Beginning fiscal year 2024/25, the campus transitioned to a new compensation inflation model aiming to provide a simplified and more sustainable way of managing compensation costs. This article provides a comparison of the new and old processes, and details included and excluded salary actions.
Compensation Inflation: Also known as Compensation Adjustments, this includes adjustments to staff and faculty salaries and benefits. These are applied as weighted average increases for both salary and benefits resources budgets and calculated for each relevant Financial Unit by the Campus Budget Office (CBO).
Salary Actions: Any change or adjustment made to an employee's base salary, including increases, decreases, or other modifications to their compensation.
Target Budget: A concept used prior to the FY26 planning cycle, this refers to a beginning reference point for developing the next year’s core recurring budget. It included the current year final core recurring budget, plus pushed commitments entered in the Resource Commitment Tracking Tool (RCTT) through Q2, and current year compensation adjustments as well as planned inflationary increases for the budget year. The Target Budget is no longer used, but referenced for historical context in this KBA.
EPBCS: Stands for Enterprise Planning & Budgeting Cloud Service. It is used interchangeably/as shorthand for Oracle Planning and Budgeting in this training and in any budget process documentation.
Core Funds: Category of funds that is used to support direct costs associated with instruction, research and public service efforts. Core funds include State and UC General Funds, Student Fee Funds (Tuition, Student Services Fees, Professional Degree Supplemental Tuition, Non-Resident Supplemental Tuition), Indirect Cost Recovery Funds, Investment Income, Patent Income, ASSA, Gift Fees/Endowment Cost Recovery; now more commonly known as SOFI Funds which represent approximately 99% of core fund spending on campus i.e., most, but not all, core funds are part of SOFI
An estimated compensation inflation factor was layered into the EPBCS Target budget. The inflation rate was based on the type of Financial Unit (academic vs. administrative) and provided a figure for planning purposes only. Prior to funds being allocated to the General Ledger, the estimated compensation increment was backed out of the department budget and later replaced with an allocation based on actual salary increases at the detailed employee level (eligible recurring FTE on Core Funds). Downsides of this process included:
The campus has transitioned away from employee-level salary allocations. Inflation rates are still calculated at the Financial Unit level but factor the mix of position types (Faculty vs. Staff), union representation (Represented vs. Policy Covered) and approved salary and benefit cost increases. The calculated inflation rates are then applied against the salary and benefit budgets in EPBCS, providing funding for core recurring filled and vacant FTE. The calculated inflation allocation will remain a component of the EPBCS budget allocated to the General Ledger, there will be no “back-out” or +/- adjustment based on actual employee level increases. Because of the variable nature of Faculty Merits and Promotions, these increases will continue to be allocated on a person-by-person basis after the salary actions have been implemented in UCPath.
Q: What salary actions are included?
A: Approved system-wide salary program increases, including Policy Covered and Represented staff merit and step increases, range adjustments, and across-the-board increases; Faculty range adjustments and merit and promotion increases
Q: What salary actions are excluded?
A: Locally approved staff equity increases, reclassifications, staff promotions, and one-time special awards and lump sum payments