One of the options at retirement that teachers have is to "cash in"their available sick days by either applying for termination pay or terminal leave. In both cases for every 2 sick days, 1 day is credited. This is commonly known as"2 for 1". For example if the teacher has 100 sick days in their Cumulative Absence Reserve (CAR), they are credited with 50 days of pay if taken as termination pay or 50 days of service for terminal leave. Here are some of the things you need to know before you make that decision.
Termination Pay:
If you decide to take termination pay, you will receive three lump sum payments annually for a total of one half the days you had in your CAR at the time of retirement or resignation/termination. To apply for termination pay you need to download the form from the DOE website or ask your payroll secretary for form OP44, if you are a rotating ATR or were terminated and the school is uncooperative, then please call Amy Arundell at UFT headquarters and she will assist you in obtaining and completing the form.
The OP44 form is essential since the DOE will not automatically pay you for your available CAR days without a completed form and you don't want the DOE to keep your money.
Finally, you will need to pay income and Social Security taxes on the year that you receive the lump sum payment. However, the payments will not affect the earnings limitations on either NYS public employment or Social Security.
Terminal Leave:
You are allowed to go on leave before officially retiring and use up half of the days in your CAR. If you decide retiring is not for you, then, as long as you still have days remaining in your CAR, you can get your position back with the remaining CAR as the starting point. However, there are some limitations that one needs to know before choosing the terminal leave option.
Terminal leave cannot extend beyond one semester. Any remaining CAR will automatically be converted to termination pay. Moreover, You must decide by May 31st if you take terminal leave in the second semester (February) to rejoin the workforce, otherwise, your decision is irrevocable and you will be considered retired. The same goes for the first semester (September), if you do not return to service by December 31st, you are considered to have retired. You cannot apply to be reinstated in either January or June. To return to service you must contact the DOE and UFT since an application must be filled out before you can begin working again. Once your CAR is exhausted, your terminal leave is over and you will have officially retired.
If you become ill during your terminal leave period, contact the DOE and UFT and apply to have your terminal leave converted to sick leave, subject to the approval of the medical bureau. Finally, there is no limitation to how many times you can take terminal leave, providing you have the available CAR days in your bank.
During the time you are on terminal leave you will be considered an active member with full pay and benefits as well as accumulating CAR days, pension credits, and still contribute to the TDA. If you decide to take terminal leave during the second semester and intend to retire, you can send a check to the Teacher's Retirement System to fully fund your TDA for the rest of the year. For example if you are allowed to contribute $24,000 to the TDA but only will contribute $18,000, then before June 26th send a check for $6,000 to TRS to fully fund your annual TDA contribution. Otherwise, once you retire there are no TDA contributions allowed.
Form QP40 is available online from the DOE website or the payroll secretary. For rotating ATRs who are unable to obtain the form, contact Amy Arundell at UFT headquarters and she will assist you in applying for terminal leave.
Whether you choose termination pay or terminal leave, good luck in retirement, assuming you actually retire.