Unused Sick Leave

Unused sick leave can be cashed out and deposited into your MERP account or City of Seattle VEBA account. Funds in these accounts can be used only for IRS-qualified medical expenses. Click here for a complete list of eligible expenses.

The schedule for converting unused sick leave is as follows:

• Hours 0 to 400 are cashed out at 25% of the value of your unused sick leave hours
• Hours 401 to 800 are cashed out at 50% of the value of your unused sick leave hours
• Hours above 800 are cashed out at 75% of the value of your unused sick leave hours

Note that this benefit is available only to retirees.

For more information on cashing out unused sick leave and depositing the funds into your MERP, as well as using the funds to purchase additional ASUs, see the following pages and documents on the IAFF MERP website:

• Newly Eligible Retirees (webpage)
• Bulletin Regarding Lump Sum Transfer Election (pdf)
• Cover Letter for Lump Sum Transfers (pdf)
  
  You can also contact the Trust Office if you have questions.

Visit the City of Seattle Voluntary Employee Benefit Association (VEBA) website page to learn more about cashing out unused sick leave and depositing it into a City of Seattle VEBA account. The city’s VEBA program is managed by the HRA VEBA Trust. Visit HRAveba for additional information about the program.

If you want to take advantage of this option, email Christa Williams (christa.williams@seattle.gov) in the city’s Payroll department. Include your planned retirement date and a note stating that you want to cash out your unused sick leave and have the funds deposited in your City of Seattle VEBA account. You cannot cash out your unused sick leave and deposit a portion of the funds in your MERP account and the remainder in a City of Seattle VEBA account. You must choose one option or the other.

Unused Merits

Unused merits are cashed out at your rate of pay at the time of separation, not at the rate of pay when the merits were earned. You can choose to have your cashed-out pre-tax merit pay deposited into your Deferred Comp 457 plan. Note that the plan’s annual contribution cap still applies, so the amount you can transfer depends on how much you’ve already contributed.

How will my merit leave cash out be reported to the DRS?

The City of Seattle reports your merit leave cash-out (the number of hours and the corresponding compensation) to the DRS, along with the month and year the merit leave was earned, starting with the most recent. The file containing this information is sent to the DRS monthly. It takes four to eight weeks after separation for the city to send the file to the DRS with the merit leave redistribution, depending on your last day of employment and when the cash out is processed. If the information sent by the city changes your high-five calculation, the DRS will recalculate and adjust your high-five number, then send you any underpayment of pension due. The DRS calculates your high-five (not the city)—all questions regarding your high-five and pension calculation should be directed to the DRS.

Unused Vacation Hours

Unused vacation hours will be paid at your rate of pay at separation. Vacation days are earned in the year you work for the following year, so the date you retire will determine how many vacation days you are owed. For example, if you separate in June, half your annual vacation accrual will be added to your accrued balance and paid to you at separation. Note that the plan’s annual contribution cap still applies, so the amount you can transfer will depend on how much you’ve already contributed.

You can choose to deposit your cashed-out vacation pay into your Deferred Comp 457 plan.