UAMS ADMINISTRATIVE GUIDE

NUMBER: 4.1.16
DATE: 01/25/99
REVISION:

SECTION: HUMAN RESOURCES
AREA: INSURANCE & BENEFITS
SUBJECT: VOLUNTARY EARLY RETIREMENT FOR NON-TENURED FACULTY AND STAFF

PURPOSE

In accordance with Arkansas Act 271 of 1983, and Act 296 of 1995, the University of Arkansas for Medical Sciences is authorized to make available to eligible non-tenured faculty members and staff employees the opportunity to receive certain benefits in exchange for immediate retirement. Participation is strictly voluntary and is not mandated upon either eligible non-tenured faculty or staff or UAMS. Participation is not entitlement, but may be available to qualified non-tenured faculty members and staff employees when:

 

  1. A savings to the University in salary and fringe benefits costs can be demonstrated,
  2. The Board of Trustees of the University of Arkansas determines that the savings realized as a result of the agreement provide for a more efficient operation of the University, and
  3. The terms and conditions of the retirement agreement would not be detrimental to UAMS and its’ programs. Determination of this factor would include, but not be limited to, such considerations as whether sufficient financial and staffing resources will be available to the department, campus, and unit from which the individual is retiring.

DEFINITION OF TERMS

  1. Voluntary Early Retirement – A voluntary election on the part of an eligible employee who plans to retire from UAMS prior to "normal retirement age", in return for incentive financial consideration offered by the institution.
  2. Voluntary election – A decision made by the employee based solely on their wish to elect the voluntary early retirement option, without coercion from any UAMS representative, and in accordance with the rules of the voluntary early retirement plan of the University of Arkansas and applicable laws.
  3. Voluntary Early Retirement Agreement – A written document outlining the terms of voluntary early retirement for the employee and the employer.
  4. Eligible employee - A UAMS employee (non-tenured faculty, classified or non-classified administrative staff) who meet eligibility requirements as established in this policy.
  5. Retirement cost – The cost of all salary and benefits, including future part-time teaching, research, or other employment related costs of the eligible employee.
  6. Replacement cost – The estimated salary and benefits cost of the individual(s) who will be employed to fill the position or responsibilities of the retiring eligible employee.
  7. Retention cost – The last annual salary and benefits costs of the retiring eligible employee, including any increases in salary or benefits approved prior to the effective dates of the Voluntary Retirement Agreement.
  8. Employee Waiver – A signed document in which the eligible employee has voluntarily signed which removes the institution’s obligation to provide 45 days to consider the terms of their participation in the Voluntary Early Retirement Program.
  9. Statement of Assurance – A signed document in which the eligible employee states that they made the election to voluntarily elect early retirement, has been informed of their legal rights under the Age Discrimination in Employment Act, and has been advised and has had the opportunity to seek the advice and counsel of attorneys, accountants, and others who might assist in making an informed decision concerning the Program.
  10. Early Retirement Program Worksheet - A spreadsheet which outlines the cost savings for the institution over a period not to exceed seven (7) years, by the participation of the eligible employee in the Voluntary Early Retirement Program.
  11. Maximum dollar value of benefits – An amount received under the Voluntary Early Retirement Agreement which shall be established by the institution, and approved by the President of the University of Arkansas System, or such lesser amount as is necessary to show a cost savings to the institution within seven (7) years.
  12. Post-early retirement wages – An annual payment for work performed which shall not exceed 30% of the eligible employee’s last full-time annualized salary.

PROCEDURE

  1. The Chancellor of UAMS will determine, based on recommendation of the Vice Chancellor for Administration & Fiscal Affairs, appropriate time(s) during any fiscal year to offer an open window for election of voluntary early retirement by eligible employees.
  2. A request from the Chancellor will be made to the President of the University of Arkansas System outlining the maximum benefit to be paid, and the proposed election window. The President may approve the request to initiate a voluntary early retirement election window.
  3.   Following approval by the President, the Office of Human Resources will prepare communication to eligible employees informing them of the option to elect voluntary early retirement.
  4. During the election window, eligible employees meeting the applicable minimum qualifications for participation in the Voluntary Early Retirement Program may initiate a request for the institution to consider their participation in the program. The request must be submitted in writing by the eligible employee to their department head.
  5. The employee’s department head is responsible for negotiating an agreement with the employee which meets the financial savings guidelines of the program, and is consistent with the incentive options outlined below. Incentive options not specifically listed below must be approved by the Office of Human Resources prior to signing the agreement. The Office of Human Resources is available as a resource for managers to assist in designing employee Voluntary Early Retirement agreements, but is not authorized to furnish legal, tax or other professional advice. In developing the Voluntary Early Retirement Agreement, the eligible employee must be apprised of their rights under the Age Discrimination in Employment Act and be advised to seek the advice of counsel of attorneys, accountants, and others who can provide information that will assist in making an informed decision. In all cases, the eligible employee must be given at least 45 days to consider the Voluntary Early Retirement Agreement and once signed, the employee has 7 days to revoke the signed agreement, unless waived in writing.

