10.03.02 Employees Must Be Active Members to Participate in TDP

Employees must be active members in order to participate in a tax-deferred payment (TDP) agreement. In other words, they must be currently working for and being paid by your reporting unit. Employees remain active while laid off for a maximum of one year or on an approved leave of absence as long as an employee-employer relationship exists and as long as the employee has earned service credit in the past two years. See section 3.01.02: Extended Leave of Absence (More Than Two Years). Substitute, part-time, intermittent, and temporary employees are considered active members only on the actual days they work. If you allow substitute, part-time, intermittent, or temporary employees to participate in the tax-deferred payment plan, a TDP agreement can only be initiated on a day that the employee is actually working for your reporting unit. An “on call” employee is not considered an active member. A substitute, part-time, intermittent, or temporary employee is an employee who:

  • Does not work every pay period, but works intermittently; or
  • Does not work a full year; or
  • Works part-time for multiple employers; or
  • Is terminated at the end of each day.

Last updated: 08/25/2015