Human Resources
State Employee Retirement Incentive Program (SERIP)
The State Employee Retirement Incentive Program (SERIP) was a one-time program for State employees who were eligible to retire. The program offered financial and state-sponsored health insurance incentives to eligible State employees to separate from state employment by June 24 , 2010. The deadline for applying for SERIP was April 15, 2010.
Eligibility
State employees eligible for the SERIP were:
- Permanent full-time or permanent part-time benefit-eligible employees.
- Executive branch employees covered by AFSCME.
- Executive branch employees covered by UE/IUP.
- Executive branch non-contract employees.
- Community-Based Corrections employees.
- Board of Regents Central Office employees (if the Board of Regents chooses to participate).
- Employees in offices of statewide elected officials.
- Legislative branch employees.
This program did not include:
- Elected officials.
- Board of Regents' institution employees.
- Executive branch employees covered by SPOC or the SPOC Sick Leave Trust Fund.
In addition to being in an eligible class of employees listed above, an employee must:
- Have been 55 years of age as of July 31, 2010.
- Submitted an application for IPERS monthly benefits no later than the date the employee separated employment with the State. If the employee rescinded their retirement and did not receive a pension benefit, the employee was not considered to have taken retirement and was not eligible for this program.
- Submitted a SERIP application by April 15, 2010.
A listing of positions occupied by employees that were deemed eligible for SERIP and their ages can be found here. A listing of positions occupied by employees and their ages that were determined not to be eligible for SERIP can be found here.
The Judicial Branch did not participate in SERIP.
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Benefits Overview
SERIP was a two-part program to incent eligible State employees to retire.
- A financial incentive based on IPERS-covered years of service with the State of Iowa. To be eligible for the incentive, an employee must have had a minimum of ten (10) years of IPERS-covered service with the State of Iowa. The employee is paid $1,000 for each year of state service, beginning with ten (10) years of service ($10,000) up to twenty-five (25) years of state service ($25,000). The incentive plus the employee's unused vacation balance at retirement is paid out over five (5) years.
- Financial contributions toward a state-sponsored health insurance plan for up to five (5) years.
An employee didn't need to have ten (10) years of IPERS-covered service with the State to be eligible for SERIP. If the employee meet all the eligibility requirements but had less than ten (10) years of IPERS-covered service with the State, he/she was not eligible for the financial incentive but was eligible for the contributions to state-sponsored health insurance.
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Retirement
To be eligible for this program, an employee must have submitted an application for IPERS monthly benefits no later than the date he/she separated employment with the State.
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Financial Package
An employee received the following financial incentive payments as part of SERIP.
- A payout of up to $2,000 from the employee's unused sick leave balance. This payment was made on the last pay check and subject to federal, state and FICA taxes. The employee could make an election of the sick leave payment to their deferred compensation account.
- An equal payment (20%) for a total of five years (2010 – 2014) of the following:
- The employee's unused vacation balance at retirement. PLUS
- A financial incentive of $1,000 for every full year of IPERS-covered state service that the employee completed as of his/her separation of employment from the State beginning with a minimum of ten (10) full years of State service and a maximum of twenty-five (25) years of state service. An employee with more than twenty-five (25) years of state service was only paid for up to twenty-five (25) years.
Full Years of Service |
Severance Pay * |
Level Payment per Year ** |
10 years |
$10,000 |
$2,000 |
11 years |
$11,000 |
$2,200 |
12 years |
$12,000 |
$2,400 |
13 years |
$13,000 |
$2,600 |
14 years |
$14,000 |
$2,800 |
15 years |
$15,000 |
$3,000 |
16 years |
$16,000 |
$3,200 |
17 years |
$17,000 |
$3,400 |
18 years |
$18,000 |
$3,600 |
19 years |
$19,000 |
$3,800 |
20 years |
$20,000 |
$4,000 |
21 years |
$21,000 |
$4,200 |
22 years |
$22,000 |
$4,400 |
23 years |
$23,000 |
$4,600 |
24 years |
$24,000 |
$4,800 |
25 years |
$25,000 |
$5,000 |
* Plus the retiree's unused vacation balance at retirement.
** In addition to the level financial payments, 1/5 of the employee's unused vacation balance at retirement is also included in the payout per year.
Note: If the employee was not eligible for the financial incentive due to not having the minimum number of ten (10) years of IPERS-covered state service, his/her unused vacation balance at retirement will still be paid over five (5) years.
Financial Incentive Example
An employee is 65 years of age and has twenty (20) full years of state service as of his or her separation date from state employment. In addition, the dollar value of the employee’s unused vacation balance at retirement is $3,000. The employee is eligible for a financial incentive totaling $23,000 (20 years of service at $1,000 per year plus the unused vacation balance at retirement of $3,000.) The individual will receive a level payout of $4,600 for five (5) years ($23,000/5). |
The first payment was in September 2010 and the remaining payments will be paid annually in September of 2011, 2012, 2013 and 2014. Except for the payment made in September 2010, a SERIP retiree can not make an election of the financial incentive into his/her deferred compensation account.
