407.06 Employee Early Retirement
PURPOSE
A. It is the expressed intent of the Board of Directors of the South Tama County School District, through this policy, to acknowledge employees who have provided years of service to the School District by offering them a voluntary early retirement incentive subject to the terms and conditions set out in this policy.
B. This program provides eligible staff an incentive and voluntary opportunity for Retirement.
C. The program is to provide a means to help meet District budgetary needs and should be cost effective for the district in the long term.
D. Participation in the program can curtail the need to reduce staff members because of declining enrollment or budget limitations.
E. The program provides a means for the district to know vacancies for next year in order to make necessary staffing decisions.
The school district offers an early retirement plan for full-time and part-time employees who are currently performing their assigned duties within the school district. A employee is eligible under the early retirement plan when the employee:
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Is at least age 55 at the effective date of retirement;
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Employee has worked a minimum of 6 consecutive years of service as a full-time or part-time employee at the South Tama County Community School District and is actively employed during the last fiscal year prior to the early retirement;
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The Employee notifies the Board of Directors of his/her intention to see early retirement benefits by submitting to the Superintendent the required Application for Early Retirement Incentive and Release (“Application”) for participation in the plan no later than 4:00 pm on January 3rd, 2024.
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Employee works through the end of the 2023-2024 school year and retires effective June 30, 2024, in accordance with the terms set forth in the Application, unless an alternative date is agreed to between the Superintendent and eligible employee and approved by the Board;
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Receives board approval of the employee's application for participation in the early retirement plan, of the employee's resignation and of the disbursement of early retirement incentive to the employee.
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Employee is not under current consideration for contract termination or who has already been discharged or left employment with the District, unless the notice is based upon reasons which are related to staff reduction;
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Employee has not previously received early retirement benefits from the school district.
Approval by the board of the employee's early retirement application shall constitute a voluntary resignation. Approval by the board of the employee's early retirement application will also make the employee eligible for disbursement of the early retirement incentive; July 1 following the employee's approval for early retirement or a date mutually agreed upon by the school district and the employee, whichever date is earliest. Failure of the board to approve the employee's early retirement application will make the employee's current contract with the board continue in full force and effect.
VOLUNTARY EARLY RETIREMENT BENEFITS
Voluntary early retirement benefits will be determined, as follows:
A. Years at STC
1. 10 or more years of continuous employment as an employee with STC equals 100% of retirement benefits
2. Less than 10 years of continuous employment as an employee with STC will be that percentage of 10, i.e. 8 years equals 8/10 or 80% of retirement benefits
3. Anyone with less than 6 consecutive years as an employee with STC will not qualify for early benefits
4. Years as an employee with STC will generally be determined by issued contracts. If, for some reason, no contract was issued an employee must have worked over one-half of the scheduled time for the position they are filling. Substitute employment will not be considered in determining the time an employee has worked with STC.
B. Retirement and Payment Schedule for all Employees
1. Employees will be paid 20% or an established percentage rate of their salary per year for a maximum of five years.
2. The employee’s salary will be calculated by using the average of their last three years.
3. Shared time employees for which STC holds the contract will be included.
4. For employees who are participating in the District-sponsored group health plan at the time of retirement, the early retirement benefit will automatically be paid into the Health Reimbursement Arrangement (HRA). For employees who are not participating in the District-sponsored group health plan at the time of retirement, the early retirement benefit will automatically be paid into the Special Pay Plan on file with the District.
5. All benefits will be started July 1 with a cash payment on July 20 or January 20 for the Special Pay Plan at the employee request.
C. Calculation of Benefits
1. The amount of the early retirement benefit is calculated by multiplying the % of years as calculated pursuant to Section A by the applicable rate as calculated pursuant to Section B above.
2. The maximum amount paid to any employee under this policy will be capped at $7,800 per year unless otherwise modified by the Board when they deem it to be in the best interest, or an advantage to, the district.
3. If adjustments are made to the maximum amount paid to any employee, the Board will formally set this amount no later than January 15 of each year.
4. No interest shall be paid by the District on temporary delays in the payment of the early retirement incentive.
5. Retirement fees and taxes, where applicable, will be deducted from the early retirement benefits detailed in this early retirement incentive policy.
