FAQs
For highly paid staff, do all earnings count toward the benefit increase calculation?
11/30/2021
When negotiating termination or retirement agreements with individuals, either to induce an individual to leave the University, or to encourage him/her to stay, the following should be considered:
- Purchase of service credit is not considered earnings and will not impact the 6% calculation.
- Severance or separation payments are not considered earnings and will not impact the 6% calculation.
- Retirement incentive payments are not considered earnings and will not impact the 6% calculation.
- Base salary increases count toward the 6% rule.
Generally, payments that are directed toward increasing an employee's retirement annuity post-retirement are subject to the 6% rule. Lump sum incentive/separation payments are not.
