Common use of Payment and Deferral of Severance Pay Clause in Contracts

Payment and Deferral of Severance Pay. A. Notwithstanding anything in this Agreement or Board policy to the contrary, in accordance with terms of this subsection and any related provisions of a plan document adopted by the Board to comply with requirements of Section 403(b) of the IRC, retiring bargaining unit members shall have the total amount that otherwise would be payable to them as severance pay under the above subsections of this Section 7.05 mandatorily paid into an annuity contract or custodial account that is designed to meet the tax-qualification requirements of IRC Section 403(b) (a “TSA”). For the purpose of this subsection, this arrangement is referred to as the “403(b) Plan”. The provisions of this subsection are effective for all retiring bargaining unit members: (1) whose termination of employment is on or after June 30, 2006; (2) who retire and are thereby entitled to severance pay pursuant to the provisions of this Article; and (3) who is or will be age 55 or older in the calendar year in which the teacher retires. A “retiring bargaining unit member” is defined for this purpose as a bargaining unit member who is eligible for service retirement under ORC Chapter 3307 (or the provisions of some other Ohio public employee retirement system) and who actually service retires under that Chapter (or such other Ohio public employee retirement system) upon termination of employment with the Board. B. The terms of the 403(b) Plan shall include the following: 1. Participation in the 403(b) Plan shall be mandatory for any retiring bargaining unit member who is entitled to severance pay as set forth above in (A). 2. An employer contribution shall be made on behalf of the retiring bargaining unit member under the 403(b) Plan in an amount equal to the lesser of: a. The total amount of the bargaining unit member’s severance pay under this Section 7.05. b. The maximum contribution amount allowable under the terms of the 403(b) Plan. 3. The required contribution to the 403(b) Plan shall be made within the timeframe described in subsection 7.057 regarding the payment of severance pay. 4. In the calendar year of retirement, or in any other calendar year, the total amount of severance pay that may be paid to a TSA under the 403(b) Plan shall not exceed the maximum contribution amount allowable under the federal income tax law for TSAs that are intended to be tax qualified under IRC Section 403(b). If the amount payable to the 403(b) Plan in any calendar year would exceed the maximum amount that is permitted under the applicable federal income tax law for that year, the excess amount shall be contributed to the 403(b) Plan on or before the first payroll date in January of the next calendar year; and if there is still any remaining excess amount, the remaining excess shall be paid in cash to the retired bargaining unit member. 5. The Treasurer shall be the administrator of he 403(b) Plan, unless the Board delegates administration to a third party. The 403(b) Plan administrator shall be permitted to administer, interpret, and operate the plan as the plan administrator shall deem necessary for compliance with the IRC 403(b) and applicable regulations (including proposed regulations) and rulings thereunder. 6. A teacher who is a participant in the 403(b) Plan shall complete a 403(b) sponsor enrollment package with any qualified group annuity contract selected by the teacher prior to retirement, and unless and until a teacher does so, no contribution of Severance and/or incentive pay shall be made to the 403(b) Plan. 403(b) Contracts shall be individual contracts owned by the 403(b) Plan participants. 7. If a retiring bargaining unit member is entitled to have a contribution paid to the 403(b) Plan and dies prior to such contribution being paid to the 403(b) Plan, the contribution shall nevertheless be paid to the 403(b) Plan and then be paid to a beneficiary of the bargaining unit member in accordance with the terms of the 403(b) Plan. 8. After adoption of the 403(b) Plan, any administrative fees shall be borne by the 403(b) Plan participants. 9. If a teacher is entitled to Severance pay and/or retirement incentive pay and is not an eligible participant in the 403(b) Plan as set forth herein, that teacher will be eligible to receive in cash, any and all Severance pay and retirement incentive pay that the retiree is entitled to in accordance with this Article. However, the teacher may elect to defer any such payments to a tax-sheltered annuity that is tax qualified under Internal Revenue Code 403(b) (a TSA) as permitted by law and Board Policy.

