Chapter VI. Faculty Benefits

(Updated with each edition of the FAQ book by the Center for Human Resources)

6.1.   Compensation

6.2.   Continuation / Conversion Privileges

6.3.   Credit Union

6.4.   Emeriti Retiree Health Plan

6.5.   Family and Medical Leave Act Policy (“FMLA Leave”)

6.6.   Flexible Spending Accounts

6.7.   Health and Welfare Plan

6.8.   Income Protection During Disability

6.9.   Jury Duty

6.10.  Medical Leave of Absence Policy

6.11   Pay Day

6.12.  Plan Amendment/Termination Procedures

6.13.  Relocation

6.14.  Retirement

6.15.  Social Security/Medicare

6.16.  Substance Abuse Program

6.17.  Tax-Deferred Annuity (TDA) Program

6.18.  Tuition Remission Policy and Exchange Policies

6.19.  Unemployment Compensation

6.20.  Worker’s Compensation Insurance

6.1 COMPENSATION

1. Faculty members are paid on the basis of a scale established by the dean and the
provost and approved by the president. The scale relates salary to academic rank.
Within each rank, salaries are further divided into three "steps." Minimal length of
service has been set for eligibility to advance in step or rank, but all promotions are
based on merit as defined by the Rank, Tenure, and Promotion Committee and the
administration. Special stipends for certain academic disciplines may be
recommended by a faculty committee and approved by the dean, provost, and
president.

2. Faculty contracts are prepared by the Dean's Office. Faculty members are normally
paid in twelve equal monthly installments unless specified otherwise and noted on the
employment contract. Checks are issued on the 26th of each month. If the 26th falls
on a Saturday, Sunday, or holiday, checks will be issued on the last business day
before the 26th. At the discretion of the administration, faculty members may receive
their checks earlier than the 26th during the month of December due to the Christmas
holidays and during certain other University holidays.

3. Paychecks may be picked up from the divisional offices. Faculty members who wish
to receive paychecks at home may do so by informing the Center for Human
Resources of their correct address. An automatic direct deposit of net pay is available
to regular monthly employees. Contact Payroll for a Payroll Deduction Authorization
and Agreement form if this option is wanted.

6.2. CONTINUATION/CONVERSION PRIVILEGES

1. Following termination of employment or loss of dependent status, continuation and/or
conversion options may be available. Contact the Center for Human Resources for
details.

2. Faculty members changing from full-time to part-time status should discuss benefits
implications with the Center for Human Resources.

6.3. CREDIT UNION

Pepperdine University faculty members are eligible to join the credit unions that are
available at the time of enrollment. The University will honor requests for credit union
deductions from faculty members’ paychecks upon receipt of written authorization.
Details of membership are available from the Center for Human Resources at (310) 506-
4397, or x4397.

6.4. EMERITI RETIREE HEALTH PLAN
(Included since 2006)

1. The Emeriti Retiree Health Plan provides the following benefits:

a. A tax-advantaged way to invest and accumulate assets exclusively to help meet
future retiree medical expenses — the Emeriti Health Accounts.

b. A specially-designed health insurance program building upon the foundation of
Medicare — the Emeriti Health Insurance Options.

c. An innovative tax-free way to pay for other qualified out-of-pocket medical
expenses — the Emeriti Reimbursement Benefit.

2. Participation in the University’s Emeriti Plan is mandatory for the faculty member
when he or she fulfills the eligibility and participation requirements outlined in the
summary plan description and the plan document. Once eligible, the University will
make contributions to the Emeriti Retiree Health plan accounts for the faculty
member. The faculty member may also make voluntary contributions to the accounts.

