Saturday, March 19, 2016

Termination Pay Or Terminal Leave? - What You Should Know.




























One of the options at retirement that teachers have is to "cash in" their available sick days by either applying for termination pay or terminal leave.  In both cases for every 2 sick days, 1 day is credited.  This is commonly known as "2 for 1".  For example if the teacher has 100 sick days in their Cumulative Absence Reserve (CAR), they are credited with 50 days of pay if taken as termination pay or 50 days of service for terminal leave.  Here are some of the things you need to know before you make that decision.

Termination Pay:

If you decide to take termination pay, you will receive three lump sum payments annually for a total of one half the days you had in your CAR at the time of retirement or resignation/termination. To apply for termination pay you need to download the form from the DOE website or ask your payroll secretary for form OP44, if you are a rotating ATR or were terminated and the school is uncooperative, then please call Amy Arundell at UFT headquarters and she will assist you in obtaining and completing the form.  You must submit the  QP44 form at least one month (30 calendar days) before asking for termination pay.

The OP44 form is essential since the DOE will not automatically pay you for your available CAR days without a completed form and you don't want the DOE to keep your money.

Finally, you will need to pay income and Social Security taxes on the year that you receive the lump sum payment.  However, the payments will not affect the earnings limitations on either NYS public employment or Social Security.

Terminal Leave:

You are allowed to go on leave before officially retiring and use up half of the days in your CAR.  If you decide retiring is not for you, then, as long as you still have days remaining in your CAR, you can get your position back with the remaining CAR as the starting point.  However, there are some limitations that one needs to know before choosing the terminal leave option.

Terminal leave cannot extend beyond one semester.  Any remaining CAR will automatically be converted to termination pay. Moreover, You must decide by May 31st if you take terminal leave in the second semester (February) to rejoin the workforce, otherwise, your decision is irrevocable and you will be considered retired.  The same goes for the first semester (September), if you do not return to service by December 31st, you are considered to have retired.  You cannot apply to be reinstated in either January or June.  To return to service you must contact the DOE and UFT since an application must be filled out before you can begin working again. Once your CAR is exhausted, your terminal leave is over and you will have officially retired.  Remember, you must submit your QP40 form at least one month (30 calendar days) before you apply for terminal leave.

If you become ill during your terminal leave period, contact the DOE and UFT and apply to have your terminal leave converted to sick leave, subject to the approval of the medical bureau. Finally, there is no limitation to how many times you can take terminal leave, providing you have the available CAR days in your bank.

During the time you are on terminal leave you will be considered an active member with full pay and benefits as well as accumulating CAR days,  pension credits, and still contribute to the TDA.  If you decide to take terminal leave during the second semester and intend to retire, you can send a check to the Teacher's Retirement System to fully fund your TDA for the rest of the year.  For example if you are allowed to contribute $24,000 to the TDA but only will contribute $18,000, then before June 26th send a check for $6,000 to TRS to fully fund your annual TDA contribution.  The one limitation is that you must have made at least $24,000 to take advantage of this.  Otherwise, you are limited to the earned income made before you take terminal leave.  Finally, once you retire there are no TDA contributions allowed.

 Form QP40 is available online from the DOE website or the payroll secretary.  For rotating ATRs who are unable to obtain the form,  contact Amy Arundell at UFT headquarters and she will assist you in applying for terminal leave.

Whether you choose termination pay or terminal leave, remember the DOE can and does reject applications for either if you don't complete the QP44 or the QP40 forms at least one month before you retire.

Note:  If you decide to come back under terminal leave, you will be placed in the ATR pool, unless your Principal requests you back and excesses another, less senior, teacher.


79 comments:

  1. Anonymous8:45 PM

    chaz, thanks for clarifying how the two programs work. I was always confused why some people took one or the other. Now I understand the difference and which mode of payment is best for me. Terminal leave, here I come in 2018.

    ReplyDelete
  2. Anonymous9:58 PM

    Our principal frowns on teachers returning from terminal leave to resume work. I really don't think she has the right to do this, but all the teachers retiring are afraid to go against her.

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  3. Anonymous11:27 PM

    What if your anniversary date is Nov? Can you do terminal leave for the start of fall? When do you have to give notice that you want to do terminal leave for the fall?

