Leave of Absence
Learn How A Leave Of Absence Can Affect Your Retirement Benefits
What causes “lost time”?
- Your retirement contribution is a percentage of the compensation that you receive from your employer.
- If you receive a full 80 hours of pay (regular, sick, vacation, holiday, or comp. time used) on each of your 26 biweekly pay periods, throughout the year, you will receive retirement service credit for a full year of service.
- If you receive less than 80 hours of pay, on any given payroll, you will lose retirement service credit.
The following are some examples of situations that can cause lost time:
a) Unpaid leave of absence
If you request an unpaid leave of absence, you will not receive service credit for the elapsed time.
b) State Disability Insurance (SDI)
If you receive SDI payments to supplement your sick leave pay, while you suffer through an extended illness, you will only receive retirement service credit for the sick leave paid by your employer and lose service credit for the time paid by SDI.
For example, if SDI will pay you $200 biweekly and you normally make $800 biweekly ($10/hour) your payroll preparer will pay you 60 hours of time (or $600) and you will lose 20 hours of service credit which you would normally have accrued if you had been paid fully by your employer.
c) Workers’ Compensation
If you receive workers’ compensation payments to supplement your sick leave pay, while you suffer through an extended illness, you will only receive retirement service credit for the sick leave paid by your employer and lose service credit for the time paid by workers’ compensation.
For example, if workers’ compensation will pay you $200 biweekly and you normally make $800 biweekly ($10/hour) your payroll preparer will pay you 60 hours of time (or $600) and you will lose 20 hours of service credit which you would normally have accrued if you had been paid fully by your employer.
Why does lost time matter?
One of the factors used in determining your monthly retirement allowance, will be the total years of service that you are credited with, at the time of your retirement. Lost time during your service years will reduce the amount of your monthly retirement benefit.
Can I buy back my “lost time”?
Yes, you may reinstate up to 1 year (2,080 hours per incident) of retirement service credit, so long as your absence was due to illness, injury or family and medical leave act.
How much will it cost?
To reinstate lost service credit, you must pay the retirement contributions that would have been withheld from your normal paychecks during your leave, plus interest. The interest will continue to accrue until the buy back is complete. Therefore, the sooner you do the buy back, the lower the purchase amount will be.
When can I request a buy back?
Once you complete your leave of absence and return to a full-time work schedule, you can request a calculation of the cost to buy back your lost time. To request a buy back calculation, please contact our office at 525-6393 or download the form from our website at www.stancera.org. If you choose to do a buy back, it must be completed prior to your date of retirement.
Please note: StanCERA will not accept your buy back request if you are still on a leave of absence. Do not request a calculation until you have returned to your regular work schedule.
Do I have any payment options?
Yes. You will be given up to four payment options. They will include all or some of the following:
- You can sign up to have additional contributions withheld from your regular payroll checks.
- You can write a check to cover the entire cost of the purchase.
- You can transfer money from your deferred compensation account.
- A possible combination of two or more of the previously stated options.
What can I expect?
Once we receive your completed buy back request form, we will calculate the cost of your buy back. When completed, the information will be sent to you for review. If you chose to proceed with the buy back, you will need to call to set up an appointment with a Retirement Specialist to discuss your options, sign your contract and discuss any questions you may have.
Please note: Due to the extensive research involved and the volume of requests, it can take 6 to 12 months to prepare your buy back calculations.
This brochure provides general information about the leave of absence buy back process. If any discrepancies exist between information in this brochure and the law, the law will prevail. You are encouraged to call StanCERA’s retirement office should you have any questions about the buy back process.