8.11 .1 Phased Retirement
Approved by President on April 9, 1992, Consultation: Academic Council 1992
The University offers two alternatives for Phased Retirement. These are:
- Phased reduced teaching program
- Phased retirement teaching program
Faculty considering either program should consult with the DHR concerning the possible effect of entering into the program on such issues as dismissal for cause, death, disability, possible consequences of University financial exigency, and other contractual matters or concerns.
1. Phased Reduced Teaching Program
The Phased Reduced Teaching Program is designed to allow the Provost to offer an individual faculty member a basis for reducing their teaching load assignment prior to their eventual retirement.
The program is limited to tenured faculty members who are at least 60 years of age and who have had 15 years of full-time service at the University as of the beginning of the fiscal year in which the offer is made.
The voluntary phased reduced teaching program continues f or a maximum of five years or until age 65, whichever comes first. Each phased reduction in teaching load has a corresponding reduction in salary. Increases in teaching work load assignments are not permitted once the phased reduced teaching load commences but further work load reductions are allowed.
2. Phased Retirement Teaching Program
The Phased Retirement Teaching Program consists of a full-time teaching period of N (2 to 6) years followed by a second period of N years during which the faculty member would teach 1/2-time. During the full-time teaching period, the faculty member should prepare for the period of reduced salary during the second 1/2-time teaching period.
The salary the faculty member will receive from the University during the 1/2-time teaching period will be 50% of annual salary plus an incentive salary increment of 1% of annual salary per month for a total of 62% of annual salary.
There are several options which are available from TIAA to provide additional sources of income during the second period.
- The University may set up a deferred income account, during the full-time teaching period, which would be vested to the faculty member during the 1/2-time teaching period. For example the University would pay the faculty member 80% of annual salary and deposit 20% of annual salary in an interest bearing account with TIAA. (The percentage would be decided by the faculty member.)
During the half-time teaching period, the faculty member would receive 62% of annual scheduled salary plus the percentage of his/her salary with interest which had been placed in the interest bearing account.
- The faculty member contributes to a Supplemental Retirement Account during the full-time period which is available for the 1/2-time teaching period. The internal revenue code sets a limit of how much can be tax- sheltered under salary reduction. TIAA will evaluate individual faculty members for the maximum available salary reduction and set up a tax-sheltered salary reduction account.
- The faculty member arranges with TIAA for the Interest Payment Retirement Option (IPRO) during the 1/2- time teaching period. Under the IPRO plan the faculty member dedicates a portion of his/her TIAA account to receive interest payments on this portion.
Phased Retirement Teaching Program Specifics
Period of Phased Retirement The starting date and period of the phased retirement program will be decided to the mutual satisfaction of the University and the faculty member.
The options for phased retirement are:
|Faculty Age at Start of Program||Options (N-N)|
Teaching Responsibilities The first N-year period is full- time, with a teaching responsibility based on the normal teaching load and teaching year for the unit, i.e., 9 or 11 months. The second N-year period is 1/2 time with a teaching responsibility equivalent to 1/2 the normal N-year load. The teaching assignments will be decided to the mutual satisfaction of the University and the faculty member.
Eligibility Faculty must be tenured and have fifteen years of full-time service at the time of starting phased retirement.
Vesting of TIAA Fund for faculty choosing a deferred income account a schedule for vesting of funds in the TIAA interest bearing account during the one-half time teaching period follows:
|Beginning of Year||Funds Available to Participant from TIAA fund|
|N + 1||Contribution of year 1|
|N + 2||Contribution of year 2|
|N + 3||Contribution of year 3|
|N + N||Contribution of year N|
Phased Retirement Program Details
Annual Salary Increases During the period of phased retirement, the faculty member will receive annual salary increases based on annual salary evaluations, including merit. In making these evaluations, expectations with respect to professional contributions to the University other than teaching will be based upon and commensurate with the individual's teaching assignment.
Benefits The faculty member will receive full benefits based on actual salary for the total period of phased retirement. Upon retirement the participants in the program will receive similar retirement related benefits accorded to other University retirees such as bookstore discounts, reduced athletic ticket prices, and reduced campus parking tag fees.
Older Workers Benefit Protection Compliance At least 4 months before entering a phased retirement program each faculty member will comply with the Older Workers Benefit Protection Act by identifying a period of three weeks in which to consider the option and one additional week after signing the option to reconsider the decision. The faculty member must also be advised in writing by the University to consult with an attorney on the above matters. After adhering to the above conditions and time frames the decision becomes irrevocable unless under changed conditions, by mutual consent of the University and the faculty member.
Replacement Faculty Funding The "saved" portion of the budgeted salary and fringe benefits of the faculty member who accepts the phased retirement options will be calculated. The Provost may use these savings to hire adjunct faculty to teach on a part time basis in any school or department as needed. A new full time faculty member may be hired when the compensation savings are sufficient to fund the new salary and fringe benefits, with the concurrence of the President.