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From the Executive Director, Department of Human Resources, an informational report regarding payout of accrued hours upon retirement. (INFORMATIONAL UNLESS OTHERWISE DIRECTED BY THE COMMITTEE)
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Issue/Background
Upon retirement, Milwaukee County employees are entitled to a distribution of accrued paid time off. This includes accrued sick, vacation, personal, holiday, and compensatory time. The dispensation of accrued sick time is clearly defined by the Milwaukee County Code of General Ordinances Chapter 17, sub chapter 184. The dispensation of other accrued time is not defined in ordinance, and the current policy/practice has evolved over time. Human Resources will be implementing a departmental process change regarding how we will pay out remaining vacation, personal, holiday and compensatory time.
The Employee’s Retirement System pension counselors currently present two options to the employee as a part of the retirement meeting, and forwards to HR/Payroll for processing. The options provided to retiring employees are described below:
Option 1: Lump Sum Payout
· Accrued hours are processed as one lump sum payment following the last day worked.
· No additional pension service credit is accrued for this time.
· The retirement date for calculating pension payments is the same as the last day worked.
Example: A retiring employee ending work on June 1, 2012 with 212 hours of payable accrued time would be paid for the entire 212 hours in one payment. The employee’s pension would be based on a 6/1/12 retirement date.
Option 2: Gradual Payout of Hours
· Accrued hours are paid at 80 hours per pay period until the balance is exhausted.
· The retiring employee accrues additional pension service credit for the accrued time that is gradually paid out.
· The retirement date for calculating pension payments is the date that the employee’s accrued hours balance is exhausted. Annuity payments do not commence until after the retirement date.
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