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Waunakee amends handbook to transfer retirees’ unused sick leave to HRA at retirement
Summary
The board approved a handbook change to deposit full unused sick leave into a retiree Health Reimbursement Arrangement (HRA) account at retirement rather than spreading payments over multiple years; staff said the village set aside funds in 2020 to cover conversions.
The Village of Waunakee approved a change to its employee handbook to allow full unused sick leave to be converted and deposited into a retiree Health Reimbursement Arrangement (HRA) account upon retirement.
A village staff member explained that when the village adopted a high-deductible health plan and an HRA, the municipality used a formula to smooth conversion payments over time because the budget could not immediately fund full deposits. "At the time we did that, our budget was not such that we could pay the entire amount of the conversion over to the HRA account right at retirement, so we developed a formula and we were smoothing it out over the period," the staff member said. The staff member added that in 2020 the village set aside funds to cover the full conversions but the handbook language was never updated to reflect paying the conversion at retirement.
The proposed amendment also addresses what happens if a retiree dies before receiving all scheduled deposits; staff said transferring the full balance at retirement would ensure the retiree's estate receives any remaining funds. Trustees discussed how many employees are affected; staff estimated roughly 40–50% of full-time employees remain eligible under the older hire date provisions and that union police officers are included under the benefit.
The board moved, seconded and approved the handbook amendment by voice vote.
