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University offers incentives to staff for early retirement
STANFORD -- Stanford University trustees approved an early retirement incentive program for staff on Tuesday, Feb. 11, as part of the university's current budget-trimming process.
The incentive plan would provide an alternative to lay-offs in many departments by making it possible for approximately 1,200 of the university's 8,000 staff members to apply for early retirement between March 15 and Aug. 31, 1992.
Non-tenure-line faculty, senior lecturers and senior research associates also may apply for this program. Those who are eligible and opt for retirement by Aug. 31, 1993, would receive supplemental pay as a recognition of their service to Stanford, and they would be eligible for university medical and tuition grant programs.
Those who are eligible for the program fall into two categories:
Those who are 55 with 10 years of service are already eligible for retirement. The new incentive program, however, offers them supplemental pay in addition to the other benefits of retirement.
The incentive program is the first opportunity for those under 55 with substantial years of university service to receive retirement benefits, which include retaining eligibility for the university tuition grant program and its medical insurance programs. They would also receive the supplemental pay incentive.
The amount of the retirement pay incentive increases with the length of career employment at Stanford, said Jim Franklin, manager of the university's benefits programs.
"The minimum will be four months of salary with 10 years of service, and the maximum will be 12 months of salary with 25 years' service," he said.
The incentive will be paid as a salary supplement in the time period between the approval of the employee's retirement or the date on which he or she becomes eligible, whichever is later, and his or her elected retirement date.
Eligible employees will be notified by mail in early March, Franklin said, and managers will get lists of employees who are eligible in their areas.
Currently, employees in collective bargaining units are not covered by the new program. Extension of the early retirement benefit to them would be subject to agreements between the university and the unions who represent them - the United Stanford Workers and the Stanford Police Officers Association.
An early retirement incentive program already exists for tenure-line faculty, although it is being phased out. Eligible faculty may apply before Aug. 31 for retirements as late as Sept. 1, 1994. As part of a phase-out of that program, Provost James N. Rosse notified tenure-line faculty by letter on Dec. 20 of the application deadline. Questions about the faculty program can be directed to Kathryn Gillam, assistant provost for faculty affairs.
"The new staff incentive plan offers a positive way of down- sizing and provides recognition of career service," said Franklin.
The plan is only for voluntary retirements, and participation in the program would not normally be denied, he said. The effective date of the retirement is subject to mutual agreement, with management making the final determination based on business necessity, according to the description of the plan approved by the Board of Trustees.
"I have heard from a number of staff who feel an early retirement option is an important alternative for the university to make available as part of its budget reduction process," said Robert Street, vice president for libraries and information resources. "Even though it is a limited program, I think it will be greeted with enthusiasm by staff in my area. We intend to work directly with individuals in Libraries and Information Resources to make sure they have a full appreciation of retirement and the economic and career aspects of it."
Franklin stressed that information on how to calculate the incentives for specific individuals is not yet available from the Benefits Office. Such information will be available in writing to all those who are eligible prior to the opening of the application period on March 15, he said.
"There will be seminars for managers in March to fill them in on the program and how it can be managed," Franklin said. Seminars for eligible employees will be held regularly from March through August, he said.
The Benefits Office staff is developing printed materials to help employees assess the appropriateness of the program to their particular needs, he said.
The short-term costs and longer term savings of the program to the university cannot be calculated until it is known how many people choose to take advantage of the program, Franklin said. The one-time costs of the incentives will be added to the fiscal 1993-94 university operating budget, and the savings will show up yearly in the form of reduced salary and benefits costs for departments, according to Joanne Coville, acting controller.
Over 11 years, the savings could be as much as $4 for every $1 of incentives, Franklin said. Eleven years is the average length of time that early retirees would have worked at Stanford had they chosen to delay retirement until age 65 .
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