Non-Salary and Deferred Compensation Policy and Procedures

The UNC Board of Governors requires each campus of the University of North Carolina to develop a policy on deferred compensation and non-salary compensation. This policy establishes guidelines and procedures for deferred compensation and non-salary compensation at UNC-Chapel Hill.

UNC General Administration Policy Number 300.2.14 is the basis for this campus policy.

This policy applies to most employees of The University of North Carolina at Chapel Hill holding positions exempt from the State Personnel Act (EPA). Exempt from this policy are the Athletic Director and Head Coaches in Athletics (subject to Board of Governors Policy 1100.3 and its guidelines) and members of faculty medical practice plans (e.g., physicians and dentists). Board of Governor's Policy 300.2.14 addresses separately non-salary and deferred compensation for the Chancellor.

"Non-salary compensation" - items of monetary value other than base salary, salary supplements, salary stipends, employee awards, and other cash compensation for the purpose of attracting or retaining faculty and staff of the highest possible quality. Non-salary compensation includes but is not limited to a vehicle or vehicle allowance, provision of housing or a housing allowance, club memberships in the name of the employee, and other special campus benefits provided for job-related reasons.

"Deferred Compensation" - deferred (or delayed) compensation (or salary) which is broadly defined to include, but not be limited to, any employer payment or contribution paid directly to an employee, to the employee's account or plan, or to a person acting in a capacity similar to a trustee for the employee, which is paid later than the regular or next subsequent payment cycle, except for an error that is promptly corrected upon discovery. Delayed compensation also includes any retirement plans or accounts, annuities, life insurance that accumulates any cash value, and traditional 457 deferred compensation plans. This definition includes both tax qualified and non-qualified plans, and any other similar form of payment, whether tax sheltered or not.

A. Purpose and Criteria for Awarding

The awarding of non-salary compensation may be based on any reason or reasons considered relevant to attracting or retaining a faculty and staff of the highest possible quality. Decisions concerning on-salary compensation shall not be based in whole or in part upon discriminatory factors of the employee's race, color, national origin, sex, age, religion, creed, disability, or veteran status.

B. Excluded Items

Provision of housing, when occupancy of the housing is required as a part of the job, reimbursement of professional- or work-related travel, and the provision of equipment to perform the work of the position, even if used at home, are all permissible and are not considered "non-salary compensation" as used in this Policy. Such equipment includes but is not limited to: computers, cellular phones, personal data assistants (PDAs), internet connectivity (e.g., cable modem, DSL), pagers and similar work related items.
 
C. Approval Requirements

Upon the advice of the Executive Vice Chancellor and Provost or the appropriate Vice Chancellor and submission of the appropriate documentation as required under this policy, the Chancellor shall consider requests for non-salary compensation of any EPA employee covered by this policy. If endorsed by the Chancellor, such compensation must be subsequently approved by the UNC-Chapel Hill Board of Trustees before the employee is eligible to receive the requested non-salary compensation.

D. Moving Expenses Paid as Part of the Hiring Process

The Faculty and EPA non-faculty hiring approval process may include payment of moving expenses in accordance with authority from the Office of State Budget & Management (OSBM).  The decision of whether to include payment of moving expenses may be authorized by the appropriately authorized University officials without the approval of the Chancellor or Board of Trustees.

E. Source of Funds and Reporting of Compensation

Unless permitted by the Office of State Budget & Management and approved by the Board of Trustees, State funds shall not be used to provide non-salary compensation. Non-salary compensation funding may be provided directly by a University-associated foundation, if permitted by foundation policy. [Note: University policy does not however permit the payment of salaries from University-associated foundations, only non-salary compensation as provided under this policy.]

F. Other Provisions

Any club membership for an employee or the granting of special campus services or benefits must be job related, and the club must have a policy prohibiting discrimination against groups protected by federal and North Carolina law. Non-salary compensation for any employee must be reported appropriately to federal and state tax agencies.

The State of North Carolina and the University of North Carolina offer employees options for deferred compensation, including insurance programs. Unless expressly approved by the Board of Governors, UNC-Chapel Hill may not provide any other employer-paid or privately-paid options for deferred compensation to its employees.

A. Non-Salary Compensation Approvals

Any proposed non-salary compensation must be documented using the "Request for Approval of Non-Salary Compensation" form. The approval process for such compensation must be fully completed prior to the provision of non-salary compensation to an employee. Requests from units reporting to the Executive Vice Chancellor and Provost shall be routed through the Senior Associate Provost for Finance and Academic Personnel. Requests from units with other reporting relationships shall be routed through the appropriate Vice Chancellor to the Associate Vice Chancellor for Human Resources. All requests must receive the Chancellor's endorsement prior to being forwarded to the Board of Trustees for approval.

B. Deferred Compensation Approvals

Any requests for deferred compensation must be made by memorandum by the appropriate Dean or Division Head to the Executive Vice Chancellor and Provost and by other units by the appropriate Vice Chancellor to the Chancellor. Such requests which receive the endorsement of the Chancellor must then receive approvals from both the Board of Trustees and the Board of Governors prior to the commitment or provision of such compensation.

This policy was approved by Dr. Harold L. Martin, Sr., Senior Vice President for Academic Affairs, UNC General Administration on March 12, 2007 and the The University of North Carolina at Chapel Hill Board of Trustees on May 24, 2007.

This policy is effective May 25, 2007

Revision History:

Initial Publication - October 11, 2007