University of Iowa eyes early retirement incentive

IOWA CITY - With Iowa's public universities looking to become more efficient by streamlining operations and, in some cases, eliminating positions, the University of Iowa wants to offer its employees an incentive to retire early.

The university's proposed 2015 Early Retirement Incentive Program, expected to be considered by the Board of Regents in February, could help administrators avoid laying off employees in efforts to become more efficient.

All three of Iowa's regent institutions - including Iowa State University and University of Northern Iowa - are moving forward with suggestions that emerged from a systemwide efficiency review launched earlier this year. Those suggestions - like going to a shared services model in the areas of finance, human resources, and information technology - are expected to save tens of millions of dollars and eliminate more than 250 jobs across the campuses.

UI President Sally Mason last month told reporters the university was considering offering early retirement in conjunction with the efficiency review, and the Board of Regents Office on Tuesday made public the university's proposal.

The UI early retirement program initially was added to the agenda for Wednesday's board meeting, but board spokeswoman Sheila Koppin said regents instead will consider the request in February. Koppin said Iowa State and UNI so far have not proposed early retirement incentives for 2015.

ISU spokeswoman Annette Hacker told The Gazette, 'Iowa State is looking at a comprehensive review of HR, and no one at this time has suggested an early retirement program or other specific actions.”

According to the UI proposal, employees must be 57 years old with at least 10 years of continuous benefit-eligible employment at the university to apply. UI Health Care employees and those on phased retirement plans will not be eligible.

Proposed benefits include payment of accrued vacation, payment of accrued sick leave not to exceed $2,000, payment of the standard share of health and dental coverage for five years, and payment of the employer's and employee's retirement contributions for three years, followed by two years of just the employer's contribution.

The opportunity is designed as a 'voluntary window incentive program,” meaning employees must apply during a specific time frame and be approved by administrators. The application period specified in the version of the proposal made public Tuesday was between Jan. 6 and Feb. 20, but Koppin said the final proposal 'may not be identical to the version distributed today.”

Employees accepted for the program, according to the version made public Tuesday, would have to fully retire no later than June 30 - the end of the budget year.

According to the proposal, the incentive program 'does not create a right for the employee,” and the request to participate may be approved 'only if it is deemed to be in the best interest of the University of Iowa.”

'Each application will be reviewed on an individual basis for its cost saving potential,” according to the proposal.

UI employees were offered early retirement incentive packages in 2009 and 2010 as part of budget cuts. Mason has said the 2009 program has served as a sort of template for subsequent incentives.

About 600 UI employees applied for the early retirement package in 2009, exceeding savings expectations, according to Board of Regents documents. For that incentive, which also required employees be 57, about 60 percent of the applicants worked for UI Health Care, including the UI Hospitals and Clinics and Carver College of Medicine.