receive only one‐third of their annual pay installments in fall, resulting in a deferral of about 17% of their annual compensation from one tax year to the next. If that 17% exceeds the safe‐harbor amount, the employee will incur a penalty.

Of the 17 wage types that faculty may earn, only two will be affected: (0FAC)‐Faculty Salary and (0ADM)‐Salary 2; so only when those two types of pay exceed $108,000 will this process come into play.

Extra compensation from grants (EXC) and from non‐grant sources (EXN, ADL) will not be affected because they will generally not be deferred.

No, the adjustment will not affect the monthly credits or deductions for benefits.

No, the adjustment will not affect STRS service credit, but variations in monthly pay will cause STRS monthly contributions to vary; total STRS annual contributions will not change.

Several circumstances may account for different experiences at other universities:

  • The regulations were not enforceable at UC until fall 2009.
  • Because the IRS has being saying for several years that it will issue new regulations addressing deferred compensation issues raised by 409A and 457 in the very near future, some universities may have decided to wait for final regulations before implementing changes.
  • IRS guidance related to the currently existing regulations is complicated, confusing and, at times, contradictory.

Note that UC sought guidance on the matter from outside counsel specializing in compensation tax law. We are following their advice because this approach best protects faculty from the possibility of facing a substantial tax penalty.