NPERS2400 NPERS2405 NPERS2406
Rev. 03/2018
Page 2 of 2
BAR CODE
Termination of Employment – What does it mean?
A member of the School Employees Retirement Plan is not entitled to a retirement benefit until after he/she has terminated
employment. “Termination of employment” has a very specific meaning in the School Employees Retirement Act. In short,
termination of employment occurs on the date on which the member experiences a bona fide separation from service of
employment.
It is important to note that the definition of termination of employment does not mean the last day that the member physically
worked. The last day that the member physically worked and the member’s termination date may coincide, but the 2 dates are
distinctly different.
NPERS relies on the reported information on this form to process the member’s retirement benefit. It is very important that a proper
determination is made with respect to the member’s reported termination date. If the PERB determines that a member received an “in
service distribution” due to the reporting of an incorrect termination date, the law requires the member who has received such benefit
to repay the benefit to the retirement system.
Please review the following examples of the most common termination scenarios. This is not an exhaustive list.
• EXAMPLE A: AN EMPLOYEE WITH A STANDARD CONTRACT.
A member is contracted to work from August 18, 20xx through May 26, 20xx; 186 days at full-time. This is an example of a
standard (teaching) contract with no “extended” contract days or no extra duty after the end of the member’s contract. The
salary for this service is normally paid over the 12-month period (Sept – Aug). In this example, record May 26, 20xx as the
member’s date of termination.
• EXAMPLE B: AN EMPLOYEE WITH AN EXTENDED CONTRACT (10 EXTRA DAYS).
A member is contracted to work from August 18, 20xx through June 10, 20xx; 196 days at full-time. The salary for this
service is normally paid over the 12-month period (Sept – Aug), same as the member with the standard contract. In this
example, record June 10, 20xx as the member’s date of termination.
In this example, in the year of retirement, the member completed all of his/her 196 contract days by May 31, 20xx. This
does not change the member’s termination date. It is still June 10, 20xx. It is not correct to record May 31, 20xx as the
member’s termination date (remember…the last physical day of work is not the defintion of termination of employment). The
member’s contractual end date is what determines the member’s termination date.
• EXAMPLE C: AN EMPLOYEE CEASES EMPLOYMENT BEFORE COMPLETION OF HIS/HER CONTRACT.
A member is contracted to work from August 18, 20xx through May 26, 20xx; 186 days at full-time. The salary for this
service is normally paid over the 12-month period (Sept – Aug). The member resigns on April 15, 20xx, completing 156
out of 186 contracted days. In this example, record April 15, 20xx as the member’s termination date. The
compensation and service hours must be reported to NPERS only to the extent of the portion of the employment
contract that was completed (156 days). Do not report compensation and service hours beyond the 156 days.
• EXAMPLE D: AN EMPLOYEE CEASES WORKING AND THEN IS ON AN UNPAID LEAVE OF ABSENCE.
A member is contracted to work from August 18, 20xx through May 26, 20xx; 186 days at full-time. The salary for this
service is normally paid over the 12-month period (Sept - Aug). The member’s last physical day of work is on April 15,
20xx. The member then goes on an upaid leave of absence and then eventually resigns effective August 15, 20xx. A
member on a leave of absence is still considered employed. In this example, record August 15, 20xx as the termination
date (the resignation date). The compensation and service hours must be reported to NPERS only to the extent of
the portion of the employment contract that was completed (156 days).
• EXAMPLE E: AN EMPLOYEE DIES IN SERVICE.
Follow Example C for a member that dies unexpectedly, before the completion of his/her contract. Record the member’s
date of death as the termination date. Compensation and service hours must be reported to NPERS only to the extent of
the portion of the employment contract that was completed (as described in Example C).
• EXAMPLE F: USING VACATION AT THE END OF A CONTRACT.
An employee is contracted to work August 1, 20xx through July 31, 20xx; 240 days at full-time. The member is a 12-month
employee and is normally paid over the same 12-month period (Aug - July 31). The member “works” August 1 through June
30 every year and uses vacation in July of every year. Do not record June 30 as the member’s termination date. If the
member is “using” vacation time, it is considered “work” time. In this example, you should record July 31 as the member’s
termination date. Service hours and salary should be reported for July.
The PERB is required to administer the Plan in a manner that maintains the Plan’s qualified status under the Internal Revenue
Code (IRC). In those instances where an inconsistency is identified, NPERS will investigate and may request further documentation
in order to substantiate reported information. If you have any questions about this form, please call NPERS.