Version 1.0: December 4, 2014
Calculating FTE Annual Salary Rate for OTRFT Members
Background
This document is intended to provide some examples for calculating FTE Annual Salary Rates for OTRFT
members. FTE Annual Salary Rates for OTRFT are generally only required when requesting OTRFT Open
Buyback quotes.
The FTE Annual Salary Rate for an OTRFT member is required to cost buybacks because the pension benefit
that OTRFT members earn in the Plan is based on their actual pensionable service accrued and their highest
average pensionable earnings (or HAPE), which is calculated from annualized earnings.
For example, if an OTRFT member works 50% of full-time and earns $30,000 every year their ultimate pension
benefit would be based on a HAPE of $60,000, not $30,000. Thus, when we cost a buyback for an OTRFT
member, we base the cost on their annual salary rate as of the effective date of the buyback quote.
Using a salary rate of $30,000 to cost a buyback for this member would understate the cost of the buyback
service because it wouldn’t accurately reflect the benefit that would be earned for the additional service.
Where the OTRFT employee’s position is one that can be equated to a full-time position, the FTE Annual
Salary Rate is the salary that a full-time employee doing the same job would earn. If it is not possible to
equate the OTRFT position to a FT position and use the salary rate of the FT employee, the FTE Annual
Salary Rate must be computed.
We understand that there may be situations where it is difficult to calculate the full-time equivalent salary rate
for an OTRFT member, such as when their future contract status is unknown or if they work part-time in
multiple roles. In these cases we ask that the employer make a “best estimate” of the OTRFT member’s FTE
Annual Salary Rate to cost an OTRFT Open Buyback.
Following are some examples of calculating OTRFT Annual Salary Rates for various types of OTRFT
employees.
If you encounter other scenarios that are not covered by these examples, please let the Plan know so we can
assist and add more scenarios to this document.
Example 1 – OTRFT Administration member
The conversion of an hourly pay rate to a Full-Time Equivalent Annual Salary Rate for an OTRFT
Administration member is simply a matter of multiplying the hourly pay rate by the FTE hours.
For example, consider an OTRFT Administration member earning $39.32 per hour:
1. For OTRFT Administration, the FTE hours are 7.5 hours per day
2. For a 261-workday year, like 2012-2016, the annual FTE hours are 1957.5
3. FTE Annual Salary Rate:
= $39.32 x 1957.5 = $76,968.90
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Calculating FTE Annual Salary Rate for OTRFT Members
Example 2 – OTRFT Faculty member with Teaching Contact Hours (TCH) only
For OTRFT Faculty paid on a per-teaching-hour basis, convert the hourly rate per TCH to an annual rate using
the 2.17 TCH factor and 1892 FTE hours for the Academic – Professor job group.
For example, consider an OTRFT Faculty member earning $97.65 per TCH:
1. Convert hourly TCH rate to an equivalent hourly rate using 2.17 factor:
= $97.65 / 2.17 = $45.00
2. Faculty (Academic – Professor) job group, FTE hours = 1892 (44 hours/weeks x 43 weeks) regardless
of the number of workdays in the calendar year
3. FTE Annual Salary Rate:
= $45.00 x 1892 = $85,140
Example 3 – OTRFT Faculty member with Teaching Contact Hours (TCH) and non-TCH hours
Where an OTRFT Faculty paid on a per-teaching-hour basis also performs other job functions that are paid on
an hourly basis (e.g. attending meetings, curriculum development, etc.), and the relative number of TCH and
non-TCH hours are known at the time the buyback quote is submitted, these can be combined.
For example, consider an OTRFT Faculty member earning $97.65 per TCH who teaches 100 hours per year,
and who also earns $53.00 per hour for non-TCH hours which amount to 25 hours in the year.
To calculate the FTE Annual Salary Rate in this case, calculate the member’s total earnings and total
equivalent hours – applying the 2.17 factor to TCH only, not non-TCH – and then calculate the combined
annual rate.