6.5. FAMILY AND MEDICAL LEAVE ACT POLICY (“FMLA LEAVE”)

1. INTRODUCTION

An eligible U.S. faculty member whose spouse, parent, or child has a serious health
condition which requires his or her care, or who is having, adopting, or beginning
foster care of a child, may apply for a family leave under the Family and Medical
Leave Act (FMLA Leave). An eligible faculty member who has a serious health
condition that prevents performance of his or her job functions may apply for a
medical leave of absence under the Family and Medical Leave Act (FMLA Leave).
When a leave is taken due to a serious health condition of the faculty member or an
eligible family member, the faculty member will be required to provide certification
from a qualifying health care provider with the leave request.

2. ELIGIBILITY

a. To qualify for a leave based on a serious health condition of the faculty member
or an eligible family member, the health condition must require inpatient care in a
hospital, hospice, or residential medical care facility; or continuing treatment or
continuing supervision by a health care provider.

b. In order to qualify for a family or medical leave, a faculty member must have at
least 12 months of employment with the University. In addition, the faculty
member must have worked at least 1,250 hours (an average of about 24 hours per
week) during the prior 12-month period.

c. Disabled faculty members who do not qualify under the FMLA leave are subject
to the Medical Leave of Absence Policy.

3. CONCURRENT LEAVES

The University shall designate all paid and/or unpaid leaves due to reasons that are
eligible under FMLA to run concurrently with, and be counted against, the faculty
member’s FMLA entitlement provided the employee qualifies for FMLA.

4. ADVANCE NOTICE OF LEAVE

a. Eligible faculty members may request up to a total of 12 workweeks of FMLA
Leave in any 12-month period. The 12-month period during which the 12
workweeks of FMLA Leave may be taken will commence on the first day of the
leave. Thus, the applicable 12-month period will be different for each faculty
member. Where additional medical leave is required, please see the Medical
Leave of Absence Policy. If additional family leave is required, request a personal
leave of absence.

b. In any case in which a husband and wife are both employed by the University,
their combined family leave for the care of a newborn or newly placed child may
not exceed 12 workweeks in any 12-month period.

c. Family leaves which are taken to care for a newborn or newly placed child must
be completed within 12 months of the child's arrival.

d. To the maximum extent permitted by law, any leave of absence that is granted
under this policy or any other policy for the purposes specified above, will be
credited against the time limits of the type of leave requested under this policy.

6. INTERMITTENT AND REDUCED LEAVE SCHEDULES

FMLA leave under this policy may be taken in one or more periods, which includes
taking leave on an intermittent or reduced leave schedule. All such periods of leave
will be applied to the total leave time available pursuant to this policy.

7. ELIGIBILITY FOR PAY

Generally, leaves taken pursuant to this policy are unpaid. However, a faculty
member is eligible for continuation pay for his or her own serious health condition, or
a family leave taken for the care of an eligible child with a serious health condition, a
newborn, a child placed for adoption, or for the care of an eligible family member
with a serious health condition pursuant to this policy.

8. EFFECT OF LEAVE ON BENEFITS

a. For the duration of a FMLA Leave, all of the faculty member's benefits including
benefits provided under the University’s Health & Welfare Plan and participation
in the Health Care Reimbursement Plan, may be maintained and continued at the
level, and under the conditions such benefits would have been provided if the
faculty member had continued in employment continuously for the duration of the
leave.

b. The faculty member who elects not to continue benefits provided under the Pre-
Tax Premium Cafeteria Plan, such as medical, dental and vision coverage, and
elects not to continue to participate in the Cafeteria, Health Care Reimbursement
Plan, can revoke his or her election as of any date during the FMLA Leave by
providing written notice to the Center for Human Resources not less than 14 days
after the effective date of such revocation. Such revocation shall be effective until
the conclusion of the faculty member’s FMLA Leave.

c. The faculty member may reelect a benefit plan available under the Pre-Tax
Premium Cafeteria Plan and participation in the Cafeteria, Health Care
Reimbursement Plan, upon return to active employment. The faculty member
must provide written notice of reelection of a benefit plan to the Center for
Human Resources not less than 14 days before the effective date of his or her
recommencement of benefits.

