The temporary layoffs that are part of Executive Order 2009-22 will affect your Defined Benefit pension differently, depending on whether your employee group will experience multiple one-day layoffs with days of work in between or a string of consecutive layoff days.
Multiple One-Day Layoffs
Section 38.1e(1) of the State Employees Retirement Act says "A member's final average compensation shall not be diminished because of required 1-day layoffs."
Your pension is calculated based on the average of your highest three consecutive years of earnings with the state. This is called your final average compensation, or FAC. If your employee group experiences multiple one-day layoffs with days of work in between, the Office of Retirement Services will calculate your final average compensation using your rate of pay in effect on the days you are laid off as if you had worked on those days. Up to 240 hours of annual leave may also be included in your FAC amount, as long as your FAC period is the last three years of employment.
You will earn service credit for these hours as if you have worked those hours.
Consecutive Layoff Days
Section 38.1c of the State Employees Retirement Act defines a "designated temporary layoff" as a layoff "that does not exceed one month and has a fixed, predetermined, and announced recall date."
Section 38.1e(1) of the Retirement Act states that "The compensation used in computing the final average compensation for a period during which a member is in a voluntary or involuntary pay reduction plan A or on a designated temporary layoff shall include the value of the hours not worked calculated at the member's hourly rate or rates of pay in effect immediately before the applicable final average compensation period."
For example, if your three-year FAC period included six consecutive temporary layoff days, the Office of Retirement Services would go back and pick up six days immediately prior to the three-year FAC period to provide you with a full three years of compensation to calculate your FAC amount. Up to 240 hours of annual leave may be included in your FAC amount, even though your FAC period extended beyond the three years immediately preceding retirement.
You will earn service credit for these hours as if you have worked those hours.
Visit the Civil Service Commission website for a further explanation of any layoff provisions.
Published on May 20, 2009