STAFF BENEFITS - 6412

State contributions to the Public Employees' Retirement Fund, Old Age and Survivor Insurance, State Employees' Health Benefits, Worker's Compensation, and contributions to prefund Other Post-Employment Benefits (retiree healthcare costs, commonly referred to as “OPEB”) for state officers and employees will be combined and entered immediately following "Net Totals, Salaries and Wages" in the "Expenditures by Category." The item will be entitled "Staff Benefits" and will show the total contributions by year. Estimates will be prepared in accordance with instructions issued by the Department of Finance such as Budget Letters. For the past year, the amount of actual contributions may be taken from the appropriate allotment expenditure account.

1. The Public Employees' Retirement component includes all state contributions for state employees covered under the Public Employees' Retirement System (Government  Code Sections 20000 through 21703).
2. The Old Age and Survivors' Insurance data include all state contributions for state employees covered under the Federal System (Government Code Sections 22000 through 22603).
3. The State Employees' Health Benefits component includes all state contributions for state employees enrolled under any approved health benefit plan (Government Code Sections 22750 through 22944.5). Costs of payments for health and welfare for nonpermanent, prevailing rate employees as authorized by Government Code Section 19830 will be applied as operating expenses.
4. Workers’ Compensation for state officers and employees is budgeted as an item of Staff Benefits.

   State entities that carry Workers’ Compensation policies with the State Compensation Insurance Fund will not budget additional funds for Workers’ Compensation benefits. They will continue to budget funds for payments of premiums that will be included as a part of Staff Benefits.

   Because of the nature of this type of expense, some agencies may have to rely upon certain subjective factors in computing requirements. Departments should prepare estimates taking into consideration all pertinent factors, particularly those which might result in a difference in cost from that experienced in past years. Accident and injury experience loss rates, changes in working conditions affecting risk exposure, changes in number of employees and salary rates are examples of areas that can fluctuate yearly.

5. Other Post-Employment Benefits includes all state prefunding contributions for state employees covered under the Public Employees’ Medical and Hospital Care Act (Government Code Sections 22750 through 22944.5) for postretirement health benefits and the State Employees’ Dental Care Act (Government Code Sections 22950 through 22959) for postretirement dental care benefits.

If a department is proposing additional funding for staff benefits, a BCP must be submitted to Finance. Any BCP must meet the guidelines and policy provided by Finance through Budget Letters or other notification process. If no variation is expected, the following method may be used in computing Workers' Compensation Insurance expense:

1. Determine total Workers' Compensation Insurance expenses for departmental employees for each of the past three years. This information is available from the Compensation Insurance Fund.
2. Determine total salaries and wages paid to departmental employees for each of the past three years excluding staff benefits.
3. Divide the total expenses for three years by total salary and wages for three years to determine the ratio of Workers' Compensation Insurance expenses to salaries and wages. Apply this ratio to the total salaries and wages estimated to be required for the budget and current years to determine the amount required.