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Employee Matters

September 9, 2003

The staff of the Employee Compensation and Benefits Services office prepares this column.

Accumulated Leave Conversion Credit Program

The 2003-05 state budget includes language that enhances the accumulated leave program and makes more people eligible. Changes include granting sick leave credits to employees terminating with 20 years of creditable Wisconsin Retirement System service and changes to the hourly rate used to compute the value of these credits.

What is the Accumulated Leave Conversion Credit program?
The Accumulated Leave Conversion Credit program entitles employees to use the value of their unused sick-leave credits to pay for health-insurance premiums. The program features two components: the basic sick-leave program entitled Accumulated Leave Conversion Credit and the Supplemental Health Insurance Conversion Credit.

An employee may be eligible for this program in several ways:

  • Employee with 20 years of Wisconsin Retirement System “creditable service” at the time of retirement.
  • Employee who retires on an immediate annuity (annuity that starts within 30 days of the employee’s termination date).
  • Employee with 20 years of “continuous state service” in the Wisconsin Retirement System terminates, is eligible to receive an annuity, but defers beginning to receive an annuity.
  • Employee dies while in active service.
  • Employee is laid off from a position.
  • Employee applies for a disability annuity and income continuation insurance simultaneously.

Who is eligible for the supplemental program?
To be eligible for the supplemental (often called matching) credits, an employee must have 15 years of continuous “state service.” Eligible general or executive occupation employees receive up to 52 supplemental credits per year for years 1-24, and protective employees receive 78 supplemental credits per year of state service. For years 25 and beyond, all groups receive 104 hours per year for each year of state service. Supplemental credits cannot exceed the number of hours of basic sick leave accumulated.

What is WRS creditable service versus state service?
WRS creditable service could include both WRS service at a local unit of government and WRS service for a state agency. State service is not the same as WRS creditable service. State service is determined by the number of years of continuous service for the state and does not include local service. An employee’s continuous service date includes full years of service even though the employee was working less than full time. An employee’s seniority date is used for this calculation.

What is the value of these credits?
If an employee is eligible, the basic and supplemental sick leave hours are converted using the “highest” rate of pay while in “state service.” Otherwise, the “current” rate of pay is used. An employee eligible for supplemental credits may have the value of these credits calculated using the final average earnings hourly rate used if that is higher. Final average earnings are calculated using the three highest years earnings, divided by the service in those years, divided by the hours worked in those years.

Information