early retirement

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Not a question as much as an idea looking for replies.

At this time, the early retirement plan of a $30,000 cap with the option of lump sum or use as insurance premiums seems to be working to meet most people's concerns.

one element of this proposal that is most interesting is that it DOESN'T require the full 2% pool in the near future. The average salary of an instructor who's been here 20 or more years is 46K. If they retire and take the 30K, their replacement will be hired in for around 27K. That leaves a 19K "gap." Eventually this gap comes back into the salary pool, but not immediately. In the past, this "gap" has simply been absorbed into the general fund. If we can get the administration to commit this "gap" into the early retirement fund to help make it more self-funded, then the early retirement fund only needs to cover 11K, rather than the 50K that it would have had to cover under the old system. As you can see, our early retirement fund would be able to cover MANY more faculty this way. In fact, the savings from many of our long-term faculty would almost be able to fund their own early retirement, without any extra money coming from the pool. What do you think?

-- Anonymous, April 19, 2000


The 30K is not set in stone. I was told that family health should be computed at 6K per year, so the 5 years of coverage that Hastings proposed makes it 30K. We could just as easily make it half salary (but then the coverage won't last as long). The numbers really aren't what's important. Changing the way we fund the retirement pool is what's important. And that's what I though I heard Hastings requesting when we first began meeting.

-- Anonymous, April 24, 2000

I am not initially convinced that the $30k cap would really make that much difference. Honoring the request of 3 people per year rather than 2 wouldn't really make a big difference to number 4 and beyond. The college has essentially been contributing a fair amount of their saving already, in that they have honored more requests than we had money for. If they "agree" to do this, it will become part of the package. Then we as faculty lose the advantage of the early retirements lowering the average daily rate. It seems to me that in order to justify any plan, we need to show that every person (or at least a large majority) who contributes to this plan can get some return on it if s/he is willing to stay long enough.

-- Anonymous, April 20, 2000

The cap and alternate financing does not increase the possibilities to 3 from 2, it makes it possible for us to finance a dozen people each year! If every single person with 25 or more years wanted to retire next year, under this proposed plan we would only be a little over $100K short, if I remember my calculations correctly. That's 19 faculty members! True, 100K is a lot to be short, but that's funding 19 new people, not 1 or 2! I don't think you are understanding the amount of the additional funds that would come into the system this way. We are not limited to just the 2% this way. In fact, I would hope that after the first rush of retiree's, we'd be able to drastically scale back or eliminate the 2% and get it BACK into the salary pool.

-- Anonymous, April 24, 2000

Here are some ideas regarding the early retirement language:

In the "current language" as quoted on our last proposal, change 60% to 20% and 110% to 50%. A person would then reach the maximum at 21 years.

Since the total is much less than previously, do we want to eliminate or reduce the 3 payment option?

Health insurance options: (1) The retiree could choose to take part or all of the benefit in the form of a health insurance benefit for up to five years. (2) The heath insurance option would be 2 years plus 4 months for each additional year of employment, up to a maximum of 5 years.

The second idea for the health option is probably cleaner and easier to administer.

-- Anonymous, May 19, 2000

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