Early Out Retirees and Sick Leave Payments for 2007

Many state employees who retired under the 2002 Early Out program agreed to receive their sick leave payout in up to 59 installments on the first regular pay date of the month (about every four weeks).

Dates for 2007 early out sick leave payments are as follows:

EFT vs. Warrant

If you prefer to receive your sick leave payment with a paper warrant, please send us a letter requesting the change. Specify that this is for your sick leave payment, include your social security number, and be sure to sign the request.

If you like the EFT payment but prefer to send it to a different financial institution, please complete the Electronic Fund Transfer application. Be sure to write sick leave payment on the application, so we know to make the change only to your sick leave payment and not your regular pension.

Taxes

Regular pension payments are free from Michigan and local taxes. But unlike a pension, your sick leave payments are work related and as such, are fully taxable. To simplify processing, your payout tax status and withholding were set up to match the status and withholding at the time you retired. While you may change your tax status for sick leave payments, there are two significant limitations.

1. You cannot claim exemption from federal tax.
2. You cannot change your tax status or withholding amount for local taxes. City taxes will continue to be withheld based on your residence and your work location at the time you retired. You cannot change your tax withholding for these payoffs after you retire.

To change your tax status, the number of exemptions you claimed, or the amount of withholding for a sick leave payment, please use a standard IRS W4 and/or a Michigan MI-W4 form.

Address Changes

ORS manages your pension payments, but does not manage your sick leave payments. When you change your address for your pension, we cannot automatically change your address for your sick leave payment. You must send us a signed written request to change that address. Be sure to write sick leave payment on your request and include your social security number. We cannot process this request by telephone.

Need Help?

Please contact us. The ORS staff is happy to help with your retirement in any way we can and will do our best to resolve any sick leave payout questions you might have. However, your sick leave payout is managed by the agency you retired from in conjunction with the Office of Financial Management. We may need to refer you to another agency to resolve your specific questions.