Employee Educational Benefit (EEB) Program

EEB Background Staff Council has been requesting enhanced benefitsStaff Council has been requesting enhanced benefits UTSA’s current program costs $285,000 / yearUTSA’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 employeesChanging from a 127 Qualified Educational Assistance Plan to a 177(d) Qualified Tuition Reduction Plan will allow us to double the benefit to employees Staff Council has been requesting enhanced benefitsStaff Council has been requesting enhanced benefits UTSA’s current program costs $285,000 / yearUTSA’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 employeesChanging 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 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.Under the proposed plan, as an educational institution, UTSA may waive designated tuition and fees to employees. Allows the benefit to be doubledAllows the benefit to be doubled Change to coincide with Fall 2012 registration which begins April 1stChange to coincide with Fall 2012 registration which begins April 1st Under the current IRS plan, UTSA is paying itself for employee participation.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.Under the proposed plan, as an educational institution, UTSA may waive designated tuition and fees to employees. Allows the benefit to be doubledAllows the benefit to be doubled Change to coincide with Fall 2012 registration which begins April 1stChange to coincide with Fall 2012 registration which begins April 1st

FY 11 EEB Participation Unduplicated Headcount Average SCH / Student / Semester UTSA Paid SCHUnpaid SCH UG GR DOC TOTAL

Program Comparison Program Feature Current EEBProposed EEB Credit hours per academic year Up to 6 SCHUp 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 EligibilityBenefits 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 BenefitIRS excludes the first $5,250Graduate tuition must be reported as taxable income

Tax Implications 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 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