    Also, have you heard about the rumors that the state may offer tiers 1,2,3 an incentive to retire? I don't know if the city or teachers are involved, but legislation is back in the Assembly.

    ReplyDelete
  4. Anonymous10:24 AM

    Chaz, I plan to retire in a few years, God willing. I hope to have near the maximum 200 days by then. My anniversary date is October 1. October 1 is when I will have the 25 years completed as part of my 25/55 plan. My question is do I have the option of taking both Termination Leave and Termination Pay? In other words, Can I finish up in June a few months shy of my 25 years of service, get my summer checks, and use 20 or so Termination Leave Days for the month of September following to hook me up to my 25 years of completed service on October 1. Then, after October 1, begin getting Termination Pay for my remaining 80 days of CAR credit? Please advise. Thanks

    ReplyDelete
  5. Anonymous10:43 AM

    Terminal pay is usually better because you get pension checks and car checks at same time. Terminal leave gives u full pay, added pension time, and tda contributions. It is only a clearly better deal if it takes u to a qualifying event. Am I missing something?

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  6. Yes. If you want both, you can apply for terminal leave in June and start it in September and officially retire after October 1st and receive the rest of your CAR as termination pay in three yearly lump sums.

    ReplyDelete
  7. Anonymous4:45 PM

    Do you have to be 55 at the beginning of terminal leave? For example, I turn 55 the end of October 2018 (I currently have 165 days in my CAR) and am in my 30th year. Can I begin terminal leave in September 2018 when I am 54 (with enough days to retire well after my 55th birthday) or do I have to take it starting after I turn 55 in October 2018?

    Also, must you begin terminal leave at the beginning of a semester? I recall a colleague who took terminal leave in the middle of the term (I could be wrong, however...)

    This was very informative. Thanks!

    ReplyDelete
  8. Anonymous5:11 PM

    I'm never going to make it until 2022 (when I turn 62) but G-d willing, I'm going to try to make it until 2020. Would it be better to return in the fall of 2020 to get some more time under my belt, and then take terminal leave during the 2nd semester of the 2020-2021 school year to get more time? I figure we'll get the last of the retro (hopefully) then and it will pad up my income enough to make up for the penalty.

    This is indeed very informative- I always thought I'd want to get paid for the unused CAR days, but lately I've changed my mind.

    ReplyDelete
  9. No, you can be 54 as long as you reach your 55th birthday by the end of your terminal leave.

    You can take terminal leave at anytime of the school year.

    ReplyDelete
  10. Anonymous5:33 PM

    If anyone is apply for OP44 or OP40, you must submit it 30 calendar days before you want your termination leave/pay is to begin. I know people who did not give their 30 calendar day notice and the DOE reject their application.

    ReplyDelete
  11. Anonymous5:48 PM

    Can you take terminal leave to furfill 25 years if not 55 and wait?

    ReplyDelete
  12. Anon 5:33

    Thanks, I forgot to state that in my post and have since corrected it.

    ReplyDelete
  13. Anonymous7:39 PM

    30-days: School calendar or real calendar?

    ReplyDelete
  14. 30 calendar days, not school days.

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  15. Anonymous7:20 AM

    if you are not 55 years of age can you take terminal leave for years of service ?

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  16. Anonymous10:50 AM

    How do they calculate how much you make per day? I've never understood that and it always seams way off. Thanks.

    ReplyDelete
  17. Anonymous11:50 AM

    If the formula for your termination pay 1/2 of your car, does each day equal your annual gross divided by 180? Also, is it the average daily salary of your whole career or your FAS? Finally, if I retire on Oct 1st, wouldn't terminal pay for the month of Sept be simply me paying my own salary? Thanks in advance!

    ReplyDelete
  18. Anonymous2:41 PM

    If you take terminal leave for say 50 days, do holidays counted against the 1/2 car? Such as Jewish holidays in Sept, etc? Thanks!

    ReplyDelete
  19. Anon 10:50

    It depends on your Final Average Salary at the time you take terminal leave.

    Anon 11:50

    Its calculated as 1/200, which the union won as a grievance back almost twenty years ago. As for the other, its your FAS.

    Anon 2:41

    Holidays do not count, its 50 days when school is in session.

    ReplyDelete
  20. Anonymous8:01 AM

    Thanks Chaz. Does the 1/200th of your yearly salary formula also work for days docked?

