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Old 06-19-2014, 02:33 PM
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Default Payroll growth v.s. Salary Increase

Can anyone tell me the difference between payroll growth, and salary increase rate, salary scale, and merit rate? Thanks,
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Old 06-19-2014, 03:37 PM
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Payroll growth usually includes replacements for decrements. It could even include population growth, depending on what you're doing. The other stuff applies to individuals rather than the group. There are COLA increases that apply to the whole salary scale, there are merit increases when people gain experience but stay in the same position, and there are promotion increases when people move to higher paying positions.
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Old 06-19-2014, 03:59 PM
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What Runner said, plus the following distinction:

Assumed salary increases is an economic actuarial assumption used to calculate the plan's accrued liability and normal cost. Payroll growth is not. The payroll growth assumption is used to calculation of the amortization of the UAAL as a level percent of (assumed increasing) payroll, when used with an immediate gain method such as EAN or PUC.
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Old 06-19-2014, 04:12 PM
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I guess COLA was the wrong word. I meant overall salary inflation which includes price inflation and productivity increases.
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Old 06-22-2014, 07:16 PM
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Crystal clear! Thanks for both of you!
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