9. EXTENSION OF LEAVE

In the event a faculty member will not be able to return by the agreed-upon expiration
date of a leave, an extension may be requested. The request must be made on a leave
application. It must be accompanied by certification of the attending health care
provider of the serious health condition or the need for the faculty member's care of
an eligible family member. This request should be submitted as soon as the need to
extend the leave is known.

10. NOTICE OF RETURN FROM LEAVE

a. At the time a leave is requested, faculty members are required to indicate how
long the leave is expected to be. If the need for leave ends earlier than first
anticipated, the faculty member will be expected to return to work.

b. Faculty members must return to work no later than the first business day after the
expiration date of the leave. If a faculty member does not return at that time,
employment may be discontinued.

11. RETURN FROM LEAVE

a. Faculty members returning from medical leave are required to provide a
physician's certification that they are able to perform essential job functions.

b. Provided that the total FMLA Leave period does not exceed 12 work weeks
specified in this policy, the faculty member will, upon return to work, be restored
to his or her same position (when possible), or to an equivalent position with
equivalent pay, benefits, working conditions, and other terms and conditions of
employment. Eligibility for any benefits which ceased during the leave period will
be resumed immediately.

c. Faculty members who elect not to return from leave, or who do not return by the
leave expiration date, will be required to repay the University's cost of group
health plan coverage (medical including counseling services and dental) for the
period covered during the leave period. No repayment will be required, however,
if the faculty member is unable to return due to the continuation, recurrence, or
onset of a serious health condition of the faculty member or an eligible family
member, or other circumstances beyond the control of the faculty member.

d. As prescribed by law, the inability to return to work must be certified by the
attending health care provider.

12. CONFIRMATION OF LEAVE

At the time leave begins, the faculty member will be given a written statement of
leave provisions.

13. RESERVATION OF RIGHTS

The University reserves the right to refuse a request for FMLA Leave, or a request for
reinstatement to the same or an equivalent position, pursuant to, and as prescribed by,
all applicable state and federal statutes, regulations, and case law.

14. FURTHER INFORMATION

Questions on FMLA Leaves should be directed to the Center for Human Resources at
telephone extension 4397.

15. DEFINITIONS

a. Eligible Family Member: The spouse, child, or parent of the faculty member.

b. Spouse: A partner in legal marriage with the faculty member.

c. Child: A biological, adopted, or foster child, a stepchild, a legal ward, or a child
of a person standing in place of parents (in loco parentis). A child must be under
18 years of age, or 18 years of age or older and incapable of self-care because of a
mental or physical disability.

d. Parent: A biological, foster, or adoptive parent, a stepparent, a legal guardian, or
an individual who stood in place of parents (in loco parentis) to a faculty member
when the faculty member was a son or daughter.

e. Serious Health Condition: An illness, injury, impairment, or physical or mental
condition that involves inpatient care in a hospital, hospice, or residential medical
care facility; or continuing treatment or continuing supervision by a health care
provider.

f. Health Care Provider: Includes physicians (doctors of medicine [M.D.s],
osteopaths, podiatrists, dentists, clinical psychologists, optometrists, and
chiropractors (limited to treatment consisting of manual manipulation of the spine
to correct a sublimation as demonstrated by x-ray to exist) authorized to practice
in the state and performing within the scope of their practices as defined by state
law); nurse practitioners and nurse-midwives authorized by state law to practice
and who are performing within the regularly defined scope of their duties; and
Christian Science practitioners listed with the First Church of Christ, Scientist in
Boston.

g. Reduced Leave Schedule: A leave schedule that reduces the usual number of
hours per workweek, or hours per workday, of a faculty member.

h. Intermittent Leave: Required leaves of as short as one hour on a regular or
irregular basis to meet a medical need.

i. Group Health Plan: Any plan of, or contributed to by, the University (including
any self-insured plans) to provide health care (directly or otherwise) to faculty
members, former faculty members, or the families of such faculty members or
former faculty members, i.e., the University health, dental, and psychological
counseling plans.

j. Medical Leave of Absence: Approved time off for faculty members who are
unable to work due to personal illness or injury, and who do not apply, qualify
for, or elect to use a medical leave under the FMLA Leave.

k. Medical Leave under the Family and Medical Leave Act: Approved time off for
faculty members who apply and qualify for a medical leave under the FMLA
Leave.