    ReplyDelete
  21. Anonymous9:26 AM

    In this anti-teacher climate, for the life of me I cannot understand why anyone would stay after the age of 55. I plan on retiring at 55 even though I will only have 18 years in. I'll have my health benefits and around $1000 a month for life. I do not want to stay and deal with petty tyrants masquerading as 'leaders.' Students are cellphone addicts now with the lowest level of respect I have ever seen.

    What is the price of your health and well-being? Use your working years to get alternative income in place. With full health benefits and a guaranteed $1000-$2000 a month, depending on your years in at 55, how can you not get yourself set?

    I need lots of money, you say. Downsize now in your working years. Save and invest. Sell your superfluous junk. Make financial goals. Pay off debts. Sell the big house for a co-op. Whatever you can do, just don't let yourself become a shriveled up, broken retiree at 60, 65 or 70 who is cash rich but on death's door with years of regret. All we have is time, and it is running out. What price is your sanity?

    ReplyDelete
  22. Anon 9:26

    Try to finish your 20th year. Your pension goes up by almost 10%, not including the raises for the extra two years. Moreover, your pension hit at 55 would be 28% while at 57 it would be only 22%.

    ReplyDelete
  23. If terminal leave carries me to the end of Fall semester (Jan. 31, 2018), are you saying I may contribute money to my TDA for the remainder of 2018, although I will retire? My 55 birthday is Jan. 17,2018, but I wanted to retire at the end of Jan. 2018 so I may receive July pay.

    ReplyDelete
  24. Yes, but only if you send a check to TRS for your 2017TDA contribution by January 31st.
    Once the semester is over, you will be considered retired and no TDA contribution is allowed.

    ReplyDelete
  25. Anonymous4:11 PM

    Chaz, your retirement and pension articles are very informative and I have learned quite much from them. I look forward to your next article, maybe on what pension max is and is it good idea?

    ReplyDelete
  26. Anonymous11:56 AM

    For the person with 18 years push it out to 20 years. At 18 it is 1.67 for 18 years. 20 will be 2.oo. For 20 years push it out. Don't take less than you are owed

    ReplyDelete
  27. I am currently contributing 24,000 to the TDA annually. If I start terminal leave in September of 2016 and finish terminal leave in January of 2017, only approximately 12k (5 months worth) will have been taken out from September 2016- January 2017. How much more can I send to the TDA?

    ReplyDelete
  28. I am currently contributing 24,000 to the TDA annually. If I start terminal leave in September of 2016 and finish terminal leave in January of 2017, only approximately 12k (5 months worth) will have been taken out from September 2016- January 2017. How much more can I send to the TDA?

    ReplyDelete
  29. Here is the issue. The TDA is for a calendar year not the school year. Therefore, unless you state otherwise, the TRS will take out only $2,000 for the two January checks, the 15th and 31st checks. While you can theoretically contribute $24,000 for the year, you would need to send a check to TRS before you are off payroll to add to your TDA.

    In other words, you would need to sent the TRS a check for $22,000 if you want to fully fund your TDA for the 2017 calendar year.

    ReplyDelete
  30. Can I send the TRS the 22K to fully fund 2017? It seems like a GREAT deal, earning 7% fixed in the TDA instead of getting nearly nothing in a savings account. Also, am I correct when I say that by taking terminal leave in January of 2017, instead of retiring in June of 2016, essentially I am putting approximately an additional 36k in the TDA which earns 7%. That seems like a terrific perk of terminal leave vs, termination pay. THANK YOU!!!!

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  31. Based upon the rules your conclusion is correct.

    ReplyDelete
  32. One more thing (and I know you are not an accountant-lol). That 22k check that I would send in to the TDA is net salary. It has already been fully taxed. Once it is sent in and becomes part of the TDA, wouldn't it be taxed AGAIN (since withdrawals are taxable) when I later withdraw money from the account. Thus, that 22k would be taxed twice. ?????? THANK YOU SIR!!!

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  33. The 22K would not be taked onty the 7% interest would be when you take it out. The tax is only on the TDA appreciation, not the amount you contribued.

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  34. Traditionally, on a tax DEFERRED annuity, when you make a withdrawal the initial contribution plus the interest / earnings are taxed. Is it different with this additional 22k?

