NYC TRS CAR Days at Retirement: How Cumulative Absence Reserve Works

Your Cumulative Absence Reserve (CAR) balance can affect separation planning, but the rules for using or paying out unused days are handled by the employer. Confirm your balance and the applicable cash-out or terminal-leave rules with payroll before choosing a retirement date.

What CAR Days Are

Cumulative Absence Reserve is a bank of unused sick days. Confirm the number of eligible days in your employer's records and the accumulation rules that apply to your title and agreement.

What to Confirm About a Cash Out

Employer payroll handles separation, terminal leave, and any applicable sick-bank payout; TRS administers the pension. The applicable employer and title rules determine whether unused CAR days are payable and how any payment is calculated.

Key points:

• Payout amount: Confirm your eligible balance and the calculation with employer payroll.
• Timing: Ask payroll when it expects to issue any payout after your effective separation date.
• Tax reporting: Confirm with payroll how any payment will be reported and which tax year it will fall in before timing your retirement around it.

Confirm Whether CAR Payments Affect FAS

TRS calculates FAS from pensionable earnings. Before including a CAR-related payment in your estimate, confirm with TRS whether that specific payment is reported as pensionable earnings and check the pensionable earnings shown in MyTRS.

Employer payroll and TRS handle different parts of the process: payroll handles any applicable sick-bank payout, while TRS calculates the pension from the earnings and service it recognizes.

Do not include a possible employer payout in your recurring monthly retirement-income estimate.

Terminal Leave vs a Possible CAR Payout

Employer payroll handles terminal leave and sick-bank payouts, but the rules for using CAR days as terminal leave depend on your title and agreement. Before comparing terminal leave with any payout, confirm with payroll whether CAR days can be used that way and ask TRS how the approved leave affects your service credit and pensionable earnings. Confirm active and retiree health-coverage dates with your employer and OLR.

Planning the Payout

Two practical considerations:

1. Tax treatment. Ask payroll and a tax professional whether any CAR payment is taxable and which tax year it will be reported in before timing your retirement around it.

2. Coordination with TRS paperwork. DOE payroll handles separation and any applicable sick-bank payout, while TRS handles the pension application. Confirm your CAR balance with payroll and whether any related payment appears in your TRS pensionable-earnings record.

The NYC TRS Retirement Guide covers how to coordinate employer sick-bank handling with the overall retirement income timeline, TRS advance payments, TDA distribution, and Social Security.

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