Buydowns and payoffs


What is a Buydown or Payoff?

The term ‘buydown’ is used to describe the process of redeeming a portion of an employee’s vacation accrual. Buydown eligibility and amounts will vary based on the Memorandum of Agreement (MOA) that is specific to the bargaining unit that an employee belongs to.

Most bargaining units have adopted the requirement that an employee eligible to do a buydown must first make an irrevocable annual election by December 31st of the prior year. Please consult your bargaining unit’s MOA to determine your eligibility for a buydown. Eligible employees can make their annual buydown elections in VCHRP.

A payoff occurs on your last paycheck at the time that you separate from County service. You are paid for any remaining balance in your leave banks. 

What is the Advantage of Deferring a Buydown or Payoff?

When you receive your buydown or payoff as cash, it will increase your total taxable income for that year. To avoid the tax implication of a buydown or payoff and to boost your retirement savings, consider deferring your buydown or payoff to your 457 account. 

If you are three years from your retirement date, electing a buydown for the full amount of time that you are allowed can help to increase your final average compensation with the Ventura County Employee’s Retirement Association (VCERA).

Depending on membership type, VCERA will look at the highest 12 or 36 months of compensation (measurement period) at retirement. Within that highest measurement period, VCERA will include the number of redeemed leave hours that the applicable MOA allows a member to redeem. For example, if a member’s MOA allows a maximum leave redemption of 200 hours per calendar year, then VCERA will only include up to 600 hours of redeemed leave in a 36-month measurement for purposes of retirement compensation. Please refer to your appropriate MOA to locate your specific annual vacation redemption limit.

How Do I Defer my Buydown or Payoff?

It is important to coordinate your buydown or payoff with the Deferred Compensation office.  Deferral forms must be submitted no later than the payday prior to your requested buydown or payoff check date. Please see the link below for helpful tutorials on how to complete the necessary forms.

For questions regarding deferring your buydown or payoff to your 457 account,  contact Deferred Compensation at 805/654-2620 or by email at

Did You Know?

Deferring your buydown or your payoff to your 457 is a smart way to save for retirement. It will reduce your taxable income for the year while increasing your contributions to your account.