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Faculty Retirement Agreements

Boulder Campus Guidelines 
November 6, 2007
Prepared by Jeffrey N. Cox, AVC for Faculty Affairs
 
As of June 6, 2007, President Brown approved a new policy on Faculty Retirement Agreements:

This policy arose from the work of the Ad Hoc Committee on Faculty Retirement Options which was created to respond to concerns raised by the Faculty Council about the range of retirement options available to faculty. On October 6, 2005, the Board of Regents passed a resolution authorizing the President to create such a policy to expand retirement incentive options.

The present document outlines the Boulder Campus guidelines for implementing this policy. They are designed to put the new policy into practice in ways that will both help the faculty and serve the institution. We all know that the decision to retire is an important one, often a difficult one. It is our hope that these guidelines will help faculty think through their options as they approach retirement. They are also designed to secure the best interests of the University.

It is important to recognize that Faculty Retirement Agreements are not necessary in many cases where a faculty member wishes to retire. Indeed, most faculty retire with the benefits available under normal retirement policies; they do not need a retirement agreement. In some cases, it will serve both a faculty member and the institution to create such an agreement. The President’s policy states that all retirement agreements must meet “the overall needs of the University. No faculty member has a right to such an agreement.” Such agreements will be created only when all parties are convinced it serves them well. The incentives outlined in the policy are not entitlements but a list of potential tools available to assist the University in meeting its goals with regard to faculty staffing needs. The use of one or more of these is not standard practice, but rather these tools are available to be used in extraordinary circumstances as approved, and deemed appropriate and feasible, by the chair/director, dean and provost. As is indicated below, applications for retirement agreements will be reviewed by the Provost; a case must be made that an institutional good is met by creating the agreement. Such agreements are also subject to the availability of funding.

General Procedures:
In most cases, faculty will begin their discussions about retirement with the chair of their unit; they will want to talk about the faculty members’ plans and the needs of the unit. A faculty member may decide to pursue normal retirement; if so, the individual need only inform the campus of her/his decision by sending a letter through the chair to the dean and the Office of Faculty Affairs, and the Office of Faculty Affairs will provide the faculty member with information. If there is a decision to pursue a retirement agreement, the dean’s office will need to be consulted. The Office of Faculty Affairs is available to offer advice on retirement agreements. All retirement incentive agreements must include a statement by the faculty that s/he will relinquish his/her tenure on the date which shall be specified in the agreement. If a faculty member and her/his chair decide that a retirement agreement is appropriate, the faculty member should create a memo outlining the terms of the agreement. This should be approved by the chair and the dean’s office and sent to the Office of Faculty Affairs. Faculty Affairs will consult with Legal Counsel and Payroll and Benefit Services on such agreements. If OFA agrees with the proposal, it will draft a Faculty Retirement Agreement to be reviewed and signed by the appropriate persons.

The policy on Faculty Retirement Agreements grants the authority to approve such Agreements to the Chancellor, but allows the Chancellor to delegate that authority to the Provost. On the Boulder campus, that authority is delegated to the Provost who has the final authority to approve or to reject all agreements. All retirement agreements will be submitted to the Provost for approval. In making a request for a retirement agreement, the dean should make clear what institutional good is being served by the agreement; a case for a retirement agreement might include long term savings, the opening up of a faculty line for a new hire, an ability to adapt to changing academic goals, etc.

Eligibility:
A faculty member is only eligible to retire once her/his combined age and years of service total at least 70. If the phased retirement period ends prior to the individual’s age and years of service totaling 70, the faculty member will not receive the University of Colorado retirement benefits available to those who do meet the minimum established age and years of service requirements.

Faculty who are tenured or tenure-track and who are employed at fifty percent time or greater and meet at least the minimum combined age and years of service requirements contained in Regent Policy 11-I are eligible for retirement incentive agreements. Non-tenure track faculty are only eligible for the phased retirement agreement designed for them.

For Tenure Track Phased Retirement Agreements: All tenured and tenure track faculty members who are employed at fifty percent time or greater and: 1) will be at least 55 years of age by the end of the term of the phased retirement agreement; and 2) whose age and years of half time or greater service at the University total at least 65 are eligible to participate in this phased retirement program (“Program”).

For Non-Tenure track Faculty Phased Retirement Agreements: All non-tenure-track faculty members who are employed at fifty percent time or greater and: 1) will be at least 55 years of age by the end of the period of the phased retirement program (“Program”); and 2) whose age and years of half time or greater service at the University total at least 65 are eligible to participate in this Program.

Authorized Incentives for Tenure Track Faculty:
The new policy creates a menu of incentives that may be offered by the campus when a faculty member is ready to retire. Agreements will need the concurrence of the faculty member, the chair, the dean, and the Provost.
  1. Negotiated Differentiated Work Load: This is currently available; no changes in practice are needed. (See Faculty Retirement Agreements IV.B.1.b.)

