SANTA CRUZ COUNTY
PERSONNEL ADMINISTRATIVE MANUAL

PURPOSE: 

To allow an employee, who participates in the County’s deferred compensation program and who is separating from employment, to transfer payoff of sick, vacation, annual, and administrative leave accruals (up to the maximum amount allowable by the IRS) to the employee’s 457(b) Deferred Compensation account defer payment of State and Federal income taxes.

LEGAL BASIS: 
Internal Revenue Service, Department of Treasury, Final Regulations 26 CFR Parts 1 and 602 

PROCEDURE:

These procedures must be followed in order to allow the Auditor Controller the ability to transfer, at the request of separating employees who participate in the County’s 457(b) Deferred Compensation program, accrued sick, vacation, annual and administrative leave payoffs up to the maximum deferral limitations in accordance with the IRS.

1. The employee must complete a Letter of Separation/Deferral Election form.

2. The employee must complete a Voluntary Deductions Authorization form.

3. The employee must submit the original completed Letter of Separation/Deferral Election form and the Voluntary Deductions Authorization form to the Executive Secretary in the County Administrative Office: 

   
   

   1. at least one full pay period before the date of employment separation, AND

   2. in the calendar month prior to the calendar month of the employee’s separation date

   
   

4. The Executive Secretary in the County Administrative Office must sign the necessary forms and immediately deliver them to the Payroll Supervisor in the Auditor Controller’s Office.

5. The Auditor Controller’s Office must transfer the funds so that the deferred compensation administrator is in receipt of the funds on the last day of employment of the separating employee.