Financial incentives to be offered may include, but are not limited to:

Retirement Plan

 The Chancellor will determine the maximum stipend amount for each election window. However, the total stipend amount paid to an eligible employee under an agreement may not normally exceed 50% of the employee’s final salary with UAMS.

  1. Department heads must review each voluntary retirement agreement with their division head for approval.
  2. The Office of Human Resources will serve as a collection point for signed Voluntary Early Retirement Agreements, which have been signed by the eligible employee and their department/division head.
  3. The Office of Human Resources will prepare a report outlying each of the Voluntary Early Retirement Agreements for the Vice Chancellor for Administration & Fiscal Affairs at the end of the election window. The Vice Chancellor will recommend the Voluntary Early Retirement Agreements, which meet UAMS’ needs to the Chancellor.
  4. The Chancellor shall recommend approval to the President, who shall review each Voluntary Early Retirement Agreement with the Board of Trustees of the University of Arkansas or final approval.
  5. The Office of Human Resources shall execute the terms of the agreement, once approved by the Board of Trustees.

REQUIREMENTS

Before a Voluntary Early Retirement Agreement can be approved, savings in salary and fringe benefits costs to the Medical Center must be demonstrated. The cost savings must be realized within seven years of the effective date of retirement. A cost savings will be determined for each year of the seven-year period by subtracting the retirement cost and replacement cost from the retention cost. The fact that a cost savings is not shown in one year will not prevent an employee from qualifying for a Voluntary Early Retirement Agreement if a total cost savings can be realized over the seven-year period. For purposes of this determination,

 

"Retirement cost" means the costs of all salary and benefits, including future part-time teaching, research, or other employment related costs of the eligible, including the University’s portion of FICA taxes;

"Replacement cost" means the estimated salary and fringe benefits cost of the individual or individuals who will be employed to fill the position or responsibilities of the retiring eligible employee;

"Retention cost" means that the last annual salary and fringe benefits cost of the retiring non-tenured faculty member or staff employee, including any increases in salary or fringe benefits approved prior to the effective date of the Voluntary Early Retirement Agreement.

The maximum dollar value of benefits that can be received under a Voluntary Early Retirement Agreement is the annual salary of the retiring employee for the current fiscal year or such lesser amount as is necessary to show a cost savings to the University within seven years.

FUNDING OF VOLUNTARY EARLY RETIREMENT AGREEMENTS

All cost associated with a Voluntary Early Retirement Agreement, including stipends, FICA on stipends, wages, FICA on wages, contributions to retirement accounts, reimbursement of major medical and/or life insurance premiums, and any other costs will be the sole responsibility of the department.

TIME OF AVAILABILITY

Proposals for Voluntary Early Retirement of qualified non-tenured faculty members and staff employees of UAMS will be considered during announced periods of time or windows of opportunity, with retirement to take place at the convenience of the employing department or other unit, but no later than the end of the current fiscal year. Subject to the approval of the Chancellor, UAMS may consider proposals for voluntary early retirement during as many or as few time periods or windows of opportunity as it determines are in its best interests to offer. A window of opportunity may be opened to non-tenured faculty only, to staff only, or to both. There is no requirement that any such opportunities be offered at a later date nor that they will be offered on a regular basis. The University also reserves the right to modify the number of years of continuous employment required for eligibility and the form of benefits available during any given window of opportunity, subject to approval by the Chancellor and in accordance with applicable policies. A request for early retirement must be in writing and must be received by the head of the department and the appropriate supervisor within the window incentive period to be considered under this policy.

ELIGIBILITY

Proposals for voluntary early retirement will be received only from eligible employees who are at least 55 years of age and who have been continuously employed 50% or greater for at least 15 years on the effective date of their retirement. Eligible employees may not currently be on leave without pay or receiving either long-term disability insurance benefits or worker’s compensation benefits.

