Retirement plan targets long-time employees

by Sarah R. Buchholz, Chronicle staff

n an effort to gain more flexibility within the campus budget, the University is offering a retirement incentive package for employees who are eligible to retire with 80 percent of their salary by June 30. In addition to their state retirement benefits, the campus would provide a one-time payment of 1.65 percent of their base annual salary at the time of retirement times the number of full years of service to the campus.

     An employee earning $90,000, who served the state for seven years before coming to work at the University 25 years ago, would be eligible for a $37,125 bonus. An employee earning $40,000, who served the University for 35 years, would be eligible for a $23,100 bonus.

     The program lends the campus spending flexibility by funding the bonuses centrally, rather than through the departments where the retirements are taking place, and housing the savings centrally, as well. In the final analysis, funding the bonuses incurs no cost, said James Coopee, personnel administrator, because the bonus and the first year of salary savings occur within the same fiscal year and none of the bonuses will equal a full year's salary. The savings can then be used anywhere the campus needs them.

     "I think there's a lot of interest - a whole lot," said Ron Story, president of the Massachusetts Society of Professors. "I think that a lot of people are going to take it. The only thing that will keep a lot of people from taking it would be if we got the contract funded."

     Employees who could retire with 75 percent of their salaries by the end of the fiscal year may apply, but approval for such retirement bonuses will be at the sole discretion of the chancellor.

     All five UMass campuses have employees who would be eligible for the deal, but only the Amherst and Lowell campuses have opted to instate the program, according to Kevin Barrett, assistant director for Human Resources in the President's Office.

     Because the campus only tracks service rendered to the University, it's difficult to know how many employees are eligible for the offer, Coopee said. Other governmental service, including teaching at other universities, military service, and work for state agencies, counts toward one's standing in the state's retirement plan.

     Coopee said his office is aware of approximately 115 employees eligible to retire at 80 percent.

     "The vast majority of them are faculty," he said. Approximately 35 more are at the 75 percent level of eligibility, he said.

     Applications for the program are due April 1. Employees have seven calendar days from the date they apply to withdraw, after which the application, which is a formal resignation (intent to retire), is irrevocable. Employees who are accepted to participate must retire on or before June 30. Exceptions, not to exceed one year, may be made on an individual basis by the chancellor.

     Employees who have successfully applied for the program must apply to the state retirement board through the campus's Division of Human Resources in a timely manner in order to receive their bonus payment.

     Coopee said that the one-time payment, which will be made shortly after retirement, will not be retroactively altered should collective bargaining contracts be ratified after the employee retires. However, the state retirement board will be notified of retroactive changes to salary in order to properly compensate retirees.

     Applications are available from deans, directors and department heads and from the Division of Human Resources.