6.6. FLEXIBLE SPENDING ACCOUNTS

The Tax Saver Option allows a faculty member to pay certain health care and dependent
care expenses with tax-free money (on a pre-tax basis). Faculty members may enroll
during their initial eligibility and need to re-enroll each calendar year to take advantage of
these savings.

6.7. HEALTH AND WELFARE PLAN

2. ORIENTATION

Newly eligible faculty members must attend a New Employee orientation that
includes a benefits enrollment held by the Center for Human Resources at Malibu.

3. ELIGIBILITY FOR BENEFITS

a. Faculty Members: All active, regularly assigned, full-time faculty members
employed under a regular (non-adjunct) faculty contract, serving in at least a halftime
appointment each academic year are eligible.

b. Dependents: Eligible faculty members may enroll family members in the PEPflex
plan as follows:

i. The faculty member's legally married spouse unless in active service in the
armed forces;

ii. The faculty member’s domestic partner legally registered with State of
California under AB205;

iii. Your children under age 26 are eligible for coverage. Your children include
your legally adopted children and children who are placed in your physical
custody for adoption. Your children also include each of your stepchildren,
and children for whom you or your spouse have been appointed legal guardian
by a court of law. Special rules apply for children with disabilities. Excluded
from coverage under the plan are adult children under age 26 if such child is
eligible to enroll in an employer-sponsored health plan other than the plan
offered by Pepperdine University.

c. Faculty Spouses: If the faculty member and faculty member's spouse both work
at Pepperdine University, each may be covered separately as employees or as a
single family unit. If a faculty member elects to be covered separately, eligible
children may be covered by only one employee. However, the vision care plan
allows all eligible family members to enroll as one family unit.

4. EFFECTIVE DATE OF COVERAGE

 Benefits coverage for new full-time faculty members will usually start on the first day
of the month coinciding with or next following the faculty member’s date of full-time
employment. If the faculty member is away from work due to illness or injury on the
day coverage would normally take effect, benefit choices will become effective on
the day the faculty member returns to active full-time work at Pepperdine University.

5. ENROLLMENT

a. All eligible faculty members must complete required enrollment forms and submit
them to the Center for Human Resources within 31 days of employment. New
faculty members who do not enroll in a medical or a dental plan within 31 days
(some plans allow up to 45 days) of their initial eligibility will be placed in a
Default Plan with single medical coverage and no dental coverage. Once a
medical or dental plan has been selected, a change to another plan may only be
made during the annual Open Enrollment period.

i. Qualified Family Status Change: Enrollment in a PEPflex plan is an annual
commitment. Unless one has a Qualified Family Status Change, no faculty
member may add or delete dependents until September 1 (the next Open
Enrollment period). Qualified Family Status Changes include:

• Marriage, divorce, legal separation or death of faculty member's spouse
• Birth, adoption (or placement), or death of faculty member's dependent
child
• Faculty member’s change in dependents status (dependent becomes
eligible to enroll in employer sponsored coverage, etc.)
• Faculty member’s spouse starts or stops working
• Faculty member’s spouse changes from part-time to full-time status or
vice versa
• Faculty member’s spouse takes an unpaid leave of absence
• Faculty member’s spouse loses or gains health coverage

ii. A written request to make plan changes must be submitted to the Center for
Human Resources within 30 days of the qualifying event.

b. Annual Re-Enrollment: During the Open Enrollment period each year, faculty
members may elect to change their medical and dental plans and add or delete
optional benefit choices from their benefits packages. At the Open Enrollment
period, faculty members may also add or delete dependent coverage. (Some
restrictions may apply.)

