Printed on: 01/14/2026. Please go to policy.umn.edu for the most current version of the document.
University of Minnesota  Administrative Policy

Terminal Agreement Program

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Policy Statement

The Terminal Agreement Program (the Program) is designed to facilitate change within the collegiate and administrative units by providing an incentive to eligible tenured faculty and to academic professionals on continuous appointments in return for tenure or continuous appointment resignation.

Eligibility

The Program may be provided to Tenured faculty, Probationary (tenure-track) faculty, and academic professionals with continuous appointments who are not participating in another University exit program, voluntary or involuntary, to which the University contributes money including the Phased Retirement Program and the Academic Disability Program. Eligibility conditions include:

  • Have a faculty or academic professional appointment of at least 75% on a 9-month or greater basis; and
  • Will be at least age 55 and have at least 10 consecutive Years of Service, or at least 60 and have at least 5 consecutive Years of Service, ending on their End Date.

A Year of Service is defined as a 12-month period during which the individual held a continuous academic appointment of at least 75 percent on at least a 9-month basis at the University of Minnesota. Approved unpaid leaves of absence will count toward a year of service, if the individual's appointment was at least 75 percent during the leave.

This policy does not apply to term (e.g., contract) faculty or adjunct faculty.

Conditions

For each individual Terminal Agreement offered, campuses/colleges must demonstrate in a written summary that the use of the program is in the best interest of the University and is in keeping with specific programmatic goals or other special circumstances. Summaries for Twin Cities colleges must be approved by the Executive Vice President and Provost and summaries for all other campus locations must be approved by the Chancellor of that campus.

The legally binding documents used in connection with the program shall include a Terminal Agreement and a Release.

Participants must complete and sign the Terminal Agreement, and the Agreement must be approved and accepted by the University as a condition of entering the program. Participants must also sign the Release at the end of their Terminal Agreement period in order to receive benefits after their End Date.

The Agreement may be changed only by mutual consent of all parties. Any amendment to the original Agreement must comply with the program, must be in writing and must be signed by the parties. 

Benefits Payable Under the Program

Benefits payable under the Program include:

  • Severance Payment – The severance payment will be set between 50% and 200% of Current Annual Base Salary and at the discretion of the Chancellor at Morris, Rochester, Duluth or Crookston, or the Dean of any Twin Cities college, not to exceed $500,000. The Chancellor of a campus location, or a Dean of a Twin Cities college, can elect to provide payments as (1) a single lump sum issued shortly following the End Date or (2) 50% issued shortly after the End Date and the remaining 50% issued the following January. The method of payment should be based on business need, determined prior to any incentive offers being extended, and be the same for all participants within each campus or college. The payment(s) is not eligible for any retirement plan contributions.
  • Health Care Savings Plan – The University will deposit a lump sum amount to the State of Minnesota's Health Care Savings Plan (HCSP) for those who carry coverage on the End Date. This lump sum will be equal to the subsidy of two adults for 24 months in the Twin Cities base medical and dental plans, as calculated on January 1 of that same calendar year of the End Date.
  • Vacation – Payment for unused vacation days will be made in accordance with the Administrative Policy: Vacation Leave for Faculty and Academic Professional and Administrative Employees.
  • Retiree Medical and Dental Coverage – If eligible, participants who are enrolled in medical and/or dental plans during their employment may have the option to continue coverage under the University's retiree medical and dental programs, subject to the regular terms of the programs. Additional information on benefits after leaving the University may be found at the Leaving the University Section of the Human Resources website.
  • COBRA and Continuation of Coverage – Employees participating in this program may be eligible for continuance of medical, dental and life insurance for 18 months after their University coverage ends. 
  • Emeriti Status – Participation in this program will not affect an individual’s eligibility for emeriti status.
  • Retirement Plan Benefits – All payments under this program are severance payments and are therefore not eligible for retirement plan contributions. 

