CONTRA COSTA COUNTY
EMPLOYEES' RETIREMENT ASSOCIATION
 
  
 


As you can see from the formula on the Benefit Value page, the more retirement service credit you have, the higher your benefit will be. Likewise, the higher your final average salary, the higher your retirement benefit.

Plus, there are four broad categories that may also increase your retirement benefit:
Differentials       Vacation Accruals      Unused Sick Leave       Purchases
  • Unused sick leave and purchases add service credit.
  • Differentials and vacation accruals add dollars to your final average salary (FAS).
    *Please see important notice below concerning "Terminal Pay" for employees entering the system on or after January 1, 2011.
Differentials:
 Additional pay items subject to retirement (differentials) and eligible terminal pay may increase your final average salary. If available to you, these dollar amounts are added to the highest final average salary before that amount is used in your benefit formula.

Differentials vary from employer to employer. For example, if you are a bi-lingual employee, you may receive a pay differential for using that skill. If your work includes a uniform allowance, that allowance may be considered a special pay item, and therefore, a differential. Since retirement contributions are taken on these amounts, their value is included in your retirement benefit. Differentials fall under the definition of "compensation" in the 1937 Act. (To find out the details for your job, ask your payroll clerk.)

 

31460.
(UNUSED) Sick Leave Accruals:
General members accrue sick leave at the rate of 8 hours for every month worked. Part-time employees accrue a pro-rated amount of sick leave, depending on the number of hours worked. Unused sick leave accumulates from year to year with no limit (NOTE:Some districts have accrual limits, and may or may not offer this option.) If you retire, all accumulated sick leave is converted to service credit. Here's an example of how this time is computed for your benefit:

One hour of unused sick leave equals one hour of service credit.
1,000 hours of unused sick leave ÷ by 2,000 hours (average hours worked in a year)
= .5 (1/2 of one year's service credit)

This amount of service credit is added to your final retirement benefit calculation. Remember, service credit increases your monetary benefit, but does not count toward retirement eligibility.

 
31641.01
 
Terminal Pay:
Terminal pay is the phrase used to describe dollar amounts you are paid for unused vacation accruals and personal (floating) holiday hours at time of retirement. Terminal pay amounts become part of the final average salary (FAS) calculation, if you were hired prior to 12/31/2010. Terminal pay is added to your salary for your last working month, making your final average salary higher. Here's an example:
Your salary for the last twelve months before you retired was $2,000 per month. At time of retirement, you have $500.00 worth of unused vacation time.
11 months x $2,000 = $22,000.
Your last month (month 12) of pay is your regular salary ($2,000) + $500 worth of vacation = $2500.
Your final salary for the year is $22,000 + $2500 = $24,500.
The final average salary calculation is $24,500 ÷ 12 (12 months in a year) = $2,042. $2,042 is the final average monthly salary amount used in your retirement benefit calculation.
There is a limit on the amount of time you can use for this purpose, usually one year of accruals. (Tier 2 has a limit of 2 years of accruals.)

(The accrual limits are determined by collective bargaining and the MOU process during contract negotiations between employers and unions. You can find out what your accrual rate is by checking the number of vacation hours earned per month on your paycheck and multiplying by 12.)

 
*PLEASE NOTE: As of January 1, 2011, in general, NEW members entering the system with a membership date of January 1, 2011 and beyond, will NOT be able to add accrued vacation, personal holiday, holiday comp, sabbatical, payment of sick leave or administrative leave, (depending on Union MOU agreements) into their retirement benefit. This policy change was adopted by the Retirement Board in March 2010, and reflects Sections 31450, et seq., of the County Employees Retirement Law of 1937. Accrued, unused, vacation can still be converted to cash and paid as "terminal pay;" however, these dollars will not be figured into the Final Average Salary for retirement calculation. Members who have the capacity to "sell back" accrued vacation or other leave categories (depending on MOU agreements), may still receive credit for these sales. However, these sales will only be counted within a 12 month period in which the accrued time was both earned and cashable during service. Other incentives, bonuses, and payments that are not received in cash during service, but only upon termination or retirement, will not be included in Final Average Salary Calculations. The Retirement Board Policy and Addendum are posted on this website on the Retirement Board Page.
If you are in an employment classification that includes the ability to sell vacation hours, the value of vacation sales within the final average salary period before you retire will also be used in calculating your annual final average salary. (12 month Final Average Salary for Tiers 1, 1E, 3,3E, and Safety A; 36 month Final Average Salary for Tier 2, Tier 3 Disability and Safety Tier A).
If available from your employer, members can also be paid for "holiday comp" hours on their last paycheck.