The federal income tax is a pay-as-you-go tax. This means the tax must be paid as income is earned or received during the year. As a wage earner at Old Dominion University, federal income tax must be paid by having it withheld from one's pay during the year. The withholding is based on the number of allowances claimed when Form W-4, Employee's Withholding Allowance Certificate, and Form VA-4, Employee's Virginia Income Tax Withholding Exemption Certificate, are filed with the university Payroll Office.

           If the number of withholding allowances an individual is entitled to claim through payroll deductions decreases to fewer than the number claimed on their current Form W-4 or Form VA-4, a new W-4 or VA-4 must be filed within 10 days.

           All income is subject to withholding for federal and state taxes with the exception of certain special classes as indicated in the Internal Revenue Service Employer's Tax Guide and Employer's Supplemental Tax Guide. Additionally, the Tax Reform Act of 1986 imposed a penalty for underpayment of tax liability beginning in calendar year 1987. Employees must pay (either through withholding or estimated tax payments) 90% of their current year tax liability to avoid penalties.

The contribution rate for employees is 7.65 percent subject to the maximum taxable earnings. For faculty earning in excess of the maximum taxable earnings, 1.45 percent is contributed for Medicare hospital insurance. Each covered employee, regardless of age, must contribute.

The university Department of Human Resources is responsible for the benefits enrollment and counseling of faculty. The wide range of employer-paid and optional benefits programs is discussed below. Current benefits program information is available on the Human Resources section of the university's web page.

           Faculty who have been eligible for benefit programs and who terminate their service to the university may continue some of their benefits. The faculty member should arrange an exit interview with the university benefits manager to discuss benefits continuation. This interview should occur during the final month of the faculty member's contract.

Full-time teaching, administrative and professional faculty on one-year appointments are eligible to participate in the Virginia Retirement System (VRS). Part-time salaried teaching, administrative and professional faculty on one-year appointments in positions approved for minimum of 0.5 FTE “time and effort” are eligible to participate in the Virginia Retirement System.

           In addition to the federal Social Security program, the state provides a retirement plan to each eligible employee. The contribution to this program is paid by the university. The Virginia Retirement System is a defined benefit plan with a five-year vesting period. Additional information is available from the university Department of Human Resources or from the Virginia Retirement System.

           Upon service retirement, several options for retirement benefits are available at the discretion of the employee. Additional information is available from the university Department of Human Resources or from the Virginia Retirement System.

Full-time teaching, administrative and professional faculty appointed for at least one year may elect to participate in the optional retirement plans instead of the Virginia Retirement System. Optional Retirement Plans are defined contribution plans. New faculty members must decide within 60 days which retirement plan they will join. Regardless of the retirement plan, Optional Retirement Plan members must also participate in the group life insurance program provided by the Virginia Retirement System. Part-time salaried teaching, administrative and professional faculty on one-year appointments in positions approved for minimum of 0.5 FTE “time and effort” are eligible to participate in the Optional Retirement Plan.

New faculty who are appointed full time for one year are automatically enrolled in the group life insurance program. Premiums are paid by the university. The amount of life insurance (natural death benefits) is equal to the amount of annual salary rounded up to the next higher thousand, and then doubled. An amount equal to four times salary is payable in the event of accidental death. Coverage is also provided for accidental dismemberment.

           Part-time salaried teaching, administrative and professional faculty on one-year appointments in positions approved for minimum of 0.5 FTE “time and effort” are eligible to participate in the Virginia Retirement System Group Life Insurance Program.

           If group life insurance coverage exceeds $50,000 for natural death, the premiums paid by the university will be considered as income for federal, state and FICA tax purposes.

Full-time teaching, administrative and professional faculty appointed for one year are eligible for health insurance benefits. Health insurance is provided under the Commonwealth of Virginia Group Health Care Plans. New faculty enrollment or transfer of existing coverage must be arranged through the university Department of Human Resources. New faculty applications for participation must be completed and received by Human Resources within 31 days of the employment contract begin date.

           The state offers Commonwealth of Virginia Care (COVA Care) as the statewide plan which provides an expanded network of Blue Cross Providers worldwide and in all 50 states. COVA Care is a basic plan with additional coverage options available. There is one regional plan, Kaiser Permanente, which is an HMO and is available in the Northern Virginia area. Detailed information is available in Member Handbooks and from the Department of Human Resources.

Faculty enrolled in a health care plan and paying a monthly premium are enrolled in the Pre-tax Program. This program is based on Section 125 of the Internal Revenue Code which permits employees to pre-tax their portion of the health care premium. The health care premium is deducted from gross pay before taxes are calculated.

