2019-2020 Employee Handbook

Terminal Pay/Benefits Plan, Full-Time Employees

This program helps retiring or voluntarily terminating full-time employees avoid paying some taxes and defer the payment of other taxes on money paid for sick and annual leave payouts. See Board Policy 6.15 – Terminal Pay.

  • When a full-time employee retires or voluntarily terminates, payment made for accrued sick and annual leave will be deposited into an annuity account in the name of the employee. A minimum threshold amount of $2,000 will be required to trigger this deposit. The deposit made on behalf of the employee begins to earn interest as soon as it is deposited to the individual’s annuity account.
  • The deposit to the annuity is made pre-tax. No deduction is made for Social Security, Medicare, or withholding (income tax). The employee’s Social Security and Medicare contributions on these payments are permanently avoided.

The employee pays income taxes when the funds are withdrawn from the account. The interest earnings are also tax-deferred, and income taxes are not due on the principal or interest until money is withdrawn from the account. Bencor Inc. administers the plan. For more information, look at Inside.cf.edu, Employee Benefits, and select Bencor Special Pay Plan or contact the coordinator of benefits and special projects at 352-854-2322, ext. 1290.