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Indiana State Personnel Department

SPD > Benefits > Early Retirees > Retiree Leave Conversion Program Retiree Leave Conversion Program

The Retiree Leave Conversion Program (RLCP) extends compensation to include accrued but unused and uncompensated vacation leave in excess of the 225 vacation hours as well as sick and/or personal leave upon retirement. Calculation of benefits under this program will be based on leave hours available after the employee’s final paycheck has been calculated. The program permits eligible employees to receive a portion of accrued but unused and uncompensated leave.

RLCP allows compensation of accrued but unused vacation in excess of 225 hours plus sick and personal leave up to a maximum of $5,000.00, if the established criteria are met. The procedure and required criteria are outlined in this material. Please refer to 31 IAC 4 for clarification and as the controlling authority.

Definition and applicability

To qualify for this program, the individual must meet the criteria established for “eligible retiree:”

  • has at least 10 years of creditable service with state agencies;
  • has accrued but unused and uncompensated vacation, sick or personal leave after the employee’s final paycheck has been calculated.

“Retire” means terminate state employment at a time when the eligible retiree is *entitled to begin receiving pension benefits from a public pension plan as a consequence of the retiree’s state service.

*Please refer to the current handbook on retirement benefits published by the Public Employees’ Retirement Fund or the Teachers’ Retirement Fund.

“State agency” means an authority, board, branch, commission, committee, department, division or other instrumentality of state government, but does not include:

  • a state educational institution (as defined in IC 20-12-0.5-1);
  • a state elected official’s office; and
  • the legislative and judicial branches of state government.

The eligible retiree must retire from a state agency as established by 31 IAC 4. The state will issue the payout within 60 days following the last pay date for the eligible retiree, if the necessary requirements are met. The payout will be calculated by converting unused balances in the order of sick, personal, and then vacation. It is important to note that all monies due to the retiree as a benefit of this program are taxable.

Calculation formula

To determine the amount of benefit for an eligible retiree, the State Personnel Department will utilize the leave valuation established by 31 IAC 4. Keep in mind that the amount of benefit is only for leave amounts in excess of the 225 hours of vacation leave that may be paid to employees on their final regular pay check.
The value varies dependent upon the years of creditable service. For leave balances remaining after the 225 hours of vacation leave outlined above, calculations are performed as follows:

  1. The retiree’s regular biweekly salary divided by 75.
  2. Multiply the quotient from #1 by the number of hours of remaining sick, personal and vacation     leave.
  3. Multiply the quotient from #2 by:
    • 20% for an eligible retiree with at least 10 years but less than 15 years of creditable service.
    • 35% for an eligible retiree with at least 15 years but less than 20 years of creditable service.
    • 50% for an eligible retiree with at least 20 years of creditable service.

The maximum amount of benefit allowed by 31 IAC 4-4-2 is $5,000.00. The determined benefit, up to the maximum allowed ($5,000.00), will be issued to the retiree.

Death benefits

If an employee dies while employed by a participating state agency, then the benefit will be calculated under this article as if the employee had retired effective the day the employee died.