6. CORE BENEFITS

a. Core benefits include the following:

• Life Insurance
• Accidental Death and Dismemberment Insurance
• Business Travel Accident Insurance
• Long Term Disability Insurance
• Psychological Counseling Services
• Wellness Message
• Health Advocate Program

b. Newly eligible faculty members will automatically be enrolled for life insurance,
accidental death and dismemberment coverage, business travel accident
insurance, long term disability insurance, psychological counseling services and
Health Advocate program. The University will pay 100% of the premium for
core benefits.

7. OPTIONAL BENEFITS

a. Faculty members may elect optional coverage for:

• Dental Care
• Vision Care
• Optional Term Life Insurance
• MetLife Critical Illness Plan
• MetLaw Pre-paid Legal Plan
• Flexible Spending Accounts (covering non-reimbursed Health and Dependent
Care expenses)
• VPI Pet Insurance

b. The University will pay a substantial amount of the faculty member’s dependent
medical and faculty member and dependent dental coverage if selected.

8. Additional Benefits

Some benefits faculty members receive from Pepperdine University are not included
in the flexible benefits program. These benefits include Social Security and Medicare,
income protection during disability, tuition assistance, credit union membership, a
retirement plan, and a voluntary tax-deferred annuity program. Please refer to the
appropriate sections in this handbook describing these benefits.

6.8. INCOME PROTECTION DURING DISABILITY

1. The University provides income protection for faculty members during periods of
illness or disability. In order to comply with policies of the state and the insurance
carrier so that faculty members who are eligible may qualify for State Disability
Insurance or the disability terms of the University’s long-term disability insurance
contract, faculty members who have missed work for more than seven calendar days
because of illness or disability should notify the Office of the Dean and the Center for
Human Resources.

2. As a general rule, full salary will be continued up to a maximum of 180 days (less any
state disability payments for which the faculty member is eligible). After 180 days,
the long-term disability insurance plan pays 66.67 percent of the faculty member’s
base monthly salary up to a maximum benefit of $10,000 per month. Such benefits
may continue until social security normal retirement age as long as the faculty
member is disabled, or as specified in the insurance contract.

6.9. JURY DUTY
(Approved 9/16/04 by UMC; 9/17/04 by Steering)

1. The University considers jury duty to be an important civic responsibility. Having
loyal, conscientious, honest citizens serving on our juries is a basic and essential
element of our American system of justice. Therefore, it shall be the policy of this
University to encourage jury service by its faculty members when their duties to the
University permit.

2. Any employee called to serve will be excused to serve on jury duty, and for up to ten
(10) work days shall be paid at their regular base salary for such service. For an
employee serving on a jury in which the trial extends beyond ten (10) paid work days,
his/her absence will be excused until the trial is completed, even though the employee
will be paid a maximum of ten (10) work days.

6.10. MEDICAL LEAVE OF ABSENCE POLICY

1. A medical leave of absence is approved time off for faculty members who are unable
to work due to personal illness or injury and who do not qualify for, or have
exhausted their medical leave under the Family and Medical Leave Act Policy
(“FMLA Leave”).

2. As soon as a faculty member becomes aware that he or she is (or will become) for
any medical reason, temporarily disabled from working, the faculty member must
promptly advise the dean and the Center for Human Resources in writing of the
reason and the anticipated commencement date and duration of the disability. A
doctor’s certificate specifying the expected duration of the disability is required prior
to approval of a medical leave of absence.

3. Medical leaves of absence without pay are available to all faculty members for the
period of their disabilities, to a maximum of 12 months following the last day of
active work (see “Income Protection during Disability”). However, the University
may require periodic verification of a faculty member’s inability to work (including,
for example, a periodic statement from the faculty member’s doctor or examination
by a doctor designated by the University). A doctor’s release may be required prior to
return to work following an absence of three or more day’s duration. Any
misrepresentation of requested leave or disability will be grounds for discharge.
Faculty members who do not return at the end of their leaves of absence will be
deemed to have resigned. Faculty members who return to work at the end of their
leaves will be returned to their former positions if they are still available or as
prescribed by law.

