THE CALIFORNIA STATE UNIVERSITY
OFFICE OF THE CHANCELLOR
400 Golden Shore Drive
Long Beach, California 90802-4275
(310) 951-4610

Code:  AD 95-03

Date: February 9, 1995
 RESPOND BY MARCH 15, 1995

To:  Vice Presidents for Administration


From: George A. Pardon
       Accounting Director
       Business and Finance

Subject:1993/94 Early Retirement Program
The purpose of this memo is to provide the instructions for computing 
annuity costs and estimated savings, together with a listing of eligible 
participants, for the 1993/94 Early Retirement Program.  This program 
provided two years of additional service credit for CSU employees who 
retired during the periods December 1, 1993 through January 29, 1994 or 
June 15 through August 13, 1994.  Coded memo BF 95-05 provided a status 
report of the program to the campus presidents.

The attached PIMS printout was the data source used in preparing the 
overview of the program included in BF 95-05.  Although most campuses 
have already estimated annuity costs on the basis of actual requirements, 
the printout will assist those who have not made this calculation and 
provide supporting background for others.

In an effort to minimize the use of paper, new forms for calculating 
annuity cost, savings, etc. have not been prepared.  You are asked to use 
the forms and instructions provided for the 1991 program.  The specific 
forms and instructions to be used were provided as Attachments A and C 
to BP 91-27 and BP 91-32.  Attachment A will include a listing of retirees, 
by fund and employee group, with estimates of resultant savings.  
Attachment C provides for the calculation of estimated annuity cost,  by 
fund and employee group.  If you need a copy of BP 91-27 and BP 91-32, 
please call Mr. Howard Hicks in this office.

Initial instructions for completion of the two forms were provided as 
attachments to BP 91-27.  Revisions and corrections to the initial 
instructions are included in BP 91-32.  Staff benefit rates for 1994/95 (B 94-
15, Attachment D) should be used in estimating savings.

The instructions for the 1991 program included references to MSA cost, 
projected hiring dates and salary rates of replacements.  These instructions 
should be ignored since MSA is not an issue and the period of vacancy and 
replacement hiring rates will be determined by each campus.

The PERS annuity percentages included in the instructions for 
Attachment C (BP 91-27) have not changed and should be used in 
calculating annuity costs for the current program.

As stated in BF 95-05, estimates of savings from positions vacated by 
retirement are for information only and will not be used as the basis for 
deallocation of funds.  However, a deallocation of 25% of estimated 
annuity costs will be implemented by this office on April l to provide a 
minimum payment to PERS by June 30 of each fiscal year.  Campuses may 
deallocate additional funds at any time of up to 90 percent of estimated 
annuity costs.  All funding will be provided from the General Fund.

Please bear in mind that unpaid annuity costs accrue interest charges 
computed at the PERS employer reserve crediting rate in effect at the 
beginning of each fiscal year.  The rate for the 1993/94 fiscal year was 5.93%.  
For the 1994/95 fiscal year, it is 5.56%.  Payment of these interest charges 
will be the responsibility of each campus.

The forms referred to above (Attachments A and C) should be prepared 
and submitted so as to reach this office no later than March 15, 1995.  

If you have any questions regarding this memo or need a copy of the prior 
year BP letters, please call Mr. Howard Hicks at (310) 985-2730.

GAP:HSH:df:AD95-03-93/94 Early Retire
Attachments

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