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PPM 3-41, Early Retirement Program |
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Responsible Office: Human Resources |
1.0 PURPOSE
This policy establishes the early retirement incentives available to University full-time salaried employees who apply for the program.
2.0 DEFINITIONS
2.1 Full Retirement Age (FRA) – The age a person can receive full (100%) social security benefits as specified by the Social Security Administration. (See Appendix 1)
2.2 Full-time – For purposes of this policy, full-time means at least .75 FTE.
3.0 POLICY
3.1 Eligibility. Full-time salaried employees who will have 15 years of full-time service and are within ten years of the Full Retirement Age (FRA) on the date of the proposed retirement are eligible to apply for the early retirement program. Only full-time service qualifies for years-of-service credit. Full-time service will include approved leaves of absence with pay such as sabbaticals. Hourly service is not credited.
3.2 Application and Approval. Forms for application will be made available at the Human Resources Office. An applicant for the program must make a formal request through normal department channels and receive approval from Human Resources and the President. The criteria upon which the application is approved or disapproved shall have a rational relationship to the legitimate needs, well-being, and overall mission of the University. Applicants applying for early retirement must apply early enough to allow for a normal and reasonable approval review cycle and a period of time for review of the contract specified by law.
3.3 Duration. The duration of the early retirement program depends on the point at which the participant enters the program as shown on the table in Appendix 2. The program is intended to be a "bridge" of medical and dental benefits to Medicare at age 65 and a stipend "bridge" to Social Security FRA.
3.4 Stipend. The early retirement stipend depends on the point of entry into the program. Once approved, the stipend percent remains constant throughout the early retirement period. As a bridge to Social Security, the stipend cannot exceed the predicted Social Security eligibility amount at the FRA specified by Social Security. The stipend is paid on the same pay schedule as the payroll for full-time employees.
3.5 Benefits. Early retirees receive medical and dental coverage according to the table shown in Appendix 2. Other salary-based benefits such as base retirement contribution, life insurance and long-term disability coverage cease on the first day of the early retirement except as they may apply to the portion of time in a phased retirement in which the employee continues employment. Because intended as a bridge to Medicare, medical/dental benefits provided by the University will not exceed the Medicare eligibility date (first day of the month in which employee turns age 65).
3.6 Phased Retirement Option. Phased retirement is regarded as a case of early retirement in which the retiree forfeits a portion of their full-time position. Each year of phased retirement exhausts a year of eligibility for early retirement. The total period in years of phased and total early retirement cannot exceed the period for which the stipend and benefits will be paid shown in Appendix 2. The phasing schedule is negotiated between the employee and the supervisor and approved through the same process as other early retirements. The phased retirement stipend is paid as a percentage of the forfeited portion of the base salary. The percentages applied to the forfeited base salary to determine the stipend are shown in Appendix 2. A proration of the health and dental benefit premiums shown in Appendix 2 will be applied according to the particular phased retirement plan approved for the employee.
3.7 Contract. Each approved early retirement shall be initiated by a contract signed by the early retiree and appropriate University administrators. The contract will explain the protection provided to early retirees and allow time for review as specified by law.
3.8 Right to Amend and Terminate Program. This program is implemented by the President, in consultation with the Board of Trustees. This program may be amended or terminated at any time, but no amendment or termination shall affect any participant retired under its provisions, unless required by law.
Revision History
Creation Date: 5-14-80
Amended: 7-13-17; 9-19-24
Appendix 1
| Age to Receive Full Social Security Benefits | |
|---|---|
| Year of Birth* | Full Retirement Age |
| 1943-1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 and later | 67 |
*If you were born on January 1st of any year, you should refer to the previous year.
Appendix 2
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Point of Entry: Number of Years before Full Retirement Age (FRA) as specified by SS Administration |
Period during which the stipend will be paid |
Annual Stipend (As a % of the amount of base salary forfeited. Stipend cannot exceed Social Security at FRA) |
Period during which health/dental insurance will be paid. |
Health insurance premium paid by the University (as a % of the amount paid for a full-time employee) |
Dental insurance premium paid by the University (as a % of the amount paid for a full-time employee) |
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9 to 10 years to FRA |
7 years |
14.28% |
7 years |
71.40% |
57.10% |
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8 to 9 years to FRA |
6 years |
16.7% |
6 years |
83.30% |
66.60% |
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4 to 8 years to FRA |
5 years |
20% |
5 years |
100% |
80% |
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4 to 5 years to FRA |
Lesser of 5 years or FRA |
20% |
Lesser of 5 years or until Medicare eligibility date |
100% |
80% |
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3 to 4 years to FRA |
Lesser of 4 years or FRA |
25% |
Lesser of 4 years or until Medicare |
100% |
80% |
| 2 to 3 years to FRA | Lesser of 3 years or FRA | 30% | Lesser of 3 years or until Medicare eligibility date* | 100% | 80% |
| 1 to 2 years to FRA | Lesser of 3 years or FRA | 30% | Lesser of 2 years or until Medicare eligibility date* | 100% | 80% |
| Less than 1 year to FRA | FRA | 30% | Until Medicare eligibility date* | 100% | 80% |
*Medicare eligibility begins on the first day of the month in which an employee turns age 65.