  2. Post-Retirement Employment or Consulting Opportunities: Under this incentive, one year’s worth of the faculty member’s pre-retirement base salary may be set aside to be used as payment after retirement for consulting, research, or other services (teaching, advising, administration, service) for a specified period. This may be a multi-year commitment until funds are exhausted. The faculty member is an “at-will” employee during this period. This does not preclude additional employment beyond the term of the agreement and/or exhaustion of funds. (See Faculty Retirement Agreements IV.B.2.)

    This incentive would be most likely used in a case where a faculty member is ready to retire but there is a mutual benefit to the individual and the institution to maintain a working relationship over a few more years after the individual leaves her/his faculty position.

  3. Increased employer contribution toward insurance costs upon retirement. Up to an additional 50% (not to exceed 100% of the total premium cost) may be paid by the University for medical insurance costs of retirees who reside outside Colorado and choose one of the University’s medical plans. This increased contribution may continue until Medicare eligibility or until the retiree again resides in Colorado. (See Faculty Retirement Agreements IV.B.3.)

    This incentive may be used when it is in the institution’s interest to help a faculty member move into retirement who is also moving out of state.

  4. Increased base academic year salary. The salary may be increased up to 6% over and above the average faculty salary increment for the campus for two years preceding retirement. (See Faculty Retirement Agreements IV.B.4.a.)

    Such incentives are often used at other institutions when such increases would change the payout on a faculty member’s retirement plan; that will not be the case for our faculty. Such incentives will most likely be used when such an increase will help a faculty member make a decision to retire and the institution has an interest in freeing up a line.

  5. Phased Retirement for Tenure Track Faculty. We, of course, currently have a phased retirement program, but the new policy makes available some new options. In most cases, phased retirement agreements for tenure track faculty on the Boulder Campus will be for three years; when it is to the mutual benefit of the faculty member and the institution, that agreement can be extended another two years. While the policy allows for a sabbatical to be included as part of the phased agreement, in most cases tenure track faculty on the Boulder Campus will not be granted a sabbatical during the term of the agreement insofar as sabbaticals are investments in the future development of our faculty.

The new features of the new phased retirement agreements can be outlined:

  1. Phased retirement agreements may be requested for a period of up to 5 years. (But see above. Previously phased agreements had a maximum of 3 years with the possibility of requesting an additional 2 years.) (See Faculty Retirement Agreements II.A.)
  2. The pay level and workload must remain at an average of 25% or more (previously 50%) over the course of the agreement. (See Faculty Retirement Agreements II.B.2.)
  3. Workload and duties may be renegotiated annually. (See Faculty Retirement Agreements II.B.5.)
  4. The taking of a sabbatical may be included as part of the phased agreement; they can be taken during phased retirement only if part of the agreement. (See above for campus view on this. Previously faculty with a retirement agreement were no longer eligible for sabbatical.) The faculty member must return for the equivalent of one year of full-time service. (See Faculty Retirement Agreements II.B.6.)
  5. Retirement plan contributions will be paid at two times the workload percentage, to a maximum of 10% of full salary. For example, a 40% workload would be paid based on 80% of salary, or an 8% contribution. (Previously faculty could not drop below a 50% appointment. University contributions continued at 10% of salary.) (See Faculty Retirement Agreements II.C.1.)
  6. University contributions to group insurance plans shall continue as if the faculty member were 100% time. (No change.) (See Faculty Retirement Agreements II.C.2.)
  7. Employee may begin retirement plan distributions at age 59 ½. (See Faculty Retirement Agreements II.C.3.)
  8. The University must continue to be the faculty member’s primary professional commitment. (See Faculty Retirement Agreements II.D.2.)
  9. Faculty must continue to participate in annual evaluations, post-tenure review, etc. (Campus Administration is requesting a change in this portion of the policy. Previously post-tenure reviews were no longer required.) (See Faculty Retirement Agreements II.D.3.)
  10. A request for participation in a phased retirement program must be filed with the department chair or the dean by December 1 for a program to begin the following Fall semester; it must be filed by May 1 for a Program to begin the following Spring. The dean’s office should forward the request to OFA in a timely fashion, normally within one week. The campus will notify the faculty member whether the request is granted or denied by March 31 for the Fall semester or September 30 for the Spring semester. Requests filed after the due dates may be considered but may be considered untimely; late requests will be handled by the campus as expeditiously as possible.
  1. Phased Retirement for Non-Tenure Track Faculty. The general rules governing these agreements are the same as for tenure track faculty, except that the agreed term of the agreement may be from one semester to up to one academic year.
  2. A description of the new Retirement Incentive Agreement Program may be found here.

    Related templates may be found here and here.

 

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