As we enter peak season for new retirements, the ASRS wants to emphasize the importance of following the correct processing of termination pay for employees who have an agreement to use termination pay toward their service purchase.
If a member has made an irrevocable election to use termination pay, the IRS requires the employer to send the termination pay directly to the ASRS, pre-tax. Termination pay is due upon the member’s termination of employment whether the member is retiring or not.