If an employer’s termination incentive program creates an actuarial unfunded liability for ASRS, the employer must pay that amount, and the employer must notify ASRS before implementing a program that may affect ASRS funding.
38-749 - Employer termination incentive program; employer payment of actuarial cost; definitions 38-749. Employer termination incentive program; employer payment of actuarial cost; definitions A. If a termination incentive program that is offered by an employer results in an actuarial unfunded liability to ASRS, the employer shall pay to ASRS the amount of the unfunded liability. ASRS shall determine the amount of the unfunded liability in consultation with its actuary. B. An employer shall notify ASRS if the employer plans to implement a termination incentive program that may affect ASRS funding. C. If ASRS determines that an employer has implemented a termination incentive program that results in an actuarial unfunded liability to ASRS, ASRS shall assess the cost of the unfunded liability to that employer. If the employer does not remit full payment of all monies due within ninety days after being notified by ASRS of the amount due, the unpaid amount accrues interest until the amount is paid in full. The interest rate is the interest rate assumption that is approved by the board for actuarial equivalency for the period in question to the date payment is received. D. For the purposes of this section: 1. "Termination incentive program" means either: (a) A total increase in compensation of thirty percent or more that is given to a member in any one or more years before termination that are used to calculate the member's average monthly compensation if that increase in compensation is used to calculate the member's retirement benefit and that increase in compensation is not attributed to a promotion. (b) Anything of value, including any monies, credited service or points that the employer provides to or on behalf of a member that is conditioned on the member's termination except for payments to an employee for accrued vacation, sick leave or compensatory time, unless the payment is enhanced beyond the employer's customary payment. 2. "Unfunded liability" means either: (a) For the purposes of assessing a cost for an unfunded liability from a termination incentive program as defined in paragraph 1, subdivision (a) of this subsection, the increase in accrued liability attributable to the portion of the benefit that is based on the member's average monthly compensation at the time of retirement in excess of the thirty percent threshold as calculated using the lump sum actuarial factors in effect at the time of the calculation, as provided by the ASRS actuary. (b) For the purposes of assessing a cost for an unfunded liability resulting from a termination incentive program as defined in paragraph 1, subdivision (b) of this subsection, the difference between the accrued liability using the ASRS valuation assumptions calculated for the member assuming the member retires under the termination incentive program and the accrued liability using the ASRS valuation assumptions, which if necessary may be modified by the ASRS actuary, calculated for the member assuming the member is still an active member.