Eligible employees who have had no more than three years in a leave-without-pay status are not prevented from entering into an early retirement agreement as long as they can otherwise show 15 years of full-time employment. Years of employment will be calculated in whole year increments. In the case of an individual on a 12 month appointment, fractions of years of employment that are 6 months or less will be rounded down to the next lowest full year. Fractions of years of employment that are greater than 6 months will be rounded up to the next highest year. In the case of an individual on a 9 or 10-month appointment, years of employment will be calculated with the fall and spring semester each representing half a year. Time spent in an "off-campus duty assignment" will be counted in computing continuous employment.

 

VOLUNTARY EARLY RETIREMENT AGREEMENT

And

STATEMENT OF ASSURANCE

 

This agreement is entered into by and between , a non-tenured faculty member or staff employee of the University of Arkansas for Medical Sciences, and the Board of Trustees of the University, on this the day of , 19 .

That he or she has been an employee of the University since and currently holds the title of .

That he or she is not on leave-without-pay status, receiving long-term disability insurance benefits, or receiving workers’ compensation benefits;

That on his or her own initiative, he or she has sought an agreement for early retirement, pursuant to Arkansas Code Annotated 24-7-102 and University wide Administrative Memorandum 430.0;

That he or she has been apprised of his/her rights under the Age Discrimination in Employment Act as amended;

That he or she has been advised and has had the opportunity to seek the advice and counsel of attorneys, accountants, and others who could aid her/him in making an informed decision regarding the Voluntary Agreement;

That he or she has been given at least 45 days to consider his or her voluntary early retirement; and

That he or she does hereby voluntarily resign his/her position as

effective , recognizing that his/her employment with the University of Arkansas for Medical Sciences will then end.

The Board of Trustees of the University of Arkansas for Medical Sciences hereby accepts such voluntary resignation and agrees to provide:

1)

2)

3)

This agreement shall be binding on the employee described above and on his/her heirs, estate, and personal representatives, and on the Board of Trustees and its successors; provided, however, that (1) any agreement to pay for part-time services shall terminate for all unaccrued and unearned amounts on the death of the employee described, and (2) all other rights and/or obligations to or for the benefit of the faculty member or staff employee shall terminate at her/his death.

All earlier oral or written agreements regarding employment, between the Board of Trustees of the University and/or the University of Arkansas and are superseded by this agreement. This agreement does not affect or alter the rights, privileges, or options accrued to this date which now has under pension (annuity), insurance, or other plans (if any) in which has participated and to which the University has made contributions, nor any rights, privileges, or options to which retired faculty members or staff employees are entitled because of that status or eligible thereto.

Witness:

Employee

 

Witness: Board of Trustees of the University of Arkansas for Medical Sciences

EARLY RETIREMENT PROGRAM

WAIVER OF 45 DAY CONSIDERATION

 

I, , hereby waive the 45 day period for consideration of the terms of and my participation in the voluntary early retirement program for the University of Arkansas for Medical Sciences. I further state that:

I have voluntarily sought this agreement on my own initiative;

I have been apprised of my rights under the Age Discrimination in Employment Act; and I have been advised and have had the opportunity to seek the advice and counsel of attorneys, accountants, and others who could aid me in making an informed decision regarding the terms of my early retirement agreement.

Employee Date

  

EARLY RETIREMENT PROGRAM

STATEMENT OF ASSURANCE

By my signature below, I, , do hereby

assure the members of the Board of Trustees of the University of Arkansas that I have voluntarily sought participation in the University of Arkansas’ Voluntary Early Retirement Program for Staff and Non-Tenured Faculty; that I have been apprised of my rights under the Age Discrimination in Employment Act; and that I have been advised and have had the opportunity to seek the advice and counsel of attorneys, accountants and others who might assist me in making an informed decision concerning the Program.

 

Employee Date

Witness Date

 

UNIVERSITY OF ARKANSAS FOR MEDICAL SCIENCES

EARLY RETIREMENT PROGRAM

WORKSHEET

 

NAME:

 

POSITION & DEPARTMENT:

 

DATE OF RETIREMENT:

 

BIRTHDATE:

 

YEARS ON APPOINTMENT:

 

AGE AT RETIREMENT:

 

CURRENT APPOINTMENT PERIOD (9 OR 12 months)

 

SALARY – CURRENT YEAR:

 

COSTS AND SAVINGS
  Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Totals
Retention Cost:                
Salary                
Benefits                
Total Cost                
                 
Retirement Cost:                
Salary                
Benefits                
Other                
Total Cost                
                 
Replacement Cost:                
Salary                
Benefits                
Total Cost                
                 
COST SAVINGS