Contributions Made on Sick Leave Accruals at Retirement

Purpose

This document describes age and service requirements for contributions on sick leave accruals at retirement, provides the calculation for the contribution amount, and lists Internal Revenue Service (IRS) limitations on the contributions.

Background

A vested employee may be eligible at retirement for contributions on his or her sick leave accruals. Refer to the following section for age and service requirements.

Age and Service Requirements

To receive retirement contributions on sick leave accruals at retirement, the employee must

Calculating Contributions on Sick Leave Accruals

The retirement contribution on an employee’s sick leave is calculated by multiplying the value of his or her accrued sick leave, to a lifetime maximum of 200 days, by the contribution rate in effect for the employee’s retirement tier.

Requirements for Making Contributions on Sick Leave Accruals

Outstanding Vacation Time

Sick leave contributions will not be made until outstanding vacation time is paid out.

Sick Leave Balances

Once a sick leave contribution is made to an employee's contract, sick leave balances must be reduced by the amount for which contributions were made.

Outstanding Workers' Compensation Reimbursement

If an employee retires with a Workers' Compensation sick leave accrual reimbursement outstanding, a retirement contribution will be made on the sick leave accrued at the time of retirement.

When the RF receives reimbursement for the sick leave used by the employee, an additional retirement contribution will be made to the employee's TIAA-CREF contract, provided IRS limits are not exceeded under the tax rules in effect at the time of the reimbursement. If IRS section 415 code limits are exceeded, a cash payment in lieu of the retirement contribution will be paid to the employee.

If the employee's contract(s) has been annuitized, a new application will be required. See "Notification and Application Process" in Basic Retirement Plan Application Process for Vested Employees for information on obtaining and submitting an application.

IRS Limits

Internal Revenue Code (IRC) 415(c), limits annual retirement plan contributions to $44,000 in 2006, and is adjusted as needed for inflation. If contributions on sick leave accruals exceed this limit, the amount over this limit is paid to the employee as taxable income.

Change History

 

 

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