The BENCOR 401(a) and 403(b) Special Pay Plan print brochure

Employees who enter DROP and are eligible for 100% of their terminal sick leave in accordance with the School Board Meritorious Attendance Incentive Program shall have their accumulated terminal sick leave paid into the BENCOR 401(a) Special Pay Plan.

Your terminal sick leave will be paid into the BENCOR Special Pay Plan subject to annual contribution limits each June 30th following your DROP begin date anniversary.

The BENCOR Special Pay Plan helps you take maximum advantage of Federal tax laws. You will permanently save the 7.65% Social Security and Medicare Tax on plan contributions. Contributions are made on a pre-tax basis resulting in a deferral of income taxes until the deposited amount is withdrawn.

BENCOR, Inc. and Diversified Investors Securities Corp. (DISC) sponsor the BENCOR Special Pay Plan. The administrative Trustee is Wachovia Bank. BENCOR Administrative Services administers the Plan.

The BENCOR Special Pay Plan requires a portion of your sick leave payout to be paid directly into the Plan. The required contribution into the Special Pay Plan is an amount not to exceed 100% of fiscal year to date gross salary (July 1 – June 30), sick leave payout or $50,000, whichever is less.

You may elect to invest your BENCOR Special Pay Plan contributions among numerous investment options including a fixed or guaranteed account (default choice unless previously changed). IRS rules do not allow access to Plan contributions until you terminate your employment at the end of DROP other than through the loan provisions. There is no 10% IRS penalty on cash distributions if you are at least age 55 in the year of separation from employment. Please consult your tax advisor for information regarding the taxability of Plan distributions.>

DROP participants’ Annual Leave/Terminal Sick Leave pay will be processed as follows:

Annual Leave:

Employees participating in DROP subject to employer policy have the option to (1) receive their annual leave as a lump-sum distribution at the time of enrollment in DROP or (2) receive a lump-sum payment at the end of the DROP period. If option (1) is chosen (wait until end of DROP period), this dollar amount will be included in the employee’s compensation for retirement benefit calculation purposes (FRS). If option (2) is chosen (wait until end of DROP period), this dollar amount is not included in the FRS benefit calculation.

Under option (1) or option (2) above, annual leave will be placed into the "BENCOR NATIONAL PLAN" subject to contribution limits. Any annual leave in excess of Plan contribution limits will be paid to the participant subject to Federal tax and related payroll taxes (Social Security and Medicare). The participant does not have access to Plan contributions until the end of the DROP – other than through loan provisions.

Terminal Sick Leave Pay:

An employee participating in DROP will have a percentage of their accumulated sick-leave pay balance deposited into their account at the end of each year of DROP. The percentage is determined by the participant’s DROP year. EXAMPLE: An employee participating in DROP for a period of five (5) years will have terminal-sick-leave pay deposited as follows:

Year Balance of Terminal Sick Leave Deposited in to BENCOR

  • 1.....................................23.3%
  • 2.....................................25.6%
  • 3.....................................36.0 %
  • 4.....................................50.8%
  • 5.....................................86.1%
  • 6.....................................100.0% in year of separation

EXAMPLE: An employee participating in DROP for a period of two (2) years will have terminal-sick-leave pay deposited as follows:

Year Balance of Terminal Sick Leave Deposited in to BENCOR

  • 1.....................................50.0%
  • 2.....................................100.0% in year of separation

If the yearly sick-pay contribution exceeds the amount of the contribution limit (see Contribution Limits above) the excess amount will be rolled into the next Plan year. Employees terminating prior to their pre-selected DROP end date will have 100% of their remaining eligible sick-leave balance paid into the Plan, subject to contribution limits. Any excess amount will be paid in cash, subject to all applicable taxes. This method of payment allows employees to take maximum advantage of Federal tax law.

Contact BENCOR Administrative Services at 1-888-258-3422 for general plan information, plan balances, and the various investment choices available to you.

Related Retirement Topics

Helpful Links