APPLICATION
1. Employees requesting early retirement benefits must submit the required Application to the Superintendent by 4:00 p.m. on January 3, 2024. Written acceptance of this offer from the employee shall be considered by the Board of Education as a voluntary resignation and termination of any contract and/or employment with the District effective June 28, 2024 of the current school year (unless an alternative date is agreed to between the Superintendent and eligible employee and approved by the Board).
2. The Board of Education may waive (move to an early date or extend) the application deadline when it deems such a waiver to be in the best interest, or an advantage to, the District.
3. An employee’s application for early retirement benefits is not, in itself, a resignation of a contract with the School District nor does it require the Board to accept the application. However, acceptance by the Board of an employee’s resignation and request for retirement will be considered a voluntary resignation and termination of the employee’s contract for employment. The Board’s acceptance of the employee’s resignation and request for retirement will be considered final and the employee will be considered terminated on or before June 28, 2024. If the Board does not accept the employee's resignation and request for retirement, the employee’s contract will continue in effect.
OTHER BENEFITS
1. Health Insurance
Any employee that qualifies for membership in the group health insurance policy may, as permitted under the IRS 125 Cafeteria Plan, or at their own expense, continue to carry that policy to age sixty-five, if the law, IRS Rules, and the insurance carrier permit. If this provision is contrary to the insurance carrier policy, state and federal regulation and federal law, the benefits provided will remain within their guidelines.
2. Blue Card Holder
Employees that retire under this policy will qualify for a blue card even if you are not 65 years of age.
DEFINITIONS
1. Years at STC – Will generally be determined by issued contracts. If, for some reason, no contract was issued an employee must have worked over one-half of the scheduled time for the position they are filling each year. Substitute employment will not be considered.
2. Salary – Salary will be computed as an average of the employee’s last three years salary using the employee’s wages as reported to IPERS. An employee whose contract was involuntarily reduced during the three years before they retired will have their salary calculated by using the average of their three highest earning STC years.
Beneficiary Option
In the event of the death of the employee prior to payment of the early retirement incentive but after the licensed employee's retirement has begun, the early retirement incentive will be paid to the designated beneficiary in one lump sum payment. In the event no beneficiary is designated, the incentive will be paid to the employee's estate in one lump sum payment.
The board has complete discretion to offer or not to offer an early retirement plan for employees. The board may discontinue the school district's early retirement plan at any time.
NO VESTING RIGHTS/BOARD DISCRETION TO AMEND OR REVOKE
The adoption of this early retirement incentive policy shall not vest any right in any employee whether or not the employee is currently eligible for the early retirement incentive. The Board shall have the complete discretion to amend or repeal this plan or any provisions thereof at any time with or without notice and shall not be obligated to provide any benefits to any employee after the date of such amendment or repeal, except to those employees whose early retirement pursuant to this plan has commenced prior to amendment or repeal.
BOARD’S RIGHT TO LIMIT OR DENY BENEFITS AND GRANT WAIVERS
1. The Board reserves the right to pay no early retirement benefits, to limit the number eligible, or adjust the maximum amount paid. If the Board limits the number eligible, those approved will be on a first apply, first eligible basis.
2. The Board expressly reserves the right to reject any application for early retirement.
3. The Board reserves the right to waive any requirement or condition of this policy at its discretion and at any time. Any decision by the Board to waive a requirement or condition which is a part of this policy shall not establish any precedent with regard to any other request for a waiver.
INDEPENDENT ADVICE
Employees are advised to seek independent advice with regard to tax or financial consequences associated with any action taken by them under this plan.
PLAN INTERPRETATION
The Board is the final arbiter of all questions of interpretation under this plan, including but not limited to, questions of eligibility or benefit calculations.
STATEMENT OF NON-DISCRIMINATION
The School District will not discriminate against any employee on the basis of age, gender, gender identity, sexual orientation, race, color, creed, religion, national origin, marital status, disability, or any other protected class under state or federal law, through the application or administration of this policy.
Legal Reference: 29 U.S.C. §§ 621 et seq. Iowa Code §§ 97B; 216; 279.46; 509A.13.
Approved:10/20/1986
Reviewed: 11/7/2022
Revised: 11/6/2023