Printed on: 12/10/2018. Please go to http://policy.umn.edu for the most current version of the Policy or related document.
ADMINISTRATIVE POLICY

Phased Retirement Program: Twin Cities, Crookston, Morris, Rochester

Responsible University Officer(s):

  • Vice President, Office of Human Resources

Policy Owner(s):

  • Director of Total Compensation
  • See Contacts Section

Date Revised:

Nov 20, 2014

Effective Date:

Jan 1, 2003

POLICY STATEMENT

The University's Phased Retirement Program is a voluntary internal retirement program provided to tenured faculty members and academic professionals with continuous appointment who:

  • have an appointment of at least 75 percent on a nine-month or greater basis; and
  • will be at least 55 years of age on their Last Day of Regular Employment.

The Phased Retirement Program is designed to facilitate change within units by providing compensation in return for tenure or continuous appointment resignation. Faculty and academic professionals who participate in this program must reduce their work effort over a period of between one to five years. Based on an annual 100 percent appointment, the leave without salary during the phased retirement must be for at least 25 percent and not more than 75 percent time. Faculty and academic professionals may request a phased retirement and receive approval from the unit administrator, dean or other appropriate senior leader and the Office of Human Resources.

Termination of Employment

The individual must terminate employment and surrender tenure or rights to continuous appointment no earlier than one year and no later than five years after the Last Day of Regular Appointment. The Last Day of Employment must be specified in writing and must be mutually agreed upon by the faculty member or continuous academic professional, the unit administrator, dean or other appropriate senior leader and the Director, Employee Benefits (Office of Human Resources). The individual may not negotiate future University employment prior to termination and may not rehire at the University for a minimum of 6 months following the Last Day of Employment. Any employment following the Last Day of Employment is limited to 19.5 hours per week (non-benefits-eligible). Individuals may also contract as an independent contractor, if eligible.

Benefits

  1. Benefits Offered through the Phased Retirement Program:

    1. Medical and Dental Benefits

      The University's contributions to the University-sponsored medical and dental insurance plans continue during the phased retirement period, provided that these plans continue to be offered to regular benefits-eligible employees of the University. The University's contribution will be based on the employee's work location and permanent residence. In addition, for those who have coverage at the end of the phased retirement period, the University will deposit a lump sum amount to the State of Minnesota's Health Care Savings Plan (HCSP). This lump sum will be calculated as of January 1 of each calendar year and will be based upon the subsidy of two adults for 24 months in the Twin Cities base medical and dental plans. If an employee fulfills the terms of the program, retires and signs the release, but dies prior to the deposit to the HCSP, a taxable cash payment equal (in gross) to the amount of the HCSP lump sum will be made to the employee's spouse, or if none, to the employee's estate. If the employee has waived participation in the HSCP under the terms of the plan, no lump sum will be paid and no further benefits will be due post-employment.

    2. Faculty Retirement Plan Contributions

      Under the program, the University's contributions to the Faculty Retirement Plan continue during phased retirement, regardless of the percentage of leave without salary in effect at any time during the phased retirement. Contributions to the individual's Faculty Retirement Plan account will be based on the individual's unreduced salary, subject to contribution limits imposed by law. Faculty Retirement Plan contributions will cease as of the last day of employment.

    3. Other Retirement Plan Benefits

      All contributions to University-sponsored retirement plans will cease as of the last day of employment. After the last day of employment, the individual will have such access to retirement plan accounts as provided by the various plan documents and investment contracts.

    4. Life Insurance

      The University's contribution to life insurance coverage continues under this program, regardless of the percentage of leave without salary in effect at any time during the phased retirement. Life insurance coverage will continue during the phased retirement period, based on unreduced salary, subject to the terms of the group insurance policy.

    5. Academic Disability Program

      The University's contributions to the Academic Disability Program continue under the program, regardless of the percentage of leave without salary in effect at any time during the phased retirement. In the event of certification of disability, payments may not exceed the level of the phased retirement actual salary. Coordination of benefits between the Academic Disability Program and the Phased Retirement Program is detailed under BENEFITS Section C.4. Integration of Academic Disability Program Benefits and Phased Retirement, below. Contributions to the Academic Disability Program end on the Last Day of Employment.

    6. Vacation

      Vacation will accrue for individuals on a 12-month appointment of 67 percent or greater. Individuals are encouraged to use vacation prior to reducing their appointment below 67 percent. Payment for unused vacation days accrued with the 12 months immediately preceding the Last Day of Employment will be made shortly after that date, provided that proper documentation is provided. Accumulated vacation is lost if not used within 12 months of the date on which it was accrued.

  2. Benefit Cessation

    All benefits not continued at the individual's expense under the UPlan Retiree Group or under the Consolidated Omnibus Budget Reconciliation Act (COBRA), will cease on the individual's Last Day of Employment.

  3. Relation to Other Benefits Programs

    1. Retiree Medical and Dental Coverage

      If eligible, participants in the program may continue medical and/or dental coverage in force at the time of retirement as retirees, subject to the terms of the program in which they participate (either UPlan or federal). Employees may choose another medical or dental plan in the 60 days immediately preceding the effective date of retirement. Additional information on UPlan retiree coverage may be found at Benefits for Retirees section of the Office of Human Resources website.

    2. COBRA

      The continuance benefits coverage under COBRA runs for 18 months following the last day of employment under the Phased Retirement Program. In addition to medical and dental coverage, COBRA coverage is available following the last day of employment for life insurance benefits.

