The University of Western Ontario is offering voluntary retirement incentives for staff and faculty as a means of minimizing the need for layoffs to meet budget constraints.
The one-time voluntary retirement incentive was announced this week for regular, full-time Professional Managerial Association (PMA) eligible employees, continuing and sessional employees of The University of Western Ontario Staff Association (UWOSA) and regular, full-time employees of Select Administrative Group Employees (SAGE).
The program also includes an incentive to speed up retirement for faculty members.
The global stock market drop has sent investments plummeting, leaving universities such as Western with many budget challenges. The decline in endowed and non-endowed funds, from which the university draws for operating expenses, has forced the university to explore various options to reduce spending.
The university is forecasting that operating revenues between 2008-9 and 2010-11 will be about $41 million lower than previously expected. The budget cuts are necessary to meet this shortfall.
While the market slide precipitated the current situation, it was not the only reason for spending restraint. Western’s four-year budget planning exercise called for accelerated spending early in the cycle for expansion of graduate education, and greater financial restraint in the final portion. With the market downturn and going into the final portion of the cycle, Western is now experiencing unanticipated shortages in revenue.
The retirement incentive is only available for positions whose salary is funded by the operating or ancillary budgets.
To qualify for the incentive option, as of July 1 staff members belonging to these groups must:
be eligible to retire under terms of the pension plan for administrative staff
the sum of the employee’s age and years of regular full-time service is at least 75
he or she must receive a salary paid from the university.
“The retirement incentive option is one of our strategies we are using to minimize the number of people affected by position elimination/ layoff and to maximize the re-employment opportunities within Western for people whose jobs are directly affected by the changing budget picture,” says Jane O’Brien, Associate Vice-President (Human Resources).
The university is also exploring flexible employment arrangements to meet the needs of both the employee and the faculties and departments.
The retirement incentive may allow for changes in the staff and faculty complement in faculty and support unit budgets, says O’Brien. “Over 75 per cent of faculty/department budgets are allocated for salary and benefit costs. If we need to reduce our expenditures, the salary and benefit costs will need to be reduced.”
Those whose retirement application is approved will be given an allowance, which varies based on the retirement date. Interested staff members must submit an application by March 16.
Similarly, a modified phased retirement option is available for faculty members allowing them to reduce their workload over one or two years prior to full retirement.
The University of Western Ontario Faculty Association 2006-2010 collective agreement presently includes a three-year phased retirement option for faculty approaching retirement.
“We recognize people aren’t necessarily ready to retire full-stop and would like to ease into retirement,” says Michele Parkin, Director of Faculty Relations.
“We found the three-year plan might be too restrictive for some people,” she adds. “Because the university is interested in reducing its workforce at this time, we thought it would be appropriate to offer additional options.”
To be eligible, faculty members must be within 10 years of their normal retirement date and have at least 10 years of service at Western. Interested faculty must notify the appropriate dean by March 31.
The phased retirement also includes a salary adjustment; however those opting for the plan will receive a financial incentive payment. In most cases, faculty benefits will also continue throughout the phased period.
The reduced workload would require faculty departments to “backfill” the teaching responsibilities of the faculty member, adds Parkin.
Overall, a reduction in salary payments “would ease operational budgets of the departments,” she says.
Two certified employee benefit specialists are available to meet with faculty to discuss retirement options. Personal consulting appointments can be made by calling 519-661-2194 or by e-mail at hr-communication@uwo.ca.
General information sessions to review and clarify the staff incentive option will be offered on Feb. 13 and 17 for eligible staff. Faculty and staff also can attend retirement planning sessions during the weeks of Feb. 16 and 23.
For more information about the retirement incentive options or to view a detailed agenda for these sessions, visit www.uwo.ca/humanresources/volretire.htm.