FIACCT 17-03_10 Labor Distribution – Termination Pool – Pool Funding

Effective: July 1, 1994
Revised: June 1, 2004

Purpose

This policy provides information concerning the funding for the Termination Leave pool.

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Background

The purpose of the Termination Leave pool is to charge termination leave payouts against the budget when earned, not when used. When an employee terminates or retires, certain types of charges are made to the pool.

The pool is funded by applying a rate (additive) to payroll costs each pay period. Each pool has a separate rate. The rates effective for fiscal year 2004 are as follows:

Pool:	Additive Rate:
State Office of Education Pool	3.50%
Department of Public Safety Pool	4.86%
Department of Transportation Pool	5.50%
Rest of State Government Pool	2.18%

The termination leave pools will be funded from the rates applied to payroll costs. Both payroll costs and the termination leave additives will be expensed to the department’s budget when payroll is processed. The following example explains the process.

Example:
For this example, the following payroll costs are expensed to the department budget. These costs are used for presentation purposes only.

Payroll Costs:

Amount	Fund	Agency	Org	Appr Unit	FINET Object	Rpt. Cat.
$1,330	100	120	1038	AAA	5101	PRS1
$700	100	120	1038	AAA	5170	PRS1

Agency 120 belongs to the “Rest of State Government” pool. This pool requires an additive rate of 2.18%. The additives are charged to the department budget and can be seen below:

Termination Leave Additives:

Amount	Fund	Agency	Org	Appr Unit	FINET Object	Rpt. Cat.
$28.99	100	120	1038	AAA	5300	PRS1
$15.26	100	120	1038	AAA	5300	PRS1

An offset entry is also written for $44.25 ($28.99 + $15.26), the additive amount, which is deposited into the “Rest of State Government” pool.

When individuals terminate employment, vested annual leave and vested converted sick leave are paid out of the Termination Leave pool. This happens automatically in the Payroll System.

When individuals retire, vested annual leave, vested converted sick leave, 25% of sick leave cashout, retirement health insurance premiums, and life insurance premiums are paid out of the Termination Leave pool. This happens automatically in the Payroll System

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Procedures

For calculating and posting Termination Leave pool additive.