Inside Iowa State

April 3, 2009

Retirement incentive option details online

by Diana Pounds

Details about Iowa State's new retirement incentive option program and an application form now are available on the human resource services web site.

The retirement incentive option is intended to help the university meet budget reductions. It's open to employees who will be at least 60 years old by Jan. 31, 2010, and have completed 10 years of service. A separate retirement incentive option is open to Extension employees on federal retirement programs. Extension employees must be 50 years old by Jan. 31, 2010, and have 20 years of service to be eligible.

The incentive for those who retire under the programs is five years of post-retirement, university-paid health and dental benefits. Employees must apply for the retirement incentive program by June 30, 2009, and be fully retired by Jan. 31, 2010.

Not everyone who qualifies may be approved for the retirement incentive option. Supervisors will look for potential savings when making decisions on requests, said Mike Otis, associate director of human resource services. For example, it may not make financial sense for a department to grant a retirement request if the retiring employee's position would have to be refilled.

Incentive details

ISU will cover both employee and employer costs of the employee's current insurance for five years. If the retiree becomes eligible for Medicare (turns 65) during that time, the university will continue to pay the incentive at retiree rates for the remainder of the period.

For retirees on the ISU HMO and PPO programs, the university will pay benefits for the employee-only or the employee and spouse/domestic partner plans. For those on the State of Iowa health programs, the university will pay benefits for the employee-only or family plans.

For example, the university currently would pay $1,033 monthly for health coverage for a retiree (under age 65) on the ISU PPO plan for employee and spouse/domestic partner. The current university payment for a retiree (under age 65) on the Blue Advantage plan for family would amount to $848 per month. Rates and plan benefits are subject to change in future years, as they are for active employees.

Approval process

To enroll in the program, employees will need the approval of their immediate supervisor(s) and the appropriate department chair/director. Each request also must be approved by a dean/vice president. The office of the executive vice president and provost will review all applications. Extension employees' applications will be reviewed by the vice president for extension and outreach, and the executive vice president and provost.

Otis advises those considering the early retirement program to talk to their supervisors before submitting paperwork. "The retirement option won't be a fit for every person," he said. He also suggests that eligible employees pondering retirement consider visiting with financial counselors or planners.

Eligibility requirements

• At least 60 years old on Jan. 31, 2010 (50 years for Extension employees on federal retirement programs)
• 10 years of service (20 for Extension employees on federal retirement programs)
• One-third time appointment or more for faculty, P&S, supervisory merit staff
• One-half time appointment or more for non-supervisory merit staff
• Retire no later than Jan. 31, 2010

Useful sources

• Plan details: Web site
• Program participation: Department chairs, directors
• Health, dental benefits: Benefits office, 4-4800
• TIAA-CREF retirement planning: Ames office, (800) 732-8353
• IPERS info: Iowa Public Employees Retirement System, (800) 622-3849