1807 - Leave Buy-Back, Option to Transfer to Savings Plus 401(k) Plans Enhancement for Fiscal Year 2023/24 (Historical View)

Status: Active

Change Notes

Policy Created.

Category

Savings Plus

Audience List

• Human Resources Analysts
• Personnel Officers

Synopsis

The current Leave Buy-Back Program (Program) is being enhanced to allow excluded employees with vacation or annual leave balances in excess of 640 hours, as of December 1, 2023, the option to transfer future leave accruals into a Savings Plus 401(k) Plan account.  The Program will allow excluded employees the option to transfer the number of leave accruals elected into Savings Plus, take as a cash payment, or a combination of the two.  For the purpose of this new option, eligible leave is either vacation or annual leave.

Introduction

This enhancement provides the following benefits: (1) if electing the pre-tax option, allows employees the opportunity to reduce their future leave accruals without increasing their taxable income, (2) reduces the state’s long term liability by paying out leave accruals at the employees’ current salary instead of at a potentially higher rate at retirement, (3) increases employees’ retirement savings without impacting their net pay, and (4) increases employees’ retirement savings by investing the assets now, allowing time for potential market growth prior to retirement.

Statement

To participate in the Savings Plus option, all eligible employees wanting to participate must complete the irrevocable Transfer Future Leave Accruals to Savings Plus Request form (CalHR form 271).  Employees must submit the completed form to their department Human Resources office by December 31, 2023.  Refer to the Resources section below for a sample email to announce the Program enhancement to your excluded employees.

Employees may elect to transfer up to the number of hours they accrue during the January through May pay periods, not to exceed 80 hours (likely 160 hours for bargaining unit 2).  However, the actual number of hours converted will be subject to the number of hours approved by the state and authorized by each department. If the Program is not offered, the form becomes null and void and the employee’s leave accruals will be available for use.  If the Program is offered for an amount less than the employee elected, the lower amount of hours will transfer to Savings Plus based upon the following hierarchy: (1) 401(k) pre-tax, and (2) 401(k) Roth, in accordance with the employee’s election until each plan and deferral type is satisfied.  Excess leave accruals will be available for use.

If departments are authorized to participate in the Program, employees may elect to receive the cash value for any excess leave accruals not already allocated to transfer to Savings Plus (up to the total hours authorized by the department).

Application

Authorities

Resources

Authorized By

Chief Savings Plus Division
Chief, Savings Plus Division

Contact Person

Chief Savings Plus Division
Chief,
Phone: 916-324-4055
Email: SPPTraining@calhr.ca.gov

Superseded Policies