Another option to consider for pre-tax deductions is participation in flexible spending accounts. Two flexible spending accounts are available: medical reimbursement and dependent care reimbursement. New faculty may enroll in dependent care reimbursement within 31 days of employment. Contact the Department of Human Resources for enrollment information.

Returning faculty members on the 10-month/20-pay cycle must maintain continuous health insurance coverage through the summer months (June and July) to avoid any break in coverage. Premiums must be paid according to the University Payroll Office procedures, which typically involve deducting the payments from the May paydays. Nonreturning faculty members' coverage expires July 31. Faculty who are separating or retiring should contact the university Benefits Manager for information regarding conversion or change of status coverage.

Old Dominion University offers faculty the opportunity to participate in a voluntary tax sheltered annuity (TSA) program. TSAs offer a tax effective way to invest a portion of income through payroll deduction, and these savings can accumulate to substantial sums through the years. The maximum annual amount faculty may contribute to a TSA is determined by age. Because TSAs are tax advantaged, they have maximum contribution limits and IRS pre-retirement withdrawal penalties. Contact the university Benefits Manager for information on the companies authorized to offer tax sheltered annuities and enrollment information.

All state employees are eligible to participate in the Deferred Compensation Plan administered by the Virginia Retirement System. The plan enables participants to take advantage of federal and state tax breaks and supplement retirement income.

           If hired or rehired in a salaried state position effective on or after January 1, 2008, participation in the Commonwealth of Virginia 457 Deferred Compensation Plan is automatic, unless the employee enrolls in and contributes to a 403(b) tax sheltered annuity. If new employees do not wish to participate in the 457 Plan, notification must be made to opt out within 90 days of receiving a PIN from Great-West, the Commonwealth of Virginia’s DCP program administrator. Please contact the university Benefits Manager for more information.

The Employer Cash Match Program is a 401(a) defined contribution plan. Full-time faculty enrolled in a TSA or the Deferred Compensation Plan may be eligible to receive a university contribution to a cash match account. Contact the university Benefits Manager for information.

The Virginia Retirement System offers additional life insurance coverage on insured full-time faculty and their spouse or children. New faculty have 31 days from their contract begin date to apply for VRS optional life insurance. Other companies also offer additional life insurance. Premiums can be payroll deducted.

This type of insurance provides faculty with short-term disability payments for up to one year. It provides additional income for any off-the-job accident, at-home illness, hospitalization or cancer therapy. This coverage provides income regardless of any other type of medical coverage faculty may have selected, and all plans offer employee only and/or family coverage. Contact the university Benefits Manager for provider information.

Full-time faculty may elect to enroll in the long-term disability insurance program. Enrollment must be selected within 31 days of the contract begin date. Benefits are payable to a member after 180 days of disability with payments of 60 percent of monthly salary, not to exceed $5,000 monthly, beginning with the seventh month of disability. Annual premium payments are paid by payroll deductions concurrent with the normal teaching faculty contract schedule. Effective coverage continues through the summer months if the faculty contract is renewed.

Personal accident insurance covers accidental death and dismemberment in principal values from $25,000 to $150,000 in $25,000 increments. Faculty spouses and dependent children may also be covered for a proportionate increase in premium. Payroll deductions are made concurrent with the normal teaching faculty contract schedule.

Long-term care insurance is offered to full-time faculty, their spouses, parents, and parents-in-law. Faculty enrolling within 31 days of their contract begin date do not have to complete a health care questionnaire. Long-term care is the care needed to assist someone with day-to-day functions such as dressing, eating, and transferring due to medial problems caused by illness or injury. Coverage includes nursing home care as well as in-home services. Contact the university Benefits Manager for provider and enrollment information.

Faculty may choose to participate in a prepaid legal program available through local law firms. Group rates are available and the plan covers legal matters such as simple will preparation, real estate transactions, traffic violations and civil matters. Election to participate must be made within 31 days of the contract begin date.

The enrollment forms that faculty complete for Virginia Retirement System group life insurance coverage and optional benefits programs typically require the designation of a beneficiary. It is important to keep beneficiary information current in case living situations change due to divorce, death, or marriage.

The university provides no insurance on personal effects of its employees unless the personal property is specifically included in the employment agreement.

           Any faculty member who wishes such coverage should investigate the addition of a "scheduled personal property endorsement" to his or her homeowner's policy for specific coverage on property kept at the university. In some cases a special "personal articles" floater policy may be preferred in place of an endorsement.

The Commonwealth of Virginia is currently protected under a self-insurance program to provide liability coverage to all agencies as set forth in Section 2.1-191.11 of the Code of Virginia.