Plan year based on teachers contract year; are teachers terminated on last day of plan year considered terminated from plan last day of plan year?

[Guest jusducki]

Plan runs from 9/1 - 8/31, the same as teachers contract. If school opts not to renew a teacher's contract and teacher is paid through 8/31, are they considered active or terminated as of 8/31? Distributions paid out annually at the end of the year in which they terminate. Thanks....

[JanetM]

In the plans I administer, the logic is if you are paid for 8/31 you are considered an active employee on 8/31. You are terminated at midnight for things like health care coverage and employer contributions. You are considered active on the last day - 8/31.

[Guest jusducki]

I agree they are active on the last day but my question has to do with when they're eligible to get their distribution - can we pay them out now or do they have to wait until after the valuation is done for the 8/31/04 plan year as payouts are done at the end of the plan year in which they terminate. Thanks....

[pmacduff]

08/31/03 is the last day of the plan year; they may be considered "active" on that day, but it is still their termination date. I say they can receive distribution during the 09/01/03_08/31/04 plan year. Term date is not 09/01/2003, right?

[Guest jusducki]

right, term date is 8/31/03 as school contract runs from 9/1 - 8/31. Thanks....