4. The total medical leave under this policy is available for a maximum of 12 months
following the last day of work. If this policy is used in conjunction with a medical
leave of absence under the Family and Medical Leave Act Policy (“FMLA Leave”),
the total combined time may not exceed 12 months.

5. NOTE: This policy applies to all temporary medical disabilities, including pregnancy,
childbirth and related conditions. The University’s policy for pregnancy leave due to
actual disability is the same as its policy for all medical disability leaves.

6. University benefits under the Health & Welfare Plan and any voluntary employee
programs will be continued during a medical leave of absence, provided the employee
pays the required premiums. The benefits manager will contact the individual on
leave regarding payment of applicable premiums.

7. The faculty member should contact the Center for Human Resources for information
regarding California State Disability Insurance (SDI) benefits. Application may be
made at a local State Disability Office or by mail using a form available at the Center
for Human Resources or the doctor’s office.

6.11. PAY DAY

Faculty members are paid on a monthly basis. Checks will be mailed from the Payroll
Office to the faculty member’s designated address or bank on the 26th of each month.
Faculty members may contact the Payroll Office to set up direct deposit. If the 26th falls
on a Saturday, Sunday, or holiday, the salary check will be issued on the last business day
prior to the 26th.

6.12. PLAN AMENDMENT/TERMINATION PROCEDURES

1. The University reserves the right to change, suspend, amend, or end the benefits
program and the terms on which benefits, if any, will be available to its employees.
The vice president for finance and administration of the University is authorized to
amend, modify, or terminate the benefits program at any time and from time to time.
Any such amendment, modification, or termination will be made by a written
amendment executed by the vice president for finance and administration of the
University.

6.13. RELOCATION

1. The University will reimburse reasonable relocation expenses for new faculty
members as agreed to in writing within the following guidelines:

a. The University will reimburse faculty members for the moving of normal
household goods from one primary location (including washer, dryer, refrigerator,
freezer, garden and garage equipment), but will not reimburse for the moving of
automobiles, riding tractors, travel trailers, motor homes, ATV's, boats,
motorcycles, jet skis, snowmobiles, or animals.

b. The University will reimburse costs for the packing of breakables, such as dishes,
glassware, and lamps. It is expected that the employee will pack and unpack
clothes, kitchenware, and non-breakable items. Any rare or exceptionally
valuable items requiring special handling or packing and not otherwise
categorized as "normal household goods" will be the faculty member's
responsibility unless previously arranged with the appropriate dean or
chairperson.

c. The University will cover insurance (for full replacement value based on weight)
on normal household goods while in transit.

d. Mileage will be reimbursed for one automobile at the standard rate approved by
the IRS per mile for travel to Los Angeles using the most direct route. The
University will pay the mileage rate, and will not reimburse for gas or car repairs
while in transit.

e. Transit expenses to supplement cross-country travel for the immediate family will
be paid at the rate of $100.00 per each 400 miles using the most direct route.
New faculty are encouraged to submit receipts for lodging and meals during
transit to prevent the $100.00 per each 400 miles from being considered taxable
income.

f. Storage of household goods upon arrival will be at the employee's expense.

g. Some or all of the benefits provided under this policy may be subject to taxation.
Individual faculty are encouraged to consult with a financial advisor or other
professional to determine tax liability for relocation benefits.

2. Pepperdine has agreements with affiliates of Atlas Van Lines and United Van Lines
for all moving arrangements. Should the employee wish, the University will make
the necessary moving arrangements through the affiliate company (Alexander’s
Mobility Services for Atlas; S&M Moving Systems for United).

3. If Atlas or United is not used, three estimates from moving companies must be
presented to the chairperson and dean for approval before agreement is reached with
any moving company.

4. Out-of-pocket reimbursements must be substantiated within sixty (60) days after
incurring the expense. Out-of-pocket reimbursements will not be made after one
hundred twenty (120) days of the expenditure.

