Transcript Overview Bencor Special Pay Plan

Overview
Bencor Special Pay Plan
For Employees of the School
District of Lee County
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Introduction
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BENCOR NATIONAL GOVERNMENT EMPLOYEES
RETIREMENT PLAN™ (BENCOR Special Pay Plan)
Offered by BENCOR, Inc.
Allows governmental entities and their
employees to take maximum advantage of the
Federal tax laws.
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Eligibility
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Must be administrative, supervisory-technical,
confidential, or instructional employee.
Must be eligible for accumulated sick leave pay
and/or annual leave pay from the School
District of Lee County.
Must be retiring, terminating or enrolled in
DROP.
Must have accumulated sick and annual leave
equal to $1,000.00 or more.
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Eligibility
 Accumulated
sick leave pay and
annual leave pay of employees
who retire, terminate
employment, or enter into the
DROP program will be placed into
the BENCOR “Special Pay Plan”
subject to contribution limits.
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Contribution Limits
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In the last year of employment, the Maximum
Plan Contribution cannot exceed 50% of the
Plan Year Compensation* or $51,000, whichever
is less.
*Plan Year Compensation=Wages for the previous
12 months + Accumulated Sick Leave Pay +
Accumulated Annual Leave Pay (“Special Pay”)
that is to be paid in that year.
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Plan Trustee
Reliance Trust Company
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Plan Sponsors
 Diversified/Transamerica
 BENCOR,
Inc.
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Plan Administrator
 BENCOR
 Toll
Administrative Services
free number: 1-888-258-3422
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Investments
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Diversified/Transamerica offers 17
investment options.
Special Pay Plan contributions are
automatically placed in a fixed account
(Guaranteed Pooled Fund) and can only
be invested in other accounts in
accordance with the participants’
instructions.
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Investment Expenses
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No fee charged for contributions that
remain in the Guaranteed Pooled Fund
(i.e. fixed) Account option.
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Distributions
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Distributions may be taken upon:
1) Termination of employment
2) Total disability
3) Death
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Distributions
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The participant may choose to leave
money in the Plan, self-directing future
investments and taking distributions as
desired in a tax-deferred manner.
Distributions may be taken in a lump
sum or as periodic payments taken
monthly, quarterly, semi-annually, or
annually.
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Distributions
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To receive a distribution, the participant
must complete a DISTRIBUTION/LOAN
REQUEST FORM. A distribution packet is
available from BENCOR Administrative
Services at 1-888-258-3422.
Distributions will be processed in a timely
manner with minimal waiting (once
BENCOR receives the money from the
District AND the distribution request form
has been submitted).
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Distributions
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Participants (or surviving spouses) can
“roll over” Plan Assets into an IRA or into
another qualifying plan after termination
of employment from the School District of
Lee County.
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IRS Penalties
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There is no IRS penalty for any
Plan participant age 55 or older who
elects to withdraw plan funds
provided the participant separated
from service during the calendar
year in which he/she turned age 55,
or later.
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IRS Penalties
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Plan participants who separate
employment before the calendar
year in which they turn age 55
and who elect to withdraw Plan funds
prior to age 59 ½ are subject to a
10% early withdrawal penalty by
the IRS.
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IRS Penalties
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The School District will “make whole”
(subject to applicable withholding
tax) participants who are subject to
this penalty if they request all of their
funds from the Plan Administrator
within 60 days of termination of
employment with the School District
of Lee County.
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Excess Sick and Annual Leave
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Any eligible sick leave or annual (vacation)
leave in excess of plan contribution limits
will be paid to the participant, subject
to Federal withholding and related payroll
taxes (Social Security and Medicare).
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Employee Responsibilities
1) Complete BENCOR/Diversified/Transamerica enrollment
form *
a. Select account(s) (if not previously
selected)
b. Identify beneficiaries
2) Forward completed form to BENCOR
3) Retain packet and all pertinent information
* Note: If no selection is made, eligible dollars will automatically be paid
into the Guaranteed Pooled Fund (Fixed) Account.
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End Part I
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BENCOR
Calculation Example
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BENCOR Calculation
Information Needed
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Plan Year Salary (July 1 – Term. Date)
Hourly Rate
Base salary + Degree Supplement
divided by hours worked per year
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Final Sick Leave Balance (In Hours)
Final Annual Leave Balance (In Hours)
Payment % Eligibility
(12+ Years at Lee County School Board = 100%)
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Sample Data
John Anderson is a teacher with a Master’s degree
and 30 years of experience at the Lee County
School Board.
He is retiring on May 30, 2013.
At May 30, 2013 he will have 1,500 hours of
unused sick leave. He does not earn annual leave.
His 2012/2013 plan year salary includes a base
salary of $ 49,833, a Master’s degree supplement
of $ 2,500, and various other supplements totaling
$ 2,667.
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BENCOR Calculation Example
• Plan Year Salary = $55,000
Base salary + Degree Supplement + Other Supplements
$ 49,833
$ 2,500
$2,667
• Hourly Rate = [($49,833 + 2,500) divided by
(7.5 x 196 days)] = $ 35.60 /hr.
• Sick Leave Balance = 1,500 hours
• Payment % Eligibility (12+ Years at Lee County
School Board = 100%)
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Calculation of
Sick Leave Pay-off
Sick Leave Balance
1,500.00 hrs
Payment Percentage
x
100%
1,500.00 hrs
Hourly Rate
Equals: Sick Leave Pay-off
x _ $ 35.60
$ 53,400.00
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Calculation of
Plan Year Compensation
Plan Year Salary
$ 55,000.00
Sick Leave Pay-off
+ 53,400.00
Equals: Plan Year Compensation
$ 108,400.00
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IRS Limitations
Maximum Contribution to BENCOR
for the 2013 Plan year is the lesser of:
$51,000
or
50% of Plan year Compensation
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Calculation of Actual
BENCOR Contribution
50% of Plan Year Compensation
$ 54,200.00 (1)
IRS Limit
$ 51,000.00 (2)
Sick Leave Pay-off
$ 53,400.00 (3)
Actual BENCOR Contribution
$ 51,000.00
(Lesser of 1, 2 or 3)
Note: If sick leave pay-off is less than $ 1,000
no contribution will be made to BENCOR.
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Calculation of Remainder
of Terminal Pay
Accumulated Sick Leave
$ 53,400.00
Less: BENCOR Contribution
$ 51,000.00
Remainder of Terminal Sick Leave
paid directly to Employee
$ 2,400.00
Note: Applicable Income and Social Security Taxes will be
deducted from the remainder portion paid directly to
the employee.
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End Part II
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