1. Total Earnings:
= $97.65 per TCH x 100 TCH hours + $53.00 per non-TCH x 25 non-TCH hours = $11,090
2. Total equivalent hours:
= 100 TCH x 2.17 TCH factor + 25 non-TCH = 242 hours
3. Faculty (Academic – Professor) job group, FTE hours = 1892 (44 hours/weeks x 43 weeks) regardless
of the number of workdays in the calendar year
4. FTE Annual Salary Rate = [Total Earnings] / [Total equivalent hours] x FTE hours
= $11,090 / 242 x 1892 = $86,703.64
The Plan understands that this type of calculation may not always be possible, as the college may not know at
the time the request is made how many hours the OTRFT Faculty member will teach, or if or how many nonteaching hours they may have in the year.
As a best estimate, using the per-TCH hourly rate converted to an annual rate, as in Example 2 above, would
be appropriate.
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Calculating FTE Annual Salary Rate for OTRFT Members
Example 4 – OTRFT Support member working 2 positions with the same FTE hours
This example is taken from an actual member about whom one of the colleges inquired. The OTRFT member
in question was working 2 different positions with different hourly pay rates, but with the same regular workday
of 7 hours per day.
To calculate the FTE Annual Salary Rate the Plan instructed the college to blend the two pay rates based on
the hours worked in each position, to arrive at a weighted average of the FTE annual salary rates of the two
positions.
In this example, the employee works at one position earning $12.10/hour for 227 hours, and the other position
earning $21.01/hour for 272 hours.
1. Total Earnings:
= $12.10 x 227 + $21.01 x 272 = $8,461.42
2. Total hours:
= 227 + 272 = 499
3. Support (7 hours/day) job group, FTE hours:
= 7 x workdays in the year (261 in 2014-2016) = 1827
4. FTE Annual Salary Rate = [Total Earnings] / [Total hours] x FTE hours
= $8,461.42 / 499 x 1827 = $30,979.99
As noted in Example 3 above, the Plan understands that the member’s relative hours in each position may not
be known at the time the buyback quote request is made.
In this case, to calculate the best estimate FTE Annual Salary Rate, we request that the college make a best
estimate of the hours the employee might work in each job and follow through with the calculation steps above.
This would result in a best estimate of the blended FTE Annual Salary Rate of the employee’s multiple jobs.
Example 5 – OTRFT member working 2 positions with different FTE hours
Consider an OTRFT member working 2 different positions in different job groups, each having different FTE
hours. For example, an OTRFT employee working in a Faculty position at a rate of $85.93 per teaching
contact hour, and a Support position with a 7 hour/day regular workday, earning $23.78 per hour.
To calculate the overall FTE Annual Salary Rate, as in Example 4, the FTE annual salary rate in each position
should be blended based on the hours worked (or, if not known, a best estimate of the hours to be worked) in
each position in the year.
Since the FTE hours differ between the two positions, the overall FTE Annual Salary Rate cannot be calculated
in one step from the member’s total earnings and hours like in step 4 of example 4 above.
For example, if this employee were expected to have 350 TCH in the Faculty position, and 610 hours in the
Support position, the calculation would be:
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Calculating FTE Annual Salary Rate for OTRFT Members
1. Faculty position:
a. Earnings = $85.93 per TCH x 350 TCH = $30,075.50
b. Equivalent hours = 350 TCH x 2.17 TCH factor = 759.5
c. FTE annual rate for position = $30,075.50 / 759.5 x 1892 FTE hours = $74,921.46
2. Support position:
a. FTE annual rate for position = $23.78 per hour x 1827 FTE hours = $43,446.06
3. Total hours:
= 759.5 Faculty equivalent hours + 610 Support hours = 1369.5
4. FTE Annual Salary Rate: blend positions’ FTE rates on hours in each position
= [$74,921.46 x 759.5 + $43,446.06 x 610] / 1369.5 = $60,901.75
As noted above, the Plan understands that the member’s relative hours in each position may not be known at
the time the buyback quote request is made.
In this case, to calculate the best estimate FTE Annual Salary Rate, we request that the college make a best
estimate of the hours the employee might work in each job and follow through with the calculation steps above.
This would result in a best estimate of the blended FTE Annual Salary Rate of the employee’s multiple jobs.
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