5. Any variation or exception to the relocation policy will require the approval of the
appropriate dean and the provost.

6.14. RETIREMENT

1. Sources of retirement income for faculty members at Pepperdine University are threefold:

• The Social Security program of the federal government;
• The Pepperdine University Retirement Plan; and
• The faculty member’s personal savings/investment program.

2. The Social Security program commences following the 65th birthday of the faculty
member or later as determined by the Social Security Administration. The Social
Security program is subject to the laws of the federal government, and both the
faculty member and the employer contribute equally.

3. Annuity income generally begins at the normal retirement date. However, following
termination of employment, the faculty member may begin to receive annuity income
at any time which may be either earlier or later than the normal retirement date. A
faculty member’s annuity starting date may only be deferred beyond April 1 of the
calendar year following the year in which he or she attains the age of 70½, if he or
she is still employed by the University.

4. The faculty member may receive a payment of benefits of the full or partial value of
his or her account in the form of life annuity income any time after age 59½ while he
or she is still employed by the University.

5. The University’s Retirement Plan is mandatory for the faculty member when he or
she fulfills the eligibility and participation requirements outlined in the summary plan
description and the plan document.

6.15. SOCIAL SECURITY/MEDICARE

Faculty members participate in the Old Age, Survivors and Disability Insurance Program,
commonly known as Social Security and Medicare. Deductions are mandatory and are
made from each paycheck in the amount prescribed by law. Equal amounts are
contributed by the University.

6.16. SUBSTANCE ABUSE PROGRAM

The University provides assistance to employees who are dealing with personal or family
drug or related problems. Services include periodic seminars, medical treatment covered
by one of the insurance programs, and confidential psychological counseling through
PacifiCare Behavioral Health (contact them directly and confidentially at (800) 998-
8448).

6.17. TAX-DEFERRED ANNUITY (TDA) PROGRAM

1. In addition to the Pepperdine University Retirement Plan, the University provides an
opportunity for all faculty members to participate in tax-deferred annuity programs
without regard to age and years of service. For application and additional
information, please contact The Center for Human Resources.

2. The University offers this program without endorsement. The TDA program is not
intended to be an employer-sponsored pension plan for purposes of the Employee
Retirement Income Security Act of 1974 (ERISA), as amended.

6.18. TUITION REMISSION POLICY AND EXCHANGE POLICIES
(Since 1988; modified 2006)

1. Benefits: Eligible employees shall be granted the following benefits for themselves
and for all members of their family who qualify under “eligibility.”

a. 50% tuition remission on courses taken in the University’s undergraduate
programs, with an additional benefit computed at the rate of five percentage
points per year of employment. Thus an eligible employee would receive 100%
tuition remission after ten years of employment.

b. 25% tuition remission on courses taken in the graduate programs of the
University’s professional schools and Seaver College, with an additional benefit
of five percentage points per year to a maximum of 75% tuition remission. Thus
an eligible employee would be entitled to 75% tuition remission after ten years of
employment. Professional schools include the Caruso School of Law, the Graziadio
School of Business and Management, the Graduate School of Education and
Psychology, and the School of Public Policy.

c. For employees only, 100% tuition remission in the "space available program" in
the Graziadio School of Business and Management's fully employed MBA and
BSM programs limited to one course per trimester provided all program
enrollment and participation requirements are met.

4. ELIGIBILITY: In order to be eligible for tuition benefits, the student must be in one
of the following categories:

a. A regular full-time member of the faculty who has been assigned a full load of
teaching or equivalent service during two or more trimesters/semesters of the
academic year.

b. A regular full-time staff member who is continuously employed in a regular fulltime
position requiring at least forty (40) hours of work per week.

c. The spouse of any of the above.

d. A dependent son or daughter of any of the above, who is 25 years of age or under.
The child of an eligible employee will be considered a dependent when he or she
is considered a dependent for federal income tax purposes.

