FIACCT 17-03_00 Labor Distribution – Termination Pool (Payroll System)

Effective: July 1, 1994
Revised: June 1, 2003

Purpose

This policy provides general information concerning the Termination Leave pools.

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Policy

A. The Division of Finance will maintain the functional components within the Payroll System for calculating the amounts to be placed into the termination leave pools.

B. The Division of Finance will be responsible for posting these amounts to the pools and charging an expenditure to agency budgets when payroll is posted.

C. When an employee retires or terminates employment, the amount will be taken from the pool not from the agency’s budget. The payouts from the pool will occur automatically by the Payroll System or by payment vouchers.

D. Each Department will be assigned to one of four pools. These pools are defined and maintained by the Division of Finance. The four pools can be seen below:

Š State Office of Education Pool
Š Department of Public Safety Pool
Š Department of Transportation Pool
Š Rest of State Government 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.

These rates, in effect as of July 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%

Funds are paid out of the pool under the following conditions:
Š Termination – Vested annual leave and vested converted sick leave are paid out when an employee
terminates employment.

Š Retirement – When an employee retires, 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.

The following sections discuss the setup and processing methods for the termination leave pools.