Frequently Asked Questions: 2024-2025 SERP
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1. What is the Supplemental Early Retirement Plan (SERP)?
Read the final agreement here.
2. Am I eligible for the SERP?
3. How much money could I receive if I opt to take the SERP?
4. How is my final pay with SDUSD established?
6. Who does the SERP apply to?
7. Do I have to retire under STRS or CalPERS to get the SERP? Can I just resign?
8. Are there other options besides a monthly payment under the SERP?
9. What are the timelines for submitting my resignation from SDUSD?
10. Can I still work summer school if I take the SERP?
11. If I take the SERP, can I still work for the District?
12. What if I am older than the ages listed in the proposal?
13. Can the District withdraw or cancel the SERP?
15. Is there a tax liability for the SERP annuity?
16. I’m not sure if I can retire this year. Will a SERP be offered next year?
17. Is accepting the SERP a good deal?
18. I have worked as a part-time employee with the District for a long time, do I qualify?
19. I want to retire before the end of the year. Can I get the SERP?
20. Why does the District keep saying the SERP is not intended to be a cost savings measure?
What is the Supplemental Early Retirement Plan (SERP)?
The SERP is a 403(b) annuity plan, held by Pacific Life Insurance Company, to which the District annually contributes cash for the next five years (starting on July 10, 2025 through July 10, 2029) at the rate of 14% of the employee’s final salary a year, adding up to a 70% total of the employee’s final salary. The employee would receive monthly cash payments from this annuity plan. These incentive payments would commence on a certain date and end at a specific point in the future (for most participants, that date would be August 1, 2025).
The SERP is also an incentive plan designed to give qualified bargaining unit members the option to resign from the school district, either to retire or pursue employment opportunities elsewhere. The District would use this employee attrition as an alternative to using layoffs to fix budget concerns in the next year and beyond.
Read the final agreement here.
Am I eligible for the SERP?
See Section 1.0 in the final agreement which lists the eligibility requirements.
The District, through PARS, has sent an announcement letter and mailed enrollment packets to eligible employees so they can decide whether or not they want to enroll. Members should expect to receive these the first week of December. These are sent directly from PARS to home addresses shared with them by the District.
The District provided a list to SDEA with all employees eligible for the SERP this year, which is how targeted emails have been sent. Not sure if you are on that list? Search for your employee ID number here to verify if you were included in the District’s list.
How much money could I receive if I opt to take the SERP?
That depends on which salary schedule the employee is on. The District’s contributions to the annuity plan for each employee will be the lesser of:
1) seventy (70%) percent of the employee’s final pay; or
2) the maximum amount of the top step of the teachers’ 184 day salary schedule, as of September 30, 2024, of $124,050.09. (Note: This was included in the District’s proposal - most likely because this same SERP has been offered to all bargaining units, including Administrators. Section 3.1.b.2 of the SERP would not apply to our certificated unit.)
The amount of the monthly payment shall be fixed upon the annuity purchase date, and shall not increase nor decrease afterward for any reason.
How is my final pay with SDUSD established?
Final pay is determined based on the employee’s salary schedule step and column placement as of October 22, 2024, multiplied by the employee’s contractual FTE.
What if I am on a Reduced Workload Plan (RWP), or Leave of Absence (LOA), how is my final pay calculated?
Whatever your salary placement and FTE were prior to going on a RWP or LOA determine your final pay, if you are in either of these situations. Final pay is not determined on your current rate of pay in these cases (for example, $0 if you are out on unpaid leave, or 50% or more or your yearly salary if you are on half-pay sick leave, or a RWP at a FTE above 50%).
Who does the SERP apply to?
All contracted certificated employees represented by SDEA who will have worked for SDUSD for at least 5 years by June 30, 2025, and who are eligible to retire under STRS (age 55 with 5 years of STRS service credit or age 50 with 30 years of STRS service credit) or CalPERS (age 50 with 5 years of PERS service credit) as of June 30, 2025.
Do I have to retire under STRS or CalPERS to get the SERP? Can I just resign?
To get the SERP, the employee only has to resign from the District. There is no obligation to retire under STRS or CalPERS. One could theoretically go work in another school district, or anywhere else of their choosing, should they opt to take the SERP and resign from employment with SDUSD.
Are there other options besides a monthly payment under the SERP?
Yes, the SERP also offers a joint-and-survivor payment plan, a lifetime plan with a ten (10) year guarantee, and fixed-term monthly payments from five (5) to fifteen (15) years. These payments are guaranteed to the participant for the full term selected.
