COVID-19 Retirement Incentive for Staff
TEAMS & USPS employees with ten (10) years of creditable service (need not be consecutive) on or before September 30, 2020, including employees in DROP, will be eligible to cash out one-fourth their unused sick leave balance up to 480 hours as a result of retirement from the University and the State of Florida between May 4, 2020 and September 30, 2020.
Employees who take advantage of the COVID-19 Leave Cash Out Incentive will be required to notify their supervisors of the date they wish to retire. Notice of retirement will have to be provided to the supervisor and UFHR Benefits (email@example.com) by June 30, 2020. The retirement date must be on or before September 30, 2020.
Steps for active employees to follow once they decide to retire can be found on the retirement website at, https://benefits.hr.ufl.edu/retirement/ready/.
- Florida Pension Plan
- Florida Investment Plan
- ORP Plan
Those staff who wish to utilize unused vacation may request usage of up to 160 hours (4 weeks) of vacation leave upon notice of termination from UF. This is in addition to the leave cash out (up to the maximum for the individual salary plan) the employee may receive upon separation. As always, approval of vacation leave requests is at the discretion of the supervisor. All approved vacation leave must be taken prior to the effective date of retirement.
The employee works with their department to initiate a leave cash out, which must be submitted no earlier than the first payroll period after the retirement date.
Items to consider when making the decision to retire:
- Determine if available retirement benefits will allow for the desired standard of living.
- Determine the source of health insurance benefits. Employees who are covered by GatorCare must transition onto State benefits prior to retirement to be eligible for early retiree coverage.
- Determine the impact of having to possibly pay for the full cost of health insurance, less the State where applicable.
- If you plan to retire before you are eligible for Medicare, you will need to factor in the cost of healthcare into your retirement budget. While early retiree coverage may be available, a retiree is typically responsible for both employer and employee premiums.
- For anyone retiring at age 65 or older, you will be eligible for Medicare. The State offers Medicare supplemental plans to retirees who enroll in Medicare. While less expensive than traditional health insurance, retirees should be aware of premiums due.
- Know the rules and regulations of your retirement accounts. Each plan (ORP, Pension, Investment) has different provisions regarding to payments and distributions, some of which are age-based.
- Effective May 1, 2020, retirees are no longer allowed to work through a third party (i.e. staffing agency) within the first 12 calendar months as it would result in loss of retirement status and benefits.
Cash Out Information
Under this incentive, payments for unused sick leave will be paid to the retiree after required deductions including taxes and mandatory retirement contributions are taken. However, payments for unused vacation leave remain subject to the UF Special Pay Plan (SPP). The SPP is a defined contribution plan authorized under Section 401(a) of the Internal Revenue Code. TEAMS & USPS employees who receive vacation leave cash outs of $5,000 or more are required to participate. These cash out funds, which are not subject to Social Security taxes, are treated as retirement contributions and are deposited into a tax-deferred account in the participant’s name. Participants may decide how to allocate the money amongst the available investment options.
Early retirees above age 59 ½ may avoid early distribution penalties, as well as those who rollover SPP funds into other qualified plans. All participants are encouraged to speak with a financial or tax professional for specific guidance.
SPP contribution limits are based on the UF fiscal year. The amount eligible for this plan is fifty percent of the employee’s total fiscal year earnings (regular wages plus the leave cashout). Any amount not contributed to the Special Pay Plan, as well as sick leave payments, will be paid to the retiree by direct deposit to the primary bank account of record.
It generally takes six to eight weeks from the time the cash out is initiated to when the account is established. AIG Retirement Services, the Plan Administrator, will contact participants by mail once the funds are received. Additional information regarding the SPP can be found at https://benefits.hr.ufl.edu/retirement/special-pay-plan/.
Department administrators will enter a Change Employment Status ePAF for retirement of the staff employee; the effective date should be the day after the employee’s last workday. The employee exit checklist must be completed prior to the employee’s last workday.
The toolkit for processing these ePAF’s can be found here.
Cashout ePAF’s will need to be submitted during the pay period following the pay period in which the employee retired to give the system time to post the final leave accruals and/or adjustments made during the prior pay period.