The University is offering select full-time faculty and staff a chance to fend off future layoffs and furloughs with a voluntarily employee separation program.
At yesterday’s meeting, the University Board of Trustees unanimously approved the Employee Separation Plan, which allows faculty and staff with 15 or more years of service to voluntarily leave the University in exchange for a portion of their individual base compensation to be paid out over a period of time.
The plan will save the University an estimated $5.6 million during an eight-year payout period.
Chief Financial Officer Sherideen Stoll said the measure is both cost effective and beneficial to participants because they can choose to leave the University on their own terms.
‘We know that we are going to be facing some significant [financial] challenges going into 2011,’ she said. ‘When you have to make reductions we have to make, individual separations are very difficult.’
Of the eligible 834 full-time faculty and staff, 138, or 17 percent, are expected to participate in the program, according to Educators Preferred Corporation, the Southfield, Mich., company chosen to coordinate the 45-day opportunity. EPC also created similar plans for Kent State University and Wright State University, both of which had almost as many participants as was originally estimated.
Employees who choose to participate in the plan and retire will receive 60 equal monthly payments of base salary pay over five years contributed to a 403(b) account. Nonretiree participants will receive 96 equal monthly payments over eight years direct deposited to a bank account. Once participants agree to leave the University, they cannot be rehired for 10 years except on a part-time adjunct faculty single course term basis. Some positions left vacant will be refilled, but Stoll said with the restructuring of staffing, some positions may be eliminated.
Stoll stressed the plan was not a buyout, but an employee separation or severance program. A buyout means purchasing service credit, she said, and this plan does not buy additional employee years.
With the plan’s approval, EPC sent e-mails to eligible University employees today, who have until Feb. 1 to make their decision. EPC representatives will be on campus as soon as Dec. 15 to provide information sessions and employee counseling.
Ron Shields, faculty chair to the board and chair of the Theatre and Film Department, said the key features of the plan are that it’s voluntary and will only be relevant to faculty and staff who choose to participate. Shields, who’s been at the University 23 years, said he was glad the University shared some plan details and listened to faculty and staff responses before unveiling it.
‘For the vast majority of faculty, I doubt it will matter much. But it gives faculty and staff a choice,’ Shields said. ‘I’ve been here more than 15 years and I’m going to take a look at it even though I’m not ready to retire.’
The plan allows a great amount of personal choice, said Sara Zulch-Smith, administrative staff chair to the board. She said with the plan, faculty and staff can have ‘control of their own destiny.’
‘I find this to be very respectful to the individuals participating,’ said Ken Borland, senior vice president for Academic Affairs and provost. ‘It shows a great deal of character for the University.’
Stoll said while the plan will cut costs, it does not guarantee other restructuring measures will not be taken since the University is expecting an $8.3 million decrease in state funding for next fiscal year.
