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Employer Reporting Basics

What to Report at Retirement (Including Lump Sum Payments)

Remember, not all items considered taxable by the Internal Revenue Service (IRS) constitute salary as defined by the Retirement and Social Security Law. While certain lump sum payments made at the time of a member’s retirement may be used in the final average salary (FAS) calculation, instead of including these payments on the monthly report, you would list them on the Statement of Accrued Payments and Leave Credits form (RS6221) Adobe pdf. If you are enrolled in our Retiring Employee Acknowledgement Program (REAP), this form is available to you online around the member’s date of retirement. If you are not enrolled in REAP, we mail the form to you.

On the Statement of Accrued Payments, you should list:

  • The employee’s salary for the final three pay periods
  • Any payments made in anticipation of retirement
  • Any other lump sum payments made such as payments for unused vacation
  • The last day of paid service
  • The total number of unused sick days credited at retirement

We use this information to reconcile the member’s reported salary, ensure that allowable payments are included in the FAS, and calculate any additional service credit that unused sick leave may provide.