Term Pay Calculator

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Page last updated 6/22/17

The Term Pay Calculator page is a budgeting tool that helps employers estimate costs related to the termination and retirement of a TRS member.

 

Term pay (termination pay) generally includes all vacation pay, sick leave, severance pay, and any other amounts to be paid to the employee at the time of termination and retirement.

 

TRS retirement benefits are based upon average final compensation. Members can choose to include their term pay in the calculation of average final compensation, thus increasing their monthly TRS retirement benefit. If they make this choice, both the member and their employer are required to make additional contributions to TRS to fund the benefit increase. The Term Pay Calculator page allows the employer to run "what if" scenarios for budgeting purposes. The page also estimates the amount the employee would be required to pay TRS on an after-tax basis.

 

The Member's Retirement Plan Handbook, available in the Active Members section of the TRS website, provides a complete description of term pay options.

 

All fields are described below, and step-by-step procedures are found at the bottom of this page.

 

Click to view larger image. (Click again to close.)

Initial view of page for an employee who has not yet submitted a retirement application to TRS


The name of the currently selected TRS member is displayed in the blue bar. If no employee is selected, use Find or Lookup functions to select the employee by SSN or by name.

If no retirement application is on file for the selected TRS member, most fields will be blank when the page is first accessed. (The screen image above shows an example.)

 

Field Names and Descriptions

 

Current Employer: The employer on file with TRS as the member's current employer. This will always match your employer name and ID, as term pay calculations may only be run for your current employees.

Date of Birth: The date of birth on file with TRS for this employee.

Termination Date: The date of termination of employment. If no value is displayed, the termination date must be entered to use the page.
Retirement Date: The first of the month after the termination date. This date is populated automatically based on the termination date.

Years of Service: The number of years of TRS service credit based on the member's hire date in a TRS-reportable position. This value includes two decimal places to reflect partial years (such as 25.56). If the member does not have a retirement application on file, the field displays .00 when you first access the page.

Buyback Service Available: Number of years of service, if any, that a member may purchase. The member must either purchase or forfeit the service prior to retirement.

Total Service:  The total of the years shown in the Years of Service and Buyback Service Available fields.

Termination Pay Amount: The estimated amount of the member's termination pay, as determined by the employer. The pay amount must be entered to use the page.

Termination Pay Option: A drop-down list of available options. If the member has not yet submitted a TRS retirement application, the employer can run "what if" scenarios by choosing Option 1, Option 2, or Both. If the member has submitted an application and selected a term pay option, this field displays the chosen option and cannot be changed.

FICA Withholding Amount: A field in which to enter the actual amount of FICA tax, if any, to be withheld from the member's term pay.

Medicare Withholding Amount: A field in which to enter the actual amount of Medicare tax, if any, to be withheld from the member's term pay.

NOTE: You can click the Calculator Web_WC_calc_icon button next to the FICA and Medicare Withholding Amount fields to fill in the amounts based on the percentages shown in the gray box. However, if different amounts were withheld, enter the actual amounts.

 

 


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Using the Term Pay Calculator to Estimate Contributions

1.Choose the Term Pay Calculator menu option to access the page.

 

2.Enter the member's SSN in the Find field if the member's name is not already displayed at the top of the page.

 

3.Enter information in the fields listed below.

Note: If TRS already has a retirement application on file for the member, some fields will be filled in by the system.

 

Termination Date:

Click in this field and use the pop-up calendar to select the month, day, and year on which employment will terminate.

Note: If the employee has already submitted a retirement application to TRS, the termination date is displayed and cannot be changed.

The Retirement Date field displays the first of the month after the termination date.

Termination Pay Amount:

Enter the amount of the employee's termination pay in dollars and cents. Do not enter a dollar $ sign.

Termination Pay Option:

Select Option 1, 2, or Both in the drop-down list. If the employee has already elected an option, that option is shown and cannot be changed.

If Both is selected, the next page will display contribution amounts under both Options 1 and 2.

FICA and Medicare Withholding Amounts:

(use only for pre-tax contributions)

Click the Calculator Web_WC_calc_icon button to enter amounts based on the percentages shown in the gray box. You must enter the actual amounts withheld, if different.

If the employee has not signed a form authorizing you to withhold contributions on a pre-tax basis, leave these fields unchanged (.00).

Calculate

Click the Calculate button.

As illustrated in the page image below, calculations are shown for both Option 1 and Option 2.

Recalculate (optional)

Click Recalculate to run a new calculation with different parameters, if desired.

Print the screen

Submit a printout of the final term pay calculation to TRS with the member's retirement application. To do this, use the Print icon in the upper right corner of the page.

arrow_green_16x16 TIP: Do you see an error message on your printout when you use the Print icon? These problems generally occur when using the Internet Explorer 11 browser. Using another browser (e.g., Mozilla Firefox) should resolve this issue. Click HERE for a list of options (PDF).


 


Calculation Example 1:  NO retirement application on file with TRS for this member

The information you entered on the initial page is shown in the upper section. The system fills in Retirement Date, Years of Service, Buyback Service Available, and Total Service fields automatically from the member's TRS membership record.

 

Since the Termination Pay Option field was set to Both, the center section of the page shows a comparison of contribution rates and amounts for each option.

 

The lower section provides more detail about Option 1. Note that an employee who chooses Option 1 must submit a check or money order to TRS to fund the increase in retirement benefits.

 

Click to view larger image. (Click again to close.)

 

Option 1 and Option 2 calculations for an employee who has not yet submitted a retirement application to TRS


 

Calculation Example 2: Retirement application on file with TRS; member has selected Option 1

Click to view larger image. (Click again to close.)

 

Calculation for an employee who submitted a retirement application to TRS and selected Option 1


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