Payment and Deferral of Severance Pay. A. Notwithstanding anything in this Agreement or Board policy to the contrary, in accordance with terms of this subsection and any related provisions of a plan document adopted by the Board to comply with requirements of Section 403(b) of the IRC, retiring bargaining unit members shall have the total amount that otherwise would be payable to them as severance pay under the above subsections of this Section 7.05 mandatorily paid into an annuity contract or custodial account that is designed to meet the tax-qualification requirements of IRC Section 403(b) (a “TSA”). For the purpose of this subsection, this arrangement is referred to as the “403(b) Plan”. The provisions of this subsection are effective for all retiring bargaining unit members: (1) members whose termination of employment is on or after June 30, 2006; (2) who retire and are thereby entitled to severance pay pursuant to the provisions of this Article; and (3) who is or will be age 55 or older in the calendar year in which the teacher retires. A “retiring bargaining unit member” is defined for this purpose as a bargaining unit member who is eligible for service retirement under ORC Chapter 3307 (or the provisions of some other Ohio public employee retirement system) and who actually service retires under that Chapter (or such other Ohio public employee retirement system) upon termination of employment with the Board. B. The terms of the 403(b) Plan shall include the following: 1. Participation in the 403(b) Plan shall be mandatory for any retiring bargaining unit member who is entitled to severance pay as set forth above in (A)pay. 2. An employer contribution shall be made on behalf of the retiring bargaining unit member under the 403(b) Plan in an amount equal to the lesser of: a. The total amount of the bargaining unit member’s severance pay under this Section 7.05. b. The maximum contribution amount allowable under the terms of the 403(b) Plan. 3. The required contribution to the 403(b) Plan shall be made within the timeframe described in subsection 7.057 7.056 regarding the payment of severance pay. 4. In the calendar year of retirement, or in any other calendar year, the total amount of severance pay that may be paid to a TSA under the 403(b) Plan shall not exceed the maximum contribution amount allowable under the federal income tax law for TSAs that are intended to be tax qualified under IRC Section 403(b). If the amount payable to the 403(b) Plan in any calendar year would exceed the maximum amount that is permitted under the applicable federal income tax law for that year, the excess amount shall be contributed to the 403(b) Plan on or before after the first payroll date in January of the next calendar year; and if there is still any remaining excess amount, the remaining excess shall be paid in cash to the retired bargaining unit member. 5. The Treasurer TSA that shall be used for the 403(b) Plan shall be the administrator group annuity contract of he 403(b) Plan, unless the Board delegates administration to a third partyAIG VALIC. The 403(b) Plan administrator shall be permitted to administer, interpret, and operate the plan as the plan administrator shall deem necessary for compliance with the IRC 403(b) and applicable regulations (including proposed regulations) and rulings thereunder. 6. A teacher who is a participant Participants in the 403(b) Plan shall be required to complete a 403(b) sponsor AIG VALIC enrollment package with any qualified group annuity contract selected by the teacher prior to retirementforms, and unless and until a teacher bargaining unit member does so, no contribution of Severance and/or incentive pay Pay shall be made to the 403(b) PlanPlan on behalf of the bargaining unit member. 403(bA successor company(ies) Contracts shall to AIG VALIC may be individual contracts owned selected at any time by mutual agreement of the 403(b) Plan participantsBoard and the Association. 76. If a retiring bargaining unit member is entitled to have a contribution paid to the 403(b) Plan and dies prior to such contribution being paid to the 403(b) Plan, the contribution shall nevertheless be paid to the 403(b) Plan and then be paid to a beneficiary of the bargaining unit member in accordance with the terms of the 403(b) Plan. 87. After adoption of the 403(b) Plan, any administrative fees shall be borne by the 403(b) Plan participants. 9. If a teacher is entitled to Severance pay and/or retirement incentive pay and is not an eligible participant in the 403(b) Plan as set forth herein, that teacher will be eligible to receive in cash, any and all Severance pay and retirement incentive pay that the retiree is entitled to in accordance with this Article. However, the teacher may elect to defer any such payments to a tax-sheltered annuity that is tax qualified under Internal Revenue Code 403(b) (a TSA) as permitted by law and Board Policy.