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  35. Only the interest (appreciation) is taxed since you already paid taxes on the money you put into the TDA.

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  36. i have spoken to several people at the TRS. All say you CANNOT finish out the year in contributions by sending a check to TRS to make the yearly maximum. You can only make contributions on earnings. Earnings stop when terminal leave is over. All say you cannot send them a check for the difference. ???????????

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  37. All you have to do is make $24,000 in earnings to contribute $24,00 in your TDA for that calendar year. If you are at maximum that would be in mid-April.

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  38. So, to reiterate, contributions can only be made on earned income. I was planning on taking terminal leave from September 2016 through January of 2017. So I CANNOT mail the TRS a check for February-December 2017. Is that correct? Thank you very much.

    ReplyDelete
  39. That's correct. However, you can mail the TRS a check for your January earned income.

    A case can be made that your July checks should also be considered earned income since they are based upon the first semester.

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  40. Good luck convincing TRS that the July checks are earned income however.

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  41. Anonymous10:11 PM

    Is there a minimum amount of days you can take for terminal leave. I want to take 2 days which I know means I will use 4 days and take the rest of my days as terminal pay.

    ReplyDelete
  42. I understand that the application for Terminal Leave must be made 30 school calendar days prior to commencement of the leave. Thus application for Terminal Leave to commence on Sept. 1 must be made by June 1. Does a principal have the right (power) to grant a Terminal Leave application for Sept. 1 made by August 1st?

    ReplyDelete
  43. I understand that the application for Terminal Leave must be made 30 school calendar days prior to commencement of the leave. Thus application for Terminal Leave to commence on Sept. 1 must be made by June 1. Does a principal have the right (power) to grant a Terminal Leave application for Sept. 1 made by August 1st?

    ReplyDelete
  44. Anonymous9:48 AM

    I have my anniversary date that I hit 30 years of service this November 30, 2016 but I don't turn 55 until March 14th of 2017. I have 59 days in my bank. What would be the best time to start my terminal leave so I can retire as early as possible? I was thinking that I should start on February 1st 2017 and use 26 days of terminal leave? Is there anyway I can leave earlier? I understand that you can't use terminal leave in two different semesters so I see February 1st, the beginning of the second semester the earliest I can leave.

    ReplyDelete
  45. Anonymous7:37 PM

    Chaz, if I retire in January, 2017, can I fully fund my TDA contributions for the rest of the year by sending the TRS a check

    ReplyDelete
  46. Anon 7:37

    No. You can only contribute that amount of income you earned in 2017. That is January and July money only. However, if you take terminal leave that is considered earned income so think about taking terminal leave to continue to contribute to your TDA.

    ReplyDelete
  47. Anonymous2:14 PM

    To take terminal leave, what exactly are the requirements?
    Must you be at least 55?
    Must you have at least 25 years of service?
    so if you are 54.5 years of age and you have 24.5 years of service, can you take terminal leave if you reach 55 within that time period?

    if you want to leave with 20 years, can you get terminal leave or do you just get a check?
    Thank you for your invaluable service! The info on this blog is very hard to find elsewhere.

    ReplyDelete
  48. You can take terminal leave at anytime no matter the age, or experience.

    ReplyDelete
  49. Hi Chaz,
    I am interested in retiring after the new year. I just read your blog (it was great). I am interested in paying the full TDA amount for the year. Currently, I pay 2000 per month in TDA contributions for a total of 24, 000 per year.

    You make reference to a situation where one could retire during the 2nd semester and supplement the full yearly TDA contribution out of pocket. Please explain the caveat of needing to make 24, 000. Would I have to make the 24,000 starting Feb 1st, the beginning of the 2nd semester ? I am confused.

    ReplyDelete
  50. Hi Chaz,
    I am interested in retiring after the new year. I just read your blog (it was great). I am interested in paying the full TDA amount for the year. Currently, I pay 2000 per month in TDA contributions for a total of 24, 000 per year.

    You make reference to a situation where one could retire during the 2nd semester and supplement the full yearly TDA contribution out of pocket. Please explain the caveat of needing to make 24, 000. Would I have to make the 24,000 starting Feb 1st, the beginning of the 2nd semester ? I am confused.

    ReplyDelete
  51. You can only contribute the earned income you make in January. Maybe July as well but no more than 2 months.

