Assignment

Assignment

Payroll forecast

The California Public Employee's Retirement System (CalPERS), is an agency which is in the California's executive branch. CalPERS is responsible for managing pension and health benefits of individuals residing in California. CalPERS have to look after 1.6 million employees, their families and retired in the state of California. According to the report which has been published, the total assets that CalPERS manages are $257.4billion (CalPERS, 2013). CalPERS is also known as the shareholder activism, and there is a possibility that the stocks placed by CalPERS may perform better than other stocks in any financial year, making it a good and safe investment. If there is an increase in the pay of the employees which are working for CalPERS, CalPERS may experience some good as well as some bad impacts on its well being as an agency. The immediate impact of the increase in the pay would be that the amount that CalPERS will be giving to its individuals as salaries will increase; this as a result would mean expenditure will increase. This would mean that CalPERS would not be able to allocate resources to other tasks. The chart below depicts the average annual salary which CalPERS pays to its employees. As highlighted below, a 2% increase in Salary would mean the salary rising to $62269, a 4% increase would mean the salary rising to $63490 and a 5% increase would mean $78267. This would highly dampen the cost structure of CalPERS as it employs a large amount of human resource (CalPERS, 2013).



 

2% Pay increase

 

4% Pay increase

 

 

5% Pay increase

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Annual salary (A)

(A)

enter an amount

$ 60,205

 

enter an amount

$ 60,205

 

enter an amount

$ 60,205

 

 

 

 

 

 

 

Enterprise Bargaining Increase Estimate

(B)

2.0%

1,204

 

4.0%

2,408

5.0%

3,010

 

 

Annual Leave Loading

(C)

1.4%

860

 

1.4%

877

 

 

 

 

 

[calculated on 'Current Annual Salary' plus 'EB Increase']

 

 

 

 

 

 

 

 

Casual Loading

 

 

 

 

 

25.0%

15,051

 

 

Non-Superannuable Loadings

0.0%

-

 

0.0%

-

0.0%

-

 

 

Superannuable Loadings

0.0%

-

 

0.0%

-

0.0%

-

 

 

EB impact on Loadings (change to 0% if not applicable)

2.0%

-

 

4.0%

-

5.0%

-

 

 

Other Fixed Values

$ - - $ - - $ - -

 

 

[all based on 'Current Annual Salary']

 

 

 

 

Estimated Annual Salary

62,269 63,490 78,267

 

 

 

 

 

 

Oncosts

 

 

 

 

 

Long Service Leave Provision

(D)

3.5%

1,984

 

3.5%

2,023

 

0.0%

-

 

 

[calculated on 'Estimated Annual Salary' less 'Annual Leave Loading']

 

 

 

 

 

 

 

 

Superannuation

(E)

9.25%

5,680

 

17.0%

10,644

 

9.25%

7,240

 

 

[calculated on 'Estimated Annual Salary' less 'Annual Leave Loading' less 'Non-Superannuable Loadings']

 

 

 

 

 

 

 

 

Payroll Tax

(F)

4.95%

3,363

 

4.95%

3,670

 

4.95%

4,233

 

 

[calculated on 'Estimated Annual Salary' plus 'Superannuation']

 

 

 

 

 

 

 

 

Workers Compensation

(G)

0.5%

311

 

0.5%

317

 

0.5%

391

 

 

[calculated on 'Estimated Annual Salary']

 

 

 

 

 

 

 

 

Total Oncosts

11,339 16,654 11,864

 

 

 

 

 

 

 

 

TOTAL ESTIMATED SALARY & ONCOSTS

$ 73,608 $ 80,144 $ 90,130

 

 

 

Quick Total Cost calculation : Where no additional Loadings, use :

= [A + B] + 19.7%

 

 

 

= [A + B] + 27.7%

 

 

= [A + B + D] + 14.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 



The graphical chart below outlines the effect on costs and salaries for the rise in different percentages.

The benefits that can reaped from this rise in pay to the employees is that, now CalPERS would have a bigger ...