Details concerning the voluntary enhanced retirement program (VERP) were announced by Interim President Bill Kauffman in an April 2 letter addressed to faculty and staff. The letter was followed by direct emails to all eligible employees confirming their eligibility, and personalized packets containing more information, including financial details, will be mailed to the homes of employees by the end of the month.
Eligibility for participation in the VERP is based on one of two qualifications: those who are 60 years of age with seven or more qualified continuous years of service at SLU or those whose age plus continuous years of service sum to at least 75. The offer has also been extended to those who are currently in phased retirement or those whose last official day was Dec. 31, 2013 or later. The program offers a one-time lump-sum payment equal to a year’s salary with “an additional two weeks pay for every year worked beyond 25 years of qualified service,” according to Kauffman’s letter. A June 1, 2014 deadline has been set for accepting the enhanced retirement plan and most who do accept will officially retire on July 1.
Attempts were made by the committee to avoid a lump-sum payment due to heavier tax rates, but tax codes made other options impossible. Government laws also put a restriction on the amount of time eligible retirees were allowed to deliberate over the offer.
Greg Marks, an associate professor of mathematics and member of the Faculty Senate Executive Committee, said the committee’s initial response to the VERP announcement was “cautiously positive.” Concerns have been raised by faculty, staff, students and administrators alike concerning the impact of the VERP on various academic departments. Chris Sebelski, an associate professor of Physical Therapy and the chair of the Faculty Senate Compensation and Benefits Committee, noted the narrow window of operation as a particular concern, especially when considering the effect the program will have on students.
“I would say the academic community as a whole is and remains extraordinarily concerned about the impact this will have on the delivery of information to the students,” Sebelski said. “There are a lot of advantages to taking the VERP program for those who have been loyal to the institution… [but] someone has now until June 10 to make that decision and by that point there’s a lot of planning already in place for summer courses and also for the fall courses.”
According to Ellen Harshman, Interim Vice President of Academic Affairs, contingency plans have been in development since the VERP was first announced in order to handle such issues.
“Although we won’t know the impact until people decide for themselves whether or not to accept the offer, we are committed to providing our students an outstanding educational experience and we are confident we will continue to be able to do that going forward,” Harshman said.
She also made the point that retirements occur every year. Seventeen faculty and 25 staff members retired in the last academic year.
Participation in the program provides continued coverage for those under 65 who are enrolled in the University Health Plan, including coverage for eligible dependents, for a duration of five years or until the retiree turns 65, whichever comes first. It also offers a $2,000 reimbursement for financial planning.
Qualified employees are expected receive the full financial details of their retirement offers by the end of the month, making interest in the program hard to gauge. According to Sebelski, estimates as to what number of faculty and staff might accept the offer and how many would have to accept for the program to be a considered success were provided by Towers Watson, the consulting firm hired to help in preparing the VERP. The estimates were based on the results of similar programs at other universities and the unique circumstances at SLU. Chief Financial Officer David Heimburger said that while it’s impossible to predict the amount of employees that might accept the offer with a high level of certainty, similar programs have provided “significant savings for other organizations.”
Marks stated that interest in the retirement offer may vary, as different departments are dominated by different mind sets.
“For a lot of faculty in areas close to mine we just love teaching and love research and really have no desire to stop,” Marks said. While he is unaware of any faculty in his department interested in the program, Sebelski has heard of multiple staff members in her department that are strongly considering the plan.
University plans in terms of hiring new staff and faculty have not been set. Kauffman stated the university will attempt to develop guidelines as to the best way to address vacated positions with an emphasis on SLU’s long-term organizational needs. According to Sebelski, an email from Heimburger requested that members of the VERP committee remain available as the guidelines are prepared. Additionally she stated that Harshman said, “she would like [the hiring] procedures to be explicit and also to make sure the academic stakeholders were actively involved in the development of those procedures.”