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Taxation of the Financial Incentive
The financial incentive payments are subject to federal, state and FICA taxes. Each year, a SERIP retiree receives a W2 from the State for the financial incentive paid in that tax year.
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In the Event of SERIP Retiree's Death
In the event of a SERIP retiree's death before the five (5) payments are made, the remaining payment(s) are made to the retiree's beneficiary. Payments made to a beneficiary are also subject to taxation.
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Health Insurance Contribution
In addition to the financial incentive, a SERIP retiree received a minimum of five (5) years of state contributions toward the premiums of a state-sponsored health insurance plan either through SLIP, SERIP or a combination of both programs.
The state health insurance contributions are comprised of the following:
- SLIP: The Sick Leave Insurance Program (SLIP) takes a retiree's unused sick leave balance, using the factor of 60, 80 or 100 percent, depending upon his/her sick leave at retirement (minus the $2,000 cash payout in the final paycheck) and uses that balance to pay the state share of the health insurance the retiree selected. The retiree pays the active employee premium. SLIP continues to pay the state share of the health insurance premium until the account is exhausted or the retiree becomes eligible for Medicare (in most cases, age 65.)
The retiree may continue to use funds from their SLIP account to pay the state share of the health insurance premium for longer than five years if their account is sufficient and he/she remain eligible for SLIP (not Medicare-eligible.) If the retiree is able to utilize their SLIP account for five (5) or more years, he/she is not eligible for any additional state contributions.
- SERIP: The State contributes to the cost of a state-sponsored health insurance plan up to five (5) years. This contribution goes into effect if the retiree's SLIP account is not sufficient to pay the State’s share of the premiums for five (5) years or the retiree is not eligible for SLIP due to being Medicare-eligible. The time that a retiree uses SLIP is counted towards the five years.
A retiree can continue to participate in SERIP even when he/she becomes Medicare-eligible (in most cases, age 65) as long as he/she has not received a total of five (5) years of state contributions toward health insurance.
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State Contributions to SERIP Health Insurance Coverage
Depending upon the coverage level the retiree elects, the state health insurance contribution is the Blue Access premium in effect each year for the 5 years the retiree participates in the program starting upon his/her termination date. If the health plan selected includes someone who is Medicare-eligible, the state share is based on the Blue Access with SilverScript premiums.
NOTE: Under SERIP, the retiree could select any health insurance plan and coverage level. The State contribution toward the premium is either the Blue Access single or family premium. The retiree pays the difference if a higher cost health plan is elected. Also, if the retiree is Medicare-eligible and he/she elects SilverScript, the retiree is responsible for the SilverScript premium. However under SLIP, the sick leave balance funds any state-sponsored plan until the balance runs out or the retiree becomes eligible for Medicare.
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Health Insurance Contribution Examples
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In the Event of your Death
If a SERIP retiree's spouse is covered under the state health insurance plan at the time of the SERIP retiree's death, he/ she can continue health coverage. In the event of SERIP retiree's death within five (5) years of his/her retirement, his/her spouse receives the remaining years of SERIP health insurance contributions. See Example 5 above. (NOTE: The SLIP account cannot be used by a retiree's spouse.)
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Continuation on the State's Retiree Health Insurance
After the State subsidy ends (SLIP or SERIP), the retiree is eligible to continue health insurance coverage in the State’s retiree health insurance group with no additional contribution from the State.
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Dental Insurance
You can continue dental insurance as a retiree but neither SLIP nor SERIP can be used to pay the dental insurance premium. You pay 100 percent of the premium.
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Continuing Benefits at Retirement
The State’s policies and procedures regarding continuing benefits upon retirement apply.
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Cancellation of Insurance Coverage
A SERIP retiree can cancel health and dental insurance coverage at any time. If a retiree drops the State of Iowa health and/or dental coverage, there is no provision for rejoining the group at a later date.
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Time Frame for Applying for SERIP
An eligible employee had to apply for SERIP by April 15, 2010.
The Department of Administrative Services reviewed an individual's eligibility for the program and approved the application. A employee could leave state employment anytime after providing the appropriate notice to his/her department but he/she must have separate from State employment no later than June 24, 2010. A component of SERIP is that the retiree agreed to waive all rights to file a suit against the State of Iowa based on claims arising out of the individual's employment with the State of Iowa.
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Reemployment with the State
A component of SERIP is that a SERIP retiree will never apply for or accept future employment with the State of Iowa as a permanent employee, temporary employee, consultant or independent contractor with the exception of being appointed to a board or commission.
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Contacts
If you have questions about SERIP, contact Rachel Orris at 515-281-6124.
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Last updated 12/06/2012