IV-43: Early Retirement Incentive

North Sanpete School District
Statement of……………

Board Policy With Guidelines

Policy Number: IV-43
Effective Date: 11/27/2001
Revised Date: 10/10/2006

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Subject: Early Retirement Incentive

BOARD POLICY

The Board of Education, North Sanpete School District, in order to provide some incentive to the career employee who may want to retire before the usual retirement age, hereby adopts the following termination benefits.

GUIDELINES

1. This policy supersedes any prior early retirement policy.

2. Any North Sanpete School District Employee whose (a) pay is based on the teacher or administrative salary schedule, who (b) has served in the North Sanpete School District, as a member in the Utah State Retirement System for a period of 20 years minimum, or who has served for 30 years in the State of Utah as a member in the Retirement System, and desires early retirement may participate in the following program at any age.

Years of service purchased under Utah Code, Section 49-3-410 or subsequent, similar provisions will count towards these minimum years.

3. Benefits will be payable at the following schedule and rate: Three equal, annual payments will be made beginning September 15 of the year the employee first qualifies. These annual payments will be 25% of the difference between the employee’s step and lane on the teacher salary schedule for the next school year after the date of retirement and that of an entry level teacher (Step 1, Lane 1) for that same year.

If the employee, with the Board’s approval, retires before the end of the contract year, the employee may elect to receive a partial payment for the year he or she retires. The benefit for that year will be calculated as described above, with the payment pro-rated based on the total number of contract days missed divided by the number of contract days. The last benefit payment will be reduced accordingly, so that the total payments will not exceed the amount described in Part 3, 1st paragraph.

If the employee purchases years of service under 49-3-410 or subsequent provision, the total early retirement benefit, normally paid over three years, will be paid in one lump sum to the Utah State Retirement Office to go towards the employee’s cost of purchasing the years of service. The employees accrued sick pay payable under Board Policy IV-33 can also be paid directly to the retirement office, if requested by the employee under this same Section 49-3-410.

4. The Board of Education shall continue carrying the health, accident, and life insurance (subject to group policy changes) on the employee and his or her spouse until age 65; or three years from the first working day missed due to retirement; whichever comes first. Employee may elect to stay on the group insurance until age 65, providing the annual premium for each of those years is paid by employee to the district by September 15 of the plan year. The premium would be the rate for the retiree group demographic as determined by the district insurance carrier. The employee may opt to leave their accrued, unused sick and/or vacation pay payable under Board Policy IV-33 on deposit with the North Sanpete School District and put it towards these future premiums. Employees must elect this option in writing prior to retirement. For full time classified employees (defined as those working at least 35 hours per week, 12 months a year) who meet the requirements outlines in Section II 2, (b) above. The Board shall continue carrying the health, accident and life insurance for the employee plus one dependent for the same time period and terms outlines in paragraph 4 above. Board members may elect to stay on the group insurance for three years from the date they leave the board, providing they pay the January to August premium for the plan year they leave office by January 15, and by September 15 for the remaining years.

Insurance available through employment subsequent to retirement from the North Sanpete School District will replace insurance offered through this policy.

If both husband and wife are employed by the District and both qualify under this early retirement policy, the post retirement years of insurance paid for by the District for one spouse may be deferred until the years paid by the district for the other spouse have been used.

5. Benefits to the employee will cease when the employee qualifies for full Social Security benefits under 42 U.S.C. §401 et seq. (On the date this policy became effective, this would be on the employee’s 65th birthday). Payment for this year will be pro-rated for the days the employee still qualifies for the early retirement benefit.

6. The annual benefit payments are payable under earned income, exempt to the District from FICA, retirement, federal, and state taxes. Payments will be reported by the district with tax form 1099.

7. Written applications for early retirement should be submitted to the office of the Superintendent prior to March 15. Such applications are subject to the approval of the Board of Education.

8. Employees retiring under a disability program shall not be entitled to early retirement benefits hereunder. Also, any professional employee that has been notified of suspension, termination, or non-renewal of contract will not be eligible for participation.

9. Alternative payments of the early retirement benefits may be arranged by the employee and the district office in a mutually agreeable manner.