5. LIMITATIONS OF BENEFITS: THE FOLLOWING LIMITATIONS APPLY TO
THE TUITION BENEFIT PROGRAM

a. Students shall not receive a faculty/staff tuition benefit and other forms of
unrestricted financial aid which, when combined, exceeds the cost of tuition.

b. Benefits may not be granted after the last day of registration of the term for which
benefits are claimed.

c. Employees shall schedule their classes outside of regular working hours unless
other arrangements are approved in writing and in advance by the administration.

d. An employee, spouse or dependent receiving tuition benefits shall be required to
pay a registration fee, if any, for each session. In addition, all other fees provided
for in the catalog shall be paid by the student.

e. Remission benefits are not available for some programs including but not limited
to field trips, workshops, and seminars. Consult the Financial Assistance Office
for details.

f. Some specialized courses and independent study courses require special
equipment or materials. Employees or their dependents will pay the cost of such
special equipment or materials.

a. Employees on leave of absence from the University, and members of their family,
shall not be eligible for tuition benefits except under one of the following
conditions:

i. When specifically approved in writing by the president of the University.

ii. During a Sabbatical Leave that has been approved by the president of the
University.

b. If benefits are so granted, they shall not exceed those for which the employee and
members of his or her family were eligible during the last trimester/semester of
active service and employment with the University.

7. TUITION BENEFITS FOR DEPENDENTS OF DISABLED OR DECEASED
EMPLOYEES

The University is eager to provide as much security for employees as is consistent
with sound fiscal policies. In line with this intention, if an eligible employee who has
served the University for three years or longer should become disabled or die while
an employee of the University, any dependents of that employee will be granted full
tuition benefits in the undergraduate divisions of the University, provided such
dependents are twenty-five years of age or under on the last day of registration.

8. TUITION BENEFITS TO EMPLOYEES WHO RESIGN OR ARE TERMINATED

a. Pepperdine University grants no tuition remission benefits to administrators,
faculty and staff members and/or their dependents when such employees have
resigned or have been terminated with or without cause. (If the
resignation/termination occurs after the last day of registration, benefits granted
for that trimester/semester will be honored.)

b. If an employee returns to the employ of the University at some later date, tuition
benefits (only) will be computed on the basis of total years of service at the
University.

9. APPLICATION FOR BENEFITS

An application form, available from the Financial Assistance Office, must be filed
with and approved by that office before a tuition discount may be credited to the
student’s account.

10. TAX IMPLICATIONS

The University has entered into an agreement with several other colleges and
universities affiliated with the Churches of Christ. The agreement provides
qualifying children of eligible Pepperdine employees with up to 50% tuition
remission at one of the other participating institutions. Interested employees should
consult the complete text of the reciprocal agreement for statements of qualifications,
benefits, and limitations. A copy of the agreement is available in the Center for
Human Resources or Financial Assistance.

12. TUITION EXCHANGE PROGRAM

Approximately 400 colleges and universities participate in Tuition Exchange, a
program which allows employees to receive undergraduate scholarship benefits at
other participating institutions. For more information contact the Office of Dean of
Admission and Enrollment Management at x4392.

6.19. UNEMPLOYMENT COMPENSATION

Pepperdine University participates in the California State Unemployment Compensation
Plan. Coverage is provided for unemployment transpiring through no disqualifying fault
of the faculty member. Decisions regarding eligibility are reserved by the state.

6.20. WORKER’S COMPENSATION INSURANCE

Pepperdine University has complete Worker’s Compensation coverage for all of its
faculty members for injuries that occur while at work. This coverage is provided at no
cost to the faculty members. Faculty members must report any work-related injury or
illness to their chairpersons and to the Center for Human Resources as soon as practicable
to insure medical treatment. Salary coverage protection is mandated by state law at the
rate of 2/3 of regular salary or the state maximum, whichever is less. It is the
chairperson’s responsibility to notify the Center for Human Resources the day on which a
work-related injury or illness occurs.