Local 3141 - Department of Revenue

Severance Pay Language

Section 8. Severance Pay. All employees who have accrued twenty (20) years or more continuous State service shall receive severance pay upon any separation from State service except for discharge for cause. Employees with less than twenty (20) years continuous State service shall receive severance pay upon retirement at or after age 65; death; or layoff, except for seasonal layoffs. Employees who retire from State service after ten (10) years of continuous State service and who are immediately entitled at the time of retirement to receive an annuity under a State retirement program shall, notwithstanding an election to defer payment of the annuity, also receive severance pay.

Employees who separate from State service with twenty (20) or more years of continuous State service and are eligible to receive severance pay will have one hundred percent (100%) of severance pay converted to the MSRS administered Health Care Savings Plan (HCSP). Employees with less than twenty (20) years of continuous State service who are eligible to receive severance pay upon retirement or retirement at or after age sixty-five (65) will have one hundred percent (100%) of severance pay converted to the MSRS administered Health Care Savings Plan (HCSP). At the time of separation, if the employee has been approved exemption from participation in the HCSP from the plan administrator, then the employee will receive any payment due in cash.

Employees who do not meet the criteria for the HCSP or whose severance payouts total less than five hundred dollars ($500) will continue to receive such payments in cash. However, Unit 2 employees whose combined vacation and severance payouts are less than five hundred dollars ($500), will receive such payments in cash. The MSRS administered Health Care Savings Plan (HCSP) does not apply to permanent or seasonal layoffs. In the case of the death of an employee, severance payment shall be made in cash.

Severance pay shall be equal to forty (40) percent of the employee's first nine hundred (900) hours of accumulated but unused sick leave, and twelve and one-half (12 1/2) percent of the employee’s accumulated but unused sick leave in excess of nine hundred (900) hours, times the employee’s regular rate of pay at the time of separation.

Employees who have been laid off and received severance pay and are reappointed to State service are eligible for additional severance only if they meet the continuous State service requirement.

Employees who have received severance as a result of continuous State service and are reappointed to State service, are eligible for additional severance upon separation. Severance for eligible employees returning to state service shall be computed upon the difference between the amount of accumulated but unused sick leave restored to the employee’s credit at the time the employee was reappointed and the amount of accumulated but unused sick leave at the time of the employee’s separation.

Such severance pay shall be excluded from retirement deductions and from any calculations in retirement benefits and shall be paid over a period not to exceed two (2) years from termination of employment. In the event that a terminated employee dies before all or a portion of the severance pay has been disbursed, that balance due shall be paid to a named beneficiary or, lacking same, to the deceased's estate.

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