What are the timelines for submitting my resignation from SDUSD?
Based on the timeline in section 5.0 of the final agreement, interested employees would have to submit SERP registration paperwork by January 15, 2025, and submit a resignation from District employment with an effective date of no earlier than the end of the school year, and no later than June 30, 2025, unless one thinks they will work summer school. (See section 1.0.f.)
Can I still work summer school if I take the SERP?
Assuming the employee gets selected for summer school, yes they can. The employee would have to fix their resignation date as of July 3, 2025, rather than June 30, 2025 on their resignation paperwork.
If I take the SERP, can I still work for the District?
If you were to become reemployed by the District in a contracted position, then you forfeit your rights to the SERP, or any other future SERP. In other words, if you opt to take the SERP, you can only work for the District as a sub, hourly employee, professional expert, or consultant in the future, in order to not forfeit the SERP.
What if I am older than the ages listed in the proposal?
The initial District proposal lists the minimum ages of retirement eligibility in section 1.1.d. of the agreement. (So being over 55 does not disqualify you for the SERP!)
Can the District withdraw or cancel the SERP?
In the event that there are not enough participants to make the SERP cost-effective, SDUSD’s Board of Education could withdraw the SERP.
How does the monthly health care premium cost offset from the retiree medical benefits trust fund benefit me?
Members who qualify for the SERP and have 17 years of service with SDUSD also qualify for a $450 a month stipend towards the monthly premiums of a District health care plan as a bridge to Medicare. Remember that regardless of the SERP details for this school year, it will not remove any of the existing rights in our union contract or any previous MOUs (for example, the retiree medical benefit increase in April 2024.) Make sure to refer to Section 9.8 in the union contract to review retiree medical benefit eligibility requirements, and see this Know Your Rights Flyer as an additional resource. As a reminder, in order to get the cost offset, you MUST retire under STRS/PERS, not just resign from SDUSD. Anyone resigning to get the SERP, and not retiring under STRS/PERS, will forfeit access to this retiree medical benefit in the future.
Is there a tax liability for the SERP annuity?
Everyone’s tax situation is different. Please consult your personal tax consultant for specifics on how the SERP could impact your tax liabilities.
I’m not sure if I can retire this year. Will a SERP be offered next year?
The District has historically been unwilling to offer a SERP while they are paying off the previous retirement incentive. Given that this year’s SERP is focused on reducing staff through attrition and avoiding layoffs at the end of the 2024-25 school year, it is highly unlikely that the District will offer a SERP next year.
Is accepting the SERP a good deal?
Everyone’s circumstances are different. How a SERP impacts you depends on your personal financial situation. Anyone interested in taking the SERP should consult with a STRS counselor and financial professional to determine if it meets their needs.
I have worked as a part-time employee with the District for a long time, do I qualify?
If you have worked for SDUSD for 5 or more years, you would be eligible. The SERP is not contingent on how much time you have worked in total for SDUSD (50% of 20 years, for example, equals 10 years of actual service credit), just on how long you have been employed by SDUSD (if you started 20 years ago, you have been employed for 20 years, regardless if that was work done as a part-time employee). In other words, if your seniority date is prior to August 1, 2020, you would be eligible if you meet the other criteria, even if your FTE is below 1.0.
I want to retire before the end of the year. Can I get the SERP?
The SERP is only available to staff who retire or resign at the end of their work year. See section 1.1.f of the agreement.
What happens to my sick days if I resign rather than retire?
If you leave employment with the district, you have three options for your sick leave. One, if you are switching jobs to a new school district, state law allows you to take any accrued regular sick leave (not half pay) and transfer it to the new school district. Two, if you retire from a district, you can convert it to STRS credit, in accordance with STRS rules. Three, if you are quitting and not working in another district, nor retiring, you lose the accrued leave, since sick leave is not considered wages subject to being paid out to an employee upon separation from employment, under state law.
Why does the District keep saying the SERP is not intended to be a cost savings measure?
The District has proposed that all employees who meet the age and service requirements are eligible, regardless of if their position would need to be filled next year. This means that in some cases the cost of the benefit may surpass the cost of savings. For example, due to the shortage of Ed Specialists the District knows they’ll need to replace any that take the SERP. The District would only realize savings if the person hired for the position is placed on the salary schedule at a lower rate than the cost of the retiree’s SERP benefit.
How do I know what CalSTRS retirement date to use?
The date you should use depends on your calendar, pay schedule, and whether you will be working Summer School. See this memo from CalSTRS and reach out to them directly with questions.