Missing from the rows of budget items under scrutiny Friday at the Board of Regents meeting: the Medical School’s bid for an early retirement package.
Deadlines for including the proposal in the upcoming fiscal year’s budget expired after it received tepid support from Yudof’s office and top administrators in the Academic Health Center.
The package would have offered bonuses for faculty members to retire. While it would have forced a large initial payout, the school would have benefitted in the long run by freeing up money formerly tied to those would-be retirees’ annual salaries and benefits.
Under a 1993 federal law, professors are not subject to mandatory retirement.
Administrators, unconvinced that officials could justify the cost of such a program, suggested beefing up medical and dental coverage in one of the two existing retirement plans as an alternative.
“It’s off the table,” said Frank Cerra, senior vice president for the Academic Health Center, of the early retirement plan.
The two current proposals extend attractive alternatives for faculty members, Cerra said. Medical School officials did not convey a convincing financial argument for implementing the drastically different early retirement package, he added.
The failed offer, one of several initiatives endorsed by Alfred Michael, dean of the Medical School, was intended to alleviate a two-year funding shortfall in the school’s $280 million annual budget.
“We have bricks and mortar, but not a lot of cash,” said Pete Mitsch, chief financial officer for the Medical School.
An estimated 30 faculty members were prepared to accept the one-time-only offer this July.
Tenured faculty members would have qualified by meeting or exceeding the program’s “Rule of 80” — the sum of their age and total number of years employed by the University.
Although the school never submitted a formal bid to Yudof, 18 months of sporadic planning stand behind the proposed incentive-laden offer for tenured senior Medical School faculty members.
Intended as an innovative solution for balancing the school’s brittle budgets, enough questions lingered to keep the idea trapped in the planning stages, said Katherine Johnston, chief financial officer for the Academic Health Center.
Squeezed by slumping clinical revenue and declining federal support for medical education, Medical School administrators continue casting for new ways to balance the school’s budgets while sponsoring competitive programs, said Mitsch.
While acknowledging Cerra’s concerns, Mitsch insists the idea remains on the dean’s to-do list. Mitsch said he expects a formal proposal to be submitted by August.
“It’s far from dead, but it’s not real close to being a reality at this point,” Mitsch said.