2003 Session

Budget Amendments - HB1400 (Member Request)

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Chief Patron: Tata
Special Pay Plan

Item 511 #5h

Item 511 #5h

First Year - FY2003 Second Year - FY2004
Central Appropriations
Central Appropriations FY2003 $0 FY2004 ($202,447) GF

Page 476, line 26, strike "($16,723,273)" and insert "($16,925,720)".
Page 480, after line 23, insert:
"M.1.  The Department of Human Resource Management shall implement an Internal Revenue Service approved Special Pay Plan that is qualified under section 401(a) of the Internal Revenue Code for separating state employees.  The Special Pay Plan implemented by the Department of Human Resource Management shall be limited to employees age 55 or older whose annual leave payment upon separation from state service totals $2,500 or more.  Special pay for this program does not include sick leave payments or disability credits in the Virginia Sickness and Disability Program.  The Department of Human Resource Management may promulgate any regulations necessary to implement these provisions.    
3.  The Department shall seek written proposals for the necessary services and programs to implement the plan including investment options and administrative services from any entity  authorized to provide such services.  The Department shall consult, as needed, with the Virginia Retirement System as to the design and objectives of the Plan.  In evaluating these proposals, the Department shall consider the expertise and experience of those submitting the proposals as indicated by the number of Special Pay Plans the offeror currently has in effect, the number of years offering such plans, and the cumulative assets under management in such plans.  In developing the Plan, the Department is authorized to adjust the minimum amount required for participation based on input from employees or to address unexpected hardships.
4.  The Plan shall provide permanent savings for all separating state employees participating in the Special Pay Plan of no less than the lesser of 7.65 percent or the FICA percentage applicable to all annual leave payments subject to the Plan.  Separated state employees who request and are entitled to an immediate distribution from the Plan shall be guaranteed payment of the entire amount of  Special Pay, plus earnings, and less any mandatory income tax withholding no more than seven days from the date payment is made to the Plan on behalf  of the separated state employee.  The amount reimbursed from the Plan subject to the seven day requirement shall not be reduced for any administrative or investment expenses."

(This amendment establishes a special pay plan as qualified by the Internal Revenue Service for separating state employees who will receive a payment for annual leave of $2,500 or more.)