    ReplyDelete
  52. Anonymous8:40 AM

    Hi Chaz, I know this is an old thread, but I have a couple of questions. I see that principals have to approve terminal pay. What are the chances of a principal denying terminal pay? (My principal hates me~!) Also, I went for a consultation recently (not my final) and was told that because of the contractual raises and longevity raises that I will be getting in the near future, as well as the lump sum, my final average salary will have to be my last highest FIVE years instead of three years! That will include a yearly salary of 86K from five years ago that will make my pension much lower than an average of my last 3 years! This is so unfair!

    ReplyDelete
  53. I plan on taking Terminal Leave. My days end the day before Thanksgiving.

    What would be considered my first day of retirement? Thursday, November 23 or Monday, November 27th?

    If it is Monday, November 27th would I get paid for Thanksgiving day and Black Friday?

    ReplyDelete
  54. Paul Cuccio1:36 PM

    Chaz:

    Thank you for this informative blog. My retirement date is September 19th, 2017, I plan to make Sept 30 my retirement date, just in case TRS is off by a few days.

    In giving 30 days notice, I was told July and august doesn't count. example , if you ae retiring Sep. 1st, you must notify the Principal June 1st.

    I already gave my Principal notice of terminal Leave effective September 5th, 2017 (start of the new school year) My issue is that I am confused as to the timing of handing in my OP 40 and Op 44

    I want to take Terminal leave (OP 40) up to september 30th 2017 then take Terminal pay(Op 44) as of October 1st, 2017

    Can you please tell me the dates I should hand in each form based on the dates I supplied to you.

    Thank you
    Paul C.

    ReplyDelete
  55. Steve1:30 PM

    If I apply now for the Fall semester, and change my mind over the Summer, can I apply to be reinstated prior to the beginning of the school year?

    ReplyDelete
  56. Since we lose half our days why not use the 10 sick days we are allowed for the year without explanation right before terminal leave date to get out 2 school weeks sooner? Would that be a problem?

    ReplyDelete
  57. Anonymous4:19 PM

    Hi! I plan on taking terminal leave in Sept 2018-oct. 31 retirement as of Nov 1. Can I use the two days I accumulate in my CAR as part of my terminal leave?

    ReplyDelete
  58. Anonymous4:31 AM

    I will be 55 years old June 18, 2019. At that time I will have 29 years, 10 months and 7 days. I have 70 days in CAR. Should I use my terminal leave for May and June of 2019 or should I use it towards accumulating exactly 30 years and use it for September and most of October 2019? I am also in the 25/55 program. Need advice.

    ReplyDelete
  59. Peter1:34 PM

    Good Afternoon,
    Great blog! Have a quick question regarding terminal pay/leave. Suppose I have 197 days in my CAR and I want take leave for 50 days. I know that I would be physically using 50 days PLUS an additional 50 to cover the initial 50 (2 for 1 plan). At the end of the leave period I should have a one hundred days remaining (earned a CAR day a month during the leave). My question is: Would I receive terminal pay for those total remaining days, or would I receive only pay for half of those days? Look forward to your response. Thanks.

    ReplyDelete
  60. You only get termination pay for half the days.

    ReplyDelete
  61. Hi, Can you answer the following questions:
    After retiring, can a person who is currently on terminal leave, work outside the DOE or do they have to get a waiver? Or, does this person have to wait until after the terminal leave is over? Thanks!




    ReplyDelete
  62. Anonymous7:24 AM

    Can i work outside of doe if im on terminal leave?

    ReplyDelete
  63. Anonymous7:27 AM

    Can i work at another job if im on terminal leave?

    ReplyDelete
  64. Anonymous10:51 PM

    Hi Chaz, I want to apply for terminal leave. My admin says they are confused and don't know how it's done. I was advised to contact TRS- TRS said I don't see them until I file my " green"retirement paperwork. Our school secretary says I need to file form QP44 not QP40. They make me feel like I am confused and don't know what I'm talking about. I was advised by them to go to TRS and file , contact TRS and speak with them about this, BUT when I call the UFT i am told to submit form QP40. I was told to complete the QP44 and submit it to the secretary by the end of June. What is correct ? Now I am confused ! I want to file for Terminal Leave for it's benefits- NOT Terminal Pay. What do I say to the secretary and admin to make sure it's understood what I need to do ?AND What do I do to file for this option ? June is going by fast. Thank you.

