University to offer retirement incentives
The University announced a voluntary incentivized retirement program last week at a time when employees nationwide are delaying their retirements in light of the economic recession.
In an e-mail sent to University employees on June 11, Vice President for Human Resources Lianne Sullivan-Crowley said, “The University established this limited program out of the recognition that some employees who may have been planning to retire this year may have decided to remain in their jobs due to the economic downturn.”
The e-mail also stated that the University hopes to reduce “staffing levels necessary over the coming year through the Voluntary Incentivized Retirement Program [VIPR], Vacancy Management Review, and voluntary reductions in employees’ work schedules.” University spokeswoman Cass Cliatt ’96 said that "it would be premature to discuss any layoff program” before observing the effects of the VIPR and vacancy management.
The announcement came shortly after a June 11 meeting of the Academic and Administrative Managers Group to discuss proposals offered by University members on its cost savings information website.
The incentivized retirement program — similar to those announced by Harvard, Dartmouth and Cornell in the past few months — comes at a time when the University looks to cut next year’s budget by $88 million. Unlike many of its peer institutions, Princeton has not yet instituted a hiring freeze, but each new hire must be approved by a review committee consisting of Sullivan-Crowley, Provost Christopher Eisgruber ’83, Dean of the Faculty David Dobkin and Executive Vice President Mark Burstein.
Though hundreds of employees currently qualify for the program, most faculty members are not eligible, and Cliatt said the University expects that only a “mere percentage of those eligible” will participate.
Employees who wish to take advantage of the new program must be at least 55 years old, and their age, combined with their years of credited service, must add up to at least 80.
Princeton Plasma Physics Laboratory (PPPL) employees, many faculty members, researchers and technicians do not qualify for the program, Cliatt said, adding that University officers are also ineligible because they are “critical to the [University’s] mission.” Eligible employees, including University librarians and Human Resources employees, will receive information packages on July 1, and they must decide by August 18 whether they wish to participate.
Though there have been more recent staffing cuts at the PPPL, which is under the provision of the Department of Energy, the last formal staff reduction by the University occurred in 2004 with Office of Information Technology employees, because staff levels increased in the lead-up to Y2K with the understanding that staffing levels would have to return to their previous levels, Cliatt said.
The University will unveil the details of the plan in a town-hall meeting on June 25 from 9 a.m. to 11 a.m. in McCosh 10.
Staff retirement incentive programs, or what have been called "buyouts," have been offered at peer institutions such as Cornell, Dartmouth and Harvard.
At Harvard, 531 staff members participated in a voluntary early retirement incentive program. In addition to regular retirement benefits, staff members who enrolled in the program will receive a one-time retirement lump-sum payment of one year's annual salary, payment of $750 per month until Social Security eligibility at age 62, and an age requirement waiver from Harvard for its retiree medical benefits.
At Cornell, 423 staff members were accepted into the staff retirement program. This is double the number of employees that Cornell administrators had expected would opt to enroll. Employees who opted for this program will receive an “enhanced contribution” to their retirement accounts and an additional lump-sum payment based on their base salary when they retire on June 30.
At Dartmouth, around 80 staff members opted for the college's retirement incentive program in mid-January. Yale also considered offering an early retirement program but decided against it when it felt that the costs associated with recruitment and the disruption in services would burden the University. Instead, it offered workers an early retirement plan on case-by-case basis where the employee was offered severance pay in addition to retirement benefits.
Yale has taken the most drastic measures of peer institutions in response to the recession with the layoff of 100 workers, one of the largest round of layoffs in its history. It had originally planned to lay off 300 workers to help close a $100 million budget gap.
Similarly, Brown University decided against offering incentivized retirement plans, but it has instituted a hiring freeze since November and will lay off 60 workers next month. Approximately half of the 60 positions will be eliminated.
An earlier version of this article incorrectly stated that several faculty are ineligible for the program because they receive federal funding and that OIT staffers brought on to help the University prepare for Y2K were hired on the stipulation that they would later be let go.
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