When Benefit Coverage Ends

Medical, dental, and life insurance coverage ends on the last day of the month that includes the End Date. Disability coverage ends the day after the End Date in a benefits-eligible position. Employees will have the option of continuing certain benefits at the individual's expense under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Signed Release Requirement

The employee must sign and return the Release used in connection with the program on their End Date, or by the last day of any consideration period addressed in the Release, whichever is later. All Releases will be sent to the OHR Benefits Administration team at [email protected]. If the employee fails or refuses to sign and return the Release in a timely manner, the End Date will not be affected, i.e., the employee’s employment will still end, and tenure will be surrendered effective as of the End Date. However, the employee will forfeit the benefits under the Agreement.

Limits to Future Employment

The purpose of the Program is to encourage full departure from the University. If the employee accepts another position of employment at the University and begins working in that position prior to the End Date set forth in the Agreement, the Agreement is void and the employee will receive no program benefits. The employee is not allowed to make plans for future University employment prior to termination and may not be rehired at the University for the period of time that is commensurate with the severance payment offered (e.g., If the severance payment is the equivalent of 12 months of pay, then the time period over which they could not be rehired would be 12 months following the End Date).

After that time, the employee can return to work in a non-benefits-eligible appointment, or as an independent contractor, if eligible, pending approval by the academic unit in which the work is carried out. A non-benefits eligible appointment is defined as a temporary, non-tenured appointment with scheduled hours of 19.5 hours per week or less. 

No other re-employment is permitted.

Reason for Policy

This policy implements Board of Regents Policy: Faculty and Staff Retirement.

Contacts

Subject Contact Phone Email
Employee Benefits – For questions on how the program works or to discuss personal situations Employee Benefits Service Center 612-624-UOHR (8647) or 
800-756-2363, option 2 		[email protected]
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
612-624-UOHR (8647); 800-756-2363 [email protected]
Document Processing Office of Human Resources Call Center 612-624-UOHR (8647) [email protected]
Responsible Individuals
Responsible Officer Policy Owner Primary Contact
  • Vice President, Office of Human Resources
  • Senior Director - Total Rewards
  • See Contacts Table above

Definitions

Current Annual Base Salary
The annual base compensation rate associated with the individual's tenured or continuous appointment position that is in effect on the End Date. For the purposes of calculation of the salary payment, annual base salary must reflect the individual's term of appointment (i.e. 9-month, 10-month or 12-month). Current Annual Base Salary does not include augmentations, summer appointments, or any compensation not eligible for Faculty Retirement Plan contributions. For individuals with appointments of less than 100 percent, the salary payment will be based on the corresponding proportion of the 100 percent appointment base salary. For physician faculty, Current Annual Base Salary is the base salary, exclusive of administrative augmentation and any compensation paid by the University of Minnesota Physicians, specified in the University of Minnesota's annual notice of appointment. 
End Date
The last day of work as a tenured faculty member or continuous appointment academic professional.

Responsibilities

Tenured faculty member or continuous appointment academic professional:
  • Review all program documentation, forms, policy, and procedure.
  • Consult with your personal legal counsel as appropriate.
  • Set up a meeting with OHR benefits consultants, if desired.
  • Schedule the last day of regular employment (End Date) with the unit administrator, dean or other appropriate senior leader.
  • Execute the Terminal Agreement and Release. 
  • 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.
  • Work with the employee to schedule the last day of regular employment (End Date).
  • Follow the procedure as outlined under "Implementing the Terminal Agreement" document.
Office of Human Resources
  • Retirement services will advise administrators/supervisors on documentation, forms, policy, or procedure interpretation.
  • Senior Director of Total Rewards will approve and sign all Terminal Agreements.
  • Benefits administration ensures payment of all benefits under the Terminal Agreement Program, according to policy.
Unit Human Resources
  • Consult with the unit administrator, dean or other appropriate senior leader.
  • Ensure applicable documents are provided to all stakeholders.
  • Direct employees to appropriate resources for questions or clarifications.

Related Information

There is no Related Information associated with this policy.

History

Effective:
January 2026. The Terminal Agreement Program (the Program) is designed to facilitate change within the collegiate and administrative units by providing an incentive to eligible tenured faculty and to academic professionals on continuous appointments in return for tenure or continuous appointment resignation.