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What the Post Employment Program is:
The PEP program allows you two unique ways to save taxes on your leave payouts. The two plan options are the VEBA Health Savings plan and the Special Pay plan. When you retire or leave County employment, you will be asked to make a PEP election.
The Special Pay Plan provides participants with an opportunity to contribute their eligible leave balances into a retirement plan that provides tax shelter on contributions and income earnings until the participant withdraws the fund in lump-sum or periodic payments. The VEBA Health Savings Plan is a health reimbursement plan that provides participants with post-employment health expense reimbursement that may be used for qualified medical, dental or vision out-of-pocket expenses.
Who is Eligible:
The PEP effects you if you have five or more years of service in a regular position and you are a member of one of the following bargaining units: Management, Confidential, Unrepresented, DDAA, LEMU, LIUNA* and SEIU* (excluding Court employees).
*LIUNA and SEIU employees' eligibility, leave balance payouts, forms and other guidelines differ. Please download the PEP packet for these bargaining units below for specific PEP guidelines that apply.
Leave payouts subject to the Post Employment Program (PEP):
The following leave types are required contributions to the Post Employment Program:
- Vacation Leave
- Holiday Leave
- Annual Leave
- Extra (or "X") Vacation
- 50% of your Sick Leave balance up to 960 hours (for retiring employees only)
Compensatory Time may not be contributed to the PEP and is paid out to employees as cash. If you wish to defer taxes on this leave payout, you may elect to defer this pay out to the 457 deferred compensation plan, subject to the maximum limits set by the IRS.
What you need to do:
When you retire, cease County employment or change to a position that is not eligible for leave accruals, you need to elect one of the following options:
- Contribute 100% of the value of your eligible leave accruals to the Special Pay Plan; or
- Contribute 100% of the value of your eligible leave accruals to the VEBA Health Savings Plan; or
- Contribute 50% of the value of your eligible leave accruals to the Special Pay Plan AND 50% of the value of your eligible leave accruals to the VEBA Health Savings Plan.
Once your account is set up, you will also have a choice of investment options for each plan. If you do not make a PEP election prior to the processing of your eligible leave balance accruals, 100% of the value of your eligible leave accruals will be contributed to the PEP's Special Pay Plan and no changes will be allowed.
Forms you will need to complete:
You will need to complete the Post Employment Program Election Form that requests the following information:
- Employee Information
- Enrollment Election
- Investment Selections
- Employee Signature
If you elect for all or a portion of your eligible leave balance accruals to be contributed to the Special Pay Plan, you will also need to complete a Beneficiary Designation Form.
If you elect for all or a portion of your eligible leave balance accruals to be contributed to the VEBA Health Savings Plan, you will also have the option to complete a Systematic Payment Form to begin automatic reimbursement from your VEBA Health Savings Plan for what you pay in premiums. You may also complete this form once you receive your welcome packet from the Third Party Administrator of the VEBA Health Savings Plan, REHN & Associates.
If you will be electing to defer your Compensatory Leave into your 457 (Nationwide and/or VALIC) deferred compensation account, you will also need to complete the Deferred Compensation Form included in the PEP packet.
When you can access your money:
You can take a distribution from or roll your Special Pay account into another qualified plan as soon as your account is set up. Usually this is just a few days after your last day of employment.
To withdraw funds from the VEBA Health Savings Account, you must submit receipts for qualifying medical expenses and you will reimbursed.
Where to get additional information:
To assist you in understanding your PEP program, meetings have been scheduled to help you decide which option works best for you. These informational meetings will provide an overview of the Post Employment Program and explore the two plan options in detail. If you are planning to retire or planning to leave County employment in the next year, please consider attending on one these informational meetings. See below to access information on dates and times for upcoming PEP meetings.
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