Number: Policy Memo 106
Date Issued: June 5, 1998
Policy File Ref: A1140
Subject: Retirement Sick Leave Credit
Determine the correct method of calculating the sick leave credit.
Retirees are entitled to have the value of their sick leave used to offset the cost of retiree health insurance. Recently, we have become aware that various methods have been used to calculate the amount. Most of these variations have resulted from different interpretations of the terms used in calculating the credit. For instance the term "daily rate of pay" has not been defined in the HBA manual, so some have based their calculations upon gross pay and others upon base annual salary, or total annual salary. In addition, we discovered that the sick leave calculation for part-time employees was not always done correctly by HBAs. It became clear that the method of calculation needed to be simplified and defined within the context of the Civil Service Law.
The formula for calculating the sick leave credit will be:
Step 1. Determine the Hourly Rate of Pay (HRP). The Hourly Rate of Pay is determined by dividing the total annual salary (basic annual salary plus additional constant salary factors such as location pay, shift differential, geographic differential, and inconvenience pay as defined in the State Payroll Manual, page 32) at the time of retirement by 2088 for jobs which are normally 8 hours a day and 1957 for jobs that are normally 7.5 hours a day. For employees who are paid on an hourly basis, use the hourly salary as the Hourly Rate of Pay.
Step 2. HRP x Hours of Sick Leave (1320 maximum) = Sick Leave Dollar Value (SLDV)
Step 3. SLDV / Life Expectancy in Months = Monthly Sick Leave Credit (MSLC)
Example for 62 year old employee who worked in an eight hour a day job with annual salary of $54,677 who has 300 hours of sick leave:
Step 1. $54,677 / 2088 = $26.19 HRP
Step 2. $26.19 x 300 (hours of sick leave) = $7857 SLDV
Step 3. $7857 / 216 (life expectancy in months) = $36.38 MSLC