Common use of Terminal Pay Supplement Change Clause in Contracts

Terminal Pay Supplement Change. A 401 (a) matching annuity program replaces the Terminal Pay Supplement plan beginning with the 2003-04 contract. The Terminal Pay Supplement plan is retained as Appendix G for future reference as needed to fulfill the provisions of this article. As used in this section, “matching annuity program” shall apply to any such program that satisfies the IRS definition of a qualifying 403(b) plan. Existing teachers’ terminal pay supplement amounts will be calculated on June 30, 2003, and will be paid upon retirement following the guidelines listed below. SB199 pension bonds will be sold to fund the old terminal pay supplement unfunded liability. The proceeds from the pension bonds will provide these teachers with a predetermined severance amount upon retirement. The teacher’s amount will be the accumulated number of unused sick days (maximum 160 days) at $50 per day on that date and the number of years experience at the end of the school year 2002-03 at $250 per year (maximum $7,500). Teachers must qualify under all terms of the Terminal Pay Supplement (Appendix G) to collect the severance pay upon retirement. The Section C Benefits Distribution paragraph 1 language is changed: The retirement severance pay amount will be a one-time payment upon retirement either as a cash settlement or a roll-over into an annuity program of the teacher’s choice. The sick day benefit will continue to accumulate as per Article VI, Leaves, Section G, Sick Leave, but the accumulated days above the amount frozen on June 30, 2003 will not have a severance pay value at retirement time. There will be a one-time buy-out option for teachers who had five or more years of service with the TCSC on June 30, 2003 for the $250 per year (maximum $7,500) of service at the discounted value. If the teacher elects this option, the corporation will transfer this amount into the teacher’s corporation annuity plan. Teachers will have until September 30, 2003 to select the buyout program.