Transcript Employee Educational Benefit (EEB) Program Change

Employee Educational
Benefit (EEB) Program
EEB Background
• Staff Council has been requesting enhanced
benefits
• UTSA’s current program costs $285,000 /
year
• Changing from a 127 Qualified Educational
Assistance Plan to a 177(d) Qualified
Tuition Reduction Plan will allow us to
double the benefit to employees
Why change?
• Under the current IRS plan, UTSA is paying
itself for employee participation.
• Under the proposed plan, as an educational
institution, UTSA may waive designated
tuition and fees to employees.
• Allows the benefit to be doubled
• Change to coincide with Fall 2012
registration which begins April 1st
FY 11 EEB Participation
Unduplicated
Headcount
Average SCH /
Student / Semester
UTSA Paid SCH
Unpaid SCH
UG
70
6
389
198
GR
85
5
438
122
DOC
23
5
113
46
TOTAL
178
940
366
Program Comparison
Program Feature
Current EEB
Proposed EEB
Credit hours per
academic year
Up to 6 SCH
Up to 12 SCH
What does UTSA
cover?
Designated tuition & most
mandatory fees
Designated tuition & ALL
mandatory fees
What does the
employee pay for?
Statutory tuition & incidental
college/course fees
No Change
Eligibility
Benefits eligible for the past 12
months prior
Eligibility will be verified by
HR; new form will be used
Supervisor
Approval?
If classes will be taken during
normal business hours & to
certify course is job-related.
No Change
Taxation of Benefit IRS excludes the first $5,250
Graduate tuition must be
reported as taxable income
Tax Implications
• Undergraduate tuition & fees are not
taxable at any amount of benefit.
• For a graduate student taking 6 SCH during
a tax (calendar) year, at a 20% tax rate,
estimated liability is $332.
• Total value of benefit = $1,660 - $332;
employee ‘saves’ $1,328