When determining final paid wages after an employee's death, we refer to the organization's policies as well as the UU Retirement Plan document.
Regarding the retirement plan specifically, we refer to Section 2.11 Code Section 415 Compensation:
- “Code Section 415 Compensation” for a Limitation Year means a Participant’s compensation within the meaning of Treasury Regulation Section 1.415(c)-2(d)(3), including any differential wage payments (as defined in Code Section 3401(h)(2)), that are actually paid or made available during such Limitation Year, subject to the following: (i) Code Section 415 Compensation shall exclude amounts paid after a Participant’s Severance from Employment, except for the following amounts paid within the later of 2-½ months after the Participant’s Severance from Employment or the end of the Limitation Year that includes the date of the Participant’s Severance from Employment; (ii) payments of unpaid wages, overtime, bonuses and commissions; and (iii) payments of unused accrued bona fide sick, vacation and paid time off leave that the Participant would have been able to use if employment had continued. Code Section 415 Compensation shall not include amounts in excess of the limitation under Code Section 401(a)(17) in effect for the Limitation Year.
And Section 2.13 Compensation
- “Compensation” means total remuneration paid by an Employer for the Employee’s services and reported on Form W-2 before deduction for elective contributions subject to Code Sections 401(k), 403(b), 125 (including “deemed 125 compensation” as defined in Revenue Ruling 2002-27), 132(f)(4) or 402(h)(1)(B). Compensation includes amounts received as a “housing allowance” which qualify for exclusion from gross income under Code Section 107.
- Compensation excludes: (i) any severance pay whether paid before or after termination of employment, and (ii) additional benefits not paid in cash. Compensation shall exclude amounts paid after a Participant’s Severance from Employment, except for payments of unpaid wages, overtime and accrued vacation leave that the Participant would have been able to use if employment had continued that are paid within the later of 2-½ months after the Participant’s Severance from Employment or the end of the Plan Year that includes the date of the Participant’s Severance from Employment.
After the death of an employee, you will provide compensation for all wages earned until the date of death, including any accrued overtime, vacation and sick leave (if paying sick leave is designated in your organization's policy). Retirement contributions based on your organization's Employer Participation Agreement will be owed on these total payments.