State of California

              M E M O R A N D U M

              REFERENCE CODE:    95-029

              DATE:        June 5, 1995

              TO:          PERSONNEL MANAGEMENT LIAISONS

                           THIS MEMORANDUM SHOULD BE DISTRIBUTED TO:

                           DEPARTMENT ACCOUNTING, PERSONNEL OFFICERS AND RETURN  
                           TO WORK COORDINATORS


              FROM:        Department of Personnel Administration
                           Office of Administration

              SUBJECT:     State Compensation Insurance Fund Payments


              CONTACT:     Jamie Meyers, Manager, Workers' Compensation and  
                           Safety Program
                           (916) 327-4024  CALNET: 467-4024
                           Office Vision: DPA (JLMEYERS)
                           INTERNET:  JLMEYERS@SMTP.DPA.CA.GOV



              The Master Agreement in effect from January 1, 1992 through 
              December 31, 1994 provided that State Compensation Insurance Fund 
              (State Fund) would receive a minimum of $35,000,000 in service 
              fees for the calendar year 1994.  They actually collected $27.5 
              million.  This left the State of California owing State Fund $7.5 
              million.

              In negotiating the new Master Agreement, State Fund and Department 
              of Personnel Administration (DPA) agreed that the $7.5 million 
              shortfall could be taken from the existing deposits.  The new 
              Master Agreement also calls for the deposit amount to be one-sixth 
              of a department's estimated claims costs.  The office of the State 
              Controller has recently completed journal entries to bring the 
              total deposits in compliance with the new Master Agreement.  The 
              whole process was delayed due to all the changes required under 
              the new Master Agreement. 

              The deposits on hand at the State Fund will be used to pay the May 
              and June 1995 benefit bills.  Departments should not pay their May 
              and June benefit bills.  The invoices for May and June have been 
              stamped "Do Not Pay".  Service fee invoices for May and June are 
              not covered under the deposit and must be paid as usual. 













              The new deposits for fiscal year 1995-1996 will be calculated 
              shortly.  The State Controller's Office will be asked to collect 
              these deposits through the journal entry process in July 1995.  
              These new deposits will be used to pay the benefit bills in May 
              and June of 1996.

              If you have any questions, please call Jamie Meyers, DPA at (916) 
              327-4024, or John Holder, State Fund, (916) 567-7559.




              Patricia Pavone, Chief
              Benefits and Training Division