    ReplyDelete
  65. Anonymous9:43 PM

    Hi Chaz,I will be 55 at the end of August 2019. Can I take a terminal leave from March to June using days from my car and summit my paper work for retirement at the end of August?

    ReplyDelete
  66. Anonymous7:59 AM

    Hi Chaz,
    I don't think this question was asked before: Do the days accrued during terminal leave count towards the retirement date? I am planning on giving notice of terminal leave in May 2018 for the Fall semester. With 180 CAR days currently I know that's 90 leave days, but don't know if I am supposed to include those "leave" months.
    Second question please. Can I do a limited per session job for DOE while on terminal leave?
    Thanks so much for this opportunity to ask.

    ReplyDelete
  67. Anonymous8:00 AM

    Hi, Chaz,

    Can I work per session in my school during the terminal leave period and add this to my income?

    ReplyDelete
  68. Hi Chaz, same comment as was posted this morning, I have been on hold for hr connect doe over an hour,
    Do the days accrued during terminal leave count towards the retirement date? I am planning on giving notice of terminal leave in May 2019 for the Fall semester. With 177 CAR days currently. Do I add one more day for June and 5 more days for Sept through Jan (the months I will be on leave). The semester begins on Jan 28 2020, so i assume I am to count backwards from Jan 27 but I need to know how many car days I am suppose to use so I can figure out if I need to come back for a few days in september. Thank you

    ReplyDelete
  69. I had 110 CAR days. I went on terminal leave on 4/1/19. That was 55 calendar days from the last day of the semester. My retirement date is my 55th birthday on 8/26/19. I thought that the doe would pay me half of the remaining 55 days, plus half of the 5 that I accrued while out on terminal. Essentially half of the 60 days. She just called me to ask if I can come in to sign for 5 days in the CAR so I can get paid for 2 days. She explained that while on terminal leave, I was using 2 CAR days for one to be on terminal because terminal days were not used up like sick days. To be out for one day of terminal, you are docked two CAR days. Not one CAR day. That was shocking.

    ReplyDelete
  70. Anonymous11:26 AM

    Can you tell me who pays for terminal leave? Will it wreck a school's budget or is it paid from an outside source?

    ReplyDelete
  71. Chaz I am on a study leave that ends on May 26 2020 I have 19 days in my Car plus the 10 I will get when I am back on payroll. I will be 55 on April 24 2020. Could I take Terminal leave beginning June 1 and will end around june 16. After Terminal leave is over am I officially retire and my retire start then are it begins July 1 of 2020

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  72. You will officially retire on the last day of Terminal Leave. I snuggest you work the 12 days and then take terminal leave.

    ReplyDelete
  73. Hi.

    Given your above comment, if I take my Terminal Leave through the last day of school (June 26, 2020), can I retire September 1, 2020, or is your last day of employment (Retirement Date) always the last day of the terminal leave?

    There is a box on the OP40 instruction sheet that says, 'When a vacation period intervenes between the end of a Terminal Leave and the member's Retirement Date, such vacation period shall be deemed a period of active service for purposes including compensation.' I interpret this to mean that a vacation period, such as summer vacation, can be in between the end of a Terminal Leave ending on the last day of school and a Retirement Date any time afterwards, in this case, the day before the Fall 2020 semester begins.

    Have I got this correct?

    Thank you.

    ReplyDelete
  74. Good Afternoon,
    I am a para and I need to know how to calculate what my pay is per day. I do not remember the formula, can you share that with me? Thanks

    ReplyDelete
    Replies
    1. For UFT Members, the per day pay is calculated by dividing your current salary by 200.

      Delete
  75. Anonymous12:41 PM

    Its been 7 months since I retired and I haven't receive a payment for my car days what do I do??

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  76. Hi. I retired on july 1 2021. I haven't received any checks for my car days. I did filled out the form with the secretary. Its been 7 months. What do I do next?

    ReplyDelete
  77. Hi Chaz,

    The 30 day notice to principals for terminal leave is supposed to be 30 calendar days, however does that include holidays and/or vacation days?

    ReplyDelete
  78. Anonymous12:42 PM

    After taking a terminal leave for June by using CAR days and retiring in July 1. Are you entitled to receive your Summer pay like everyone else?

    ReplyDelete