    3. Other Programs

      The Phased Retirement Program is not available to any individual who participates in another University exit program, voluntary or involuntary, to which the University contributes or has contributed monies (including the Academic Disability Program and the Terminal Agreement Program).

    4. Integration of Academic Disability Program Benefits and Phased Retirement Benefits

      If a faculty member or continuous academic professional becomes totally disabled on or before their last day of regular appointment prior to the beginning of their phased retirement, the phased retirement agreement is void. In this situation, only disability benefits apply, under the terms and conditions of the faculty member's regular appointment.

      If a faculty member or continuous academic professional becomes totally disabled at any time during the term of the phased agreement, the agreement will end on the original ending date. After the Last Day of Employment, the faculty member or continuous academic professional will have no further employment claims on the University and will surrender all tenure rights.

      If the faculty member or continuous academic professional continues to be totally disabled past the end date of the phased retirement agreement, the continuing disability benefit will be based upon their last actual salary amount until the end of the normal disability benefit period.

      During the term of the phased agreement, the faculty member or continuous academic professional will receive Faculty Retirement Plan contributions based on their full, unreduced base salary. For the period of time during which such faculty member is totally disabled, the retirement plan waiver in the disability plan will fund those contributions.

      A faculty member's or continuous academic professional's health insurance subsidy will follow the provisions of the phased agreement, regardless of disability status. Health insurance subsidy is limited to the term of the phased retirement agreement. The HCSP deposit will be made upon termination of employment and surrender of tenure rights.

Exclusions

This policy does not pertain to those individuals on the Duluth Campus represented by Unit 9 UEA (University Education Association.)

REASON FOR POLICY

This policy implements Board of Regents Policy: Faculty and Staff Retirement. The Phased Retirement Program is offered by the University to eligible tenured faculty and to continuous academic professionals in an effort to support the facilitation of change within the collegiate and administrative units.

PROCEDURES

FORMS/INSTRUCTIONS

APPENDICES

FREQUENTLY ASKED QUESTIONS

CONTACTS

SubjectContactPhoneEmail
Employee Benefits Benefits Service Center
  • 612-624-8647
  • 800-756-2363
612-626-0808 (fax)
General Information or Procedural Assistance
  • Primary: Responsible administrator/supervisor
  • Secondary: Local campus, college, or administrative unit HR administrator
  • Other (as needed): Office of Human Resources specialist or consultant
Office of Human Resources Specialist and Consultant List Office of Human Resources Specialist and Consultant List
Document Processing Office of Human Resources Call Center 612-624-UOHR (8647) ohr@umn.edu

DEFINITIONS

Last Day of Employment
The last day of work as a tenured faculty member or continuous appointment academic professional and the last day of the Phased Retirement period.
Last Day of Regular Appointment
The last day in unreduced appointment prior to the beginning of the phased retirement.
Senior Leader
Individuals specified as senior leaders in Board of Regents Policy: Reservation and Delegation of Authority. This includes the executive vice president and senior vice president, chancellors, vice presidents, general counsel, University librarian, the director of audits, deans (on all campuses), athletic director (Twin Cities), and others as directed by the Board to include the Executive Director and Corporate Secretary, Board of Regents, and the Chief of Staff (Office of the President).
Unit Administrator
The administrator who is charged with leadership and oversight of the campus, college, or administrative unit.

RESPONSIBILITIES

Tenured faculty member or continuous appointment academic professional
  • Review all program documentation, forms, policy, and procedure.
  • Consult legal counsel as appropriate.
  • Schedule the leave without pay percentages and the last day of employment with the unit administrator, dean or other appropriate senior leader and the Director, Employee Benefits (Office of Human Resources).
  • Execute the Phased Retirement Agreement and the Initial Release.
  • At the end of the Phased Retirement, execute the Subsequent Release and forward it to Employee Benefits. Complete retiree enrollment or COBRA election forms to continue benefits post-retirement and return them to Employee Benefits.
Responsible administrators/supervisors
  • Review all program documentation, forms, policy, and procedure.
  • Schedule the leave without pay percentages and the last day of employment with the tenured faculty member or continuous academic professional, dean or other appropriate senior leader and the Director, Employee Benefits (Office of Human Resources).
  • Follow procedures as outlined under Administrative Procedure: Implementing the Phased Retirement Program.
Director, Employee Benefits (Office of Human Resources)
  • Advise administrators/supervisors on documentation, form, policy, or procedure interpretation.
  • Schedule last day of employment with the tenured faculty member or continuous academic professional, and the unit administrator, dean, or other appropriate senior leader.
  • Approve and sign all Phased Retirement Agreements.
  • Ensure all payment of all benefits under the Phased Retirement Program, according to policy.
  • Any arrangement must be in writing and signed by the faculty member or continuous academic professional, the unit administrator, dean or other appropriate senior leader and the Director, Employee Benefits (Office of Human Resources).

RELATED INFORMATION

HISTORY

Amended:
November 2014 - Comprehensive Review, Minor Revision. Amended to provide for a lump-sum deposit to the HCSP post-retirement, a minimum of age 55 for eligibility and a prohibition on rehire for 6 months following the last day or employment.
Amended:
December 2012 - Incorporated senior leader terminology. The Office of Human Resources required signature redirected to Director, Retirement Program.
Amended:
May 2008 - Policy converted to the new University-wide format for administrative policies.
Adopted:
March 1982
Effective:
January 2003
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