October 30, 2025
Lump Sum Separation Pay Election Form
Action Required: Share the following information with all human resources (HR) office employees.
Description: To help ensure that your lump sum separation Personnel Action Request (PAR) packages are accurately processed and meet the mandated requirements, use the tools in the Lump Sum Separation Toolkit and follow the tips below.
- Lump Sum Separation Pay Election Form: Which version to submit?
- The State Controller’s Office (SCO) will accept the previous version of the election form (with the Full Deferral Option) from employees separating no later than October 31, 2025. If an employee has a November 1, 2025, or later separation effective date, the employee must submit the revised election form (available on the Savings Plus Lump Sum Separation Pay webpage). If SCO receives a separation PAR package with an effective date of November 1, 2025, or later, and it includes the prior version of the election form, SCO will send the HR office a Ding Notice, indicating that an incorrect version of the election form was submitted and to submit the correct version (see Payroll Letter #25-015).
- It is critical to monitor your Departmental Universal Email to receive communication from SCO, as this will include all Ding Notices.
- The State Controller’s Office (SCO) will accept the previous version of the election form (with the Full Deferral Option) from employees separating no later than October 31, 2025. If an employee has a November 1, 2025, or later separation effective date, the employee must submit the revised election form (available on the Savings Plus Lump Sum Separation Pay webpage). If SCO receives a separation PAR package with an effective date of November 1, 2025, or later, and it includes the prior version of the election form, SCO will send the HR office a Ding Notice, indicating that an incorrect version of the election form was submitted and to submit the correct version (see Payroll Letter #25-015).
- SECURE Act 2.0 Section 603, and How it May Impact Age-Based Catch-Up Contributions.
- Beginning January 1, 2026, retiring employees earning more than $145,000 (indexed) in Social Security (FICA) wages (Box 3 on W-2) in the prior year must make all Age-Based Catch-Up contributions as Roth contributions.
- This provision applies to employees making Age-Based Catch-Up contributions in 2026 or later.
- See Savings Plus Lump Sum Separation Pay FAQs for more information.
Population Affected: All HR Offices