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LRCEA Voting Flyer Quick Plan Overview: The Special Pay Plan is a new process for limiting the tax withholding on your vacation payout when you retire or leave the district. Currently, when you leave the district you are issued a check for the cash equivalent of your unused accrued vacation hours. This check is subject to the same tax withholding as supplemental income (in other words, the same as retro checks and overtime). The new process the district is implementing would shield you from that withholding. The cash equivalent from your unused accrued Vacation Time would be placed in a special 403B account under your control, and managed by Envoy (the agent that handles retirement accounts for the District). You could then immediately withdraw the funds from that 403b account at a lower taxable rate.If accepted, the plan would affect employees aged 55 or older who retire or leave the district as of January 1, 2012. If you leave or retire before age 55, then the current process and current withholding tax rate would be automatically used, and the district will send you a check directly for the cash equivalent of your unused accrued vacation days.We are told that each process should take approximately the same amount of time. Special Plan Consideration: If you already contribute to a 403b it is potentially possible that your contribution for the year added to your vacation payout at the time of retirement (or leaving the district) could total more than the maximum contribution allowable to a 403b in a single year. A decision must be made for the plan right now on how any overage is to be handled by the District and Envoy. There are two options.Have any overage returned to you as a cash equivalent subject to the tax withholding of supplemental income. OR Have any overage placed in a second non-interest bearing account (by Envoy) until the next tax year. The money will become available in the next year and taxed as income at your tax rate for that year. Voting Information, we will be making two decisions:Decision 1 – Do we participate in the Special Pay Plan? YES, LRCEA should participate in the district’s Special Pay Plan NO, LRCEA should not participate in the district’s Special Pay Plan Decision 2 – How should potential overages to the maximum 403b contributions be handled?Have any overage placed in a second non-interest bearing account (by Envoy) until the next tax year. The money will become available in the next year and taxed as income at your tax rate for that year.OR Have any overage returned immediately to the employee as a cash equivalent subject to the tax withholding of supplemental income.Voting Locations: The polls will be open Friday, December 16 from 8:30 AM until 4:30 PMARC — Library 1st FloorCRC — Library Circulation DeskDO — Printing Services FLC — Admissions and RecordsSCC — to be announced Absentee Ballot: Because of the Holidays, Absentee Ballots will be available for this vote only, and may be faxed to the LRCEA Office (916- 927-9726) until 5:00 pm Friday December 16.Click this link for an absentee ballot. Special Note to Sacramento City Employees: The lunch meeting for SCC had to be re-scheduled for Wednesday , December 14. You will receive the same information as the other campuses at that meeting.
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