The East Buchanan Community School District Retirement Program as described in this document has been approved by the District Board of Education to be effective for the 2024-2025 fiscal year. As approved, it applies only to 12-month Salaried Employees. This Retirement Program does not vest rights in any District employee whether or not the employee is currently eligible for the Program.
Purpose
The Board of Education of the East Buchanan Community School District has deemed it appropriate to provide a retirement incentive to 12-month salaried employees of extended tenure who opt to retire from the District pursuant to the terms of this Retirement Program.
The purpose of this program is to provide the District’s employees with the option and opportunity for retirement from their employment with the District. This Retirement Program is designed to show the District’s appreciation for the services an employee has rendered to the District, to aid the employee in their transition from public service to retirement, and to save District funds through a reduction in staff and/or replacement savings.
EMPLOYEE REQUIREMENTS
A. Determining Eligibility - Employees must meet the following criteria to be eligible to participate in the retirement program:
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in applying this provision, an employee will be at least the age of fifty-five (55) on or before their last work day;
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wish to retire voluntarily from service in the East Buchanan Community School District;
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has been actively employed during the school year in which one requests retirement benefits;
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has completed a minimum of twelve (12) years continuous service to the East Buchanan Community School District and is currently employed at the time the voluntary retirement request is made. A leave of absence may interrupt continuous service without affecting the continuous years of service rule. Professional and military leave will qualify toward continuous service;
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is not receiving payments from the district’s long-term disability insurance program; and
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has not been discharged for cause or notified that their contract is under consideration of termination or reduction.
B. Qualifying for Program - An eligible employee qualifies for this program upon completion of the following requirements:
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Application for participation in the Early Retirement Program must be made in writing, presented with a resignation of the employee’s position beginning January 1st and no later than January 31st of the current contract year. The Board of Education reserves the right to waive strict compliance with the early retirement program application process, and the deadline.
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the Board’s acceptance of the written resignation. The resignation will not be binding unless the employee is eligible and appropriately qualifies under the program and the Board accepts the employee’s written resignation. The Board’s acceptance of the written resignation will be considered final action and shall mean that the employee’s application is accepted and the employee’s contract and employment duties will end on the last day of the current fiscal year.
In all cases, completion of the above requirements is realized by receipt or certification by the Board Secretary.
PROGRAM CALCULATION
Each participating employee may receive two incentives as an early separation of a payment into a Health Reimbursement Arrangement (HRA). It will deposit as a non-elective employer contribution directly into the early retiree’s account established by the district within 60 days of their last work day. Any benefit paid will be subject to deductions required by federal or state law. The amount is based on:
1) Percentage of salary at 1.0 FTE of the specific employee for the current school year
2) a payout based upon the five-year average of employee FTE (Max 1.0 FTE) and the five-year average of remaining sick days at the end of the school year.
Payout:
40% of current base salary + $100 per remaining sick days based on calculations
When any employee retires after Twelve (12) or more years of continuous employment with the East Buchanan Community School District and has accumulated sick leave up to a maximum of 120 days sick leave, a retirement stipend shall be paid based upon the following schedule.
The benefit amount for all employees will be determined in the same manner based upon the five-year average of employee FTE and the five-year average of remaining sick days at the end of each fiscal year:
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The retirement applicant will be paid one hundred dollars ($100.00) for each eligible sick day times their average FTE (maximum 1.0 FTE).
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Each retirement applicant will have their FTE determined by averaging the FTE for the previous four (4) contract years and their FTE during the school year in which they request retirement.
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Each retirement applicant will have their number of eligible sick days determined by averaging the remaining sick days on May 30th for the previous four (4) contract years and their remaining sick days on their last work day in which they request retirement.
HEALTH INSURANCE
The employee may elect to continue to participate in the District’s health insurance plan until he or she reaches the age at which they become eligible to receive Medicare as long as they pay the monthly premiums and are permitted to continue coverage by the insurer. To continue health insurance coverage, the employee shall pay the monthly premium amount to the District’s Business Office on a date mutually agreed upon prior to the date the District’s premium payment is made to the insurance carrier.
Nothing herein shall limit the District’s ability to change the terms of its existing health insurance plan. This plan in no way guarantees that an employee will be provided any certain level of benefits or premiums during the time of the employee’s participation in the plan.
EMPLOYEE RIGHTS
In the event this Retirement Program is altered or discontinued, persons who retired from employment with the District under its provisions will continue to receive the benefits in effect and authorized by the Board of Education at the time the employee’s letter of resignation was accepted.
The adoption of this Retirement Program shall not vest any rights in any employee whether or not the employee is currently eligible for retirement. The Board of Education shall have the complete discretion to review, amend or repeal this policy at any time, when, in the judgment of the Board of Education, the district no longer realizes economic benefits from this policy or otherwise determines that the policy is not in the best interests of the district. Furthermore, the district shall not be obligated to provide any of the benefits to any employee after the date of such amendment or repeal, except to those employees whose retirement pursuant to this policy has commenced prior to the amendment or repeal.
STATUS OF PARTICIPANTS
An employee who elects to participate in the District’s Retirement Program will become a retired employee and will be entitled to all rights and privileges of retired employees under applicable law and the policies of the East Buchanan Community School District Board of Education.
However, Early Separation Plan participants shall not be eligible to be rehired in any capacity with the East Buchanan Community School District; nor shall the East Buchanan Community School District be required to consider an application for employment from an Early Separation Plan participant; provided however, that, at the sole discretion of the Board of Directors, the District may employ Early Separation Plan participants as temporary substitute employees or as coaches and/or sponsors of extracurricular activities.
Each employee who elects to participate in the District’s Early Separation Plan must specifically agree to hold the District harmless and indemnify it if the participant attempts to submit an application for employment or otherwise attempts to be reemployed with the District. The participant is not precluded in any way from accepting employment with an employer other than the District after fulfilling the terms of the employee’s current contract with the District.
In the event the employee who elects to participate in the District’s Retirement Program has previously signed a contract for the next school year, said contract will be null and void.
TAXABILITY OF RETIREMENT BENEFITS
Retirement benefits that are solely payment for health care benefits are generally considered to be not taxable income to the employee. Cash payments are generally considered taxable income to the employee. But when an employee has the option to choose between cash or a lump sum payment in addition to or in lieu of health care benefits, all of the benefits are likely to be treated as taxable income. So, retirees receiving health care benefits may have to pay income tax on the value of those benefits. However, the District is not providing tax advice, and the employee must consult the employee’s own tax advisor for the actual taxability of retirement benefits.
POLICY CONTINUATION
The Board of Education shall review the Retirement Policy on an annual basis to assess the needs of the district regarding personnel considerations and budget issues prior to the December board meeting of each school year. A decision on whether to offer the Retirement – Certified Personnel Policy for the current school year shall be made at that time.
Date Adopted: July 12, 2023
Updated: November 2024