U retirement package would affect 4,100

University employees must choose whether to participate in the program by June 2004.

Paul Sand

Pat Swanson, a former senior editor at the St. Anthony Falls Laboratory, retired Feb. 7 after 32 years of work at the University – two months before the University announced its new early retirement plan that covers part of a retiree’s health insurance costs for three years.

Swanson said despite being single and opting for the cheapest insurance plan, her monthly health insurance bill is $340. She said she might be forced to move from her home because her monthly $1,750 pension income is not enough to cover her insurance payments and other bills.

“The bottom line is if they are going to pay for a few employees to retire, the rest of the employees, including me, are stuck with paying this large amount of money,” she said.

Swanson said she hopes the University will give her the benefits.

The plan was approved Friday by the University Board of Regents as a cost-saving measure. Under the plan, the University will continue paying the employer portion of the employee’s health care plan for three years.

After three years, employees can pay to continue health care coverage under the University’s insurance plan, said Jackie Singer, Office of Human Resources and Employee Benefits retirement director.

The package is expected to affect more than 4,100 faculty and staff who are eligible for the incentive option.

Employees must choose whether to participate in the early retirement program by June 2004.

University human resources benefits counselors advised Swanson the University was not going to offer a retirement incentive option when she asked about retiring, she said.

Carol Carrier, vice president of human resources for the University, said the incentive option was not discussed with employee groups until March.

The voluntary retirement incentive program is estimated to save the University between $14.1 million and $31.3 million annually, depending on how many employees choose the option.

Regents Chairwoman Maureen Reed said the University gave the incentive to employees who are eligible to retire or want to retire early as a way of avoiding staff layoffs.

The University is facing a possible $185 million state funding cut in 2004-05.

Reed said the plan is not unusual, and most companies would take this approach if they knew their budgets might be cut, she said.

“I think this is a very appropriate approach given the financial constraints that we know we’re going to be under,” she said.

University faculty and staff representatives said they have mixed reactions to the plan.

Nan Kalke, chairwoman of the Council of Academic Professionals and Administrators Benefits and Compensation Committee, said the organization supports the retirement option even though many of the University’s professionals and administrators are not near retirement.

“I think it’s a pretty good strategy for the University, and a positive one, which is nice,” Kalke said.

John Fossum, University Faculty Senate Faculty Affairs Committee chairman, said because of an existing retirement policy, many faculty members will not be interested in the new option.

Fossum said faculty members typically scale back their academic work during their final years. He said the new option calls for employees to finish their work and retire within a year.

“I don’t think there will much interest from faculty,” he said.

Joe Jameson, Civil Service Committee vice chairman, said while the committee did not have specifics on the option at its last meeting, the reaction was positive. He said many civil service employees said they will use the plan.

“Those who are eligible are happy,” Jameson said.

Paul Sand covers University Board of Regents and administration. He welcomes comments at [email protected]