Inside Iowa State

Inside Archives

Submit news

Send news for Inside to inside@iastate.edu, or call (515) 294-7065.

About Inside

Inside Iowa State, a newspaper for faculty and staff, is published by the Office of University Relations.

July 9, 2009

Retirement group swells to 210

by Anne Krapfl

When the application window closed June 30, 210 university employees were approved to participate in the retirement incentive option (RIO). The group includes 99 P&S staff, 95 merit staff and 16 faculty. An additional nine employees who applied were not approved. The estimated gross savings in salaries and benefits in FY10 for these positions is $13.6 million.

The final figure could grow; there still are a handful of applications awaiting a final decision by the appropriate vice president.

The state Board of Regents approved Iowa State's retirement incentive option at its March meeting. The program was developed as an immediate cost-cutting strategy for the budget year that began July 1, specifically a budget that is $38.3 million lighter in state funding than the budget a year ago. A first assumption -- though not a requirement -- is that the position of the person approved for the RIO will not be filled. But another option is to fill the position with a less experienced employee at a smaller salary.

About 35 percent of the RIO applications approved are from ISU Extension employees, including 60 P&S Extension employees. The April 30 announcement of the reorganization plan for ISU Extension affected both campus and off-campus positions, including all county and area director posts. Extension field specialists and communications specialists also are among those approved to participate in the RIO.

RIOs approved (by employee group)
as of July 8

  Total Extension Other
Faculty 16 *5 11
P&S 99 60 39
Merit 95 8 87
Total 210 73 137

*at least a partial Extension appointment

RIOs approved (by ISU division)
as of July 8

Academic affairs  
    Extension *73
    Other 76
Business and finance 30
President 4
Student affairs 27
Total 210

*includes 5 faculty with at least a partial Extension appointment

What it accomplishes

In addition to dollars saved, the RIO approvals reduced the number of positions eliminated, said Brenda Behling, assistant to the executive vice president and provost who is processing the approved applications centrally.

"As we moved through the budget development period this spring and summer, units developed several working drafts of their budget plans, including personnel plans," she said. "Early on, we asked for their worst-case personnel scenarios, before we had firm numbers on the RIO or the federal stimulus funds.

"Those two factors have allowed units to remove positions from their earlier proposed lists of cuts," she said.

In light of the June 30 deadline to apply to the RIO program, Behling said employees whose positions were at risk for elimination and who were eligible for the RIO were alerted to it. Units approved applications from eligible employees in that group, she said.

What it is

According to Human Resource Services, the pool of employees eligible for RIO was 850, so nearly one in four who were eligible attempted to participate. Eligibility required 10 years of university employment and reaching the age of 60 years by Jan. 31, 2010. All participating employees must retire from Iowa State by that date.

Behling said the average age of employees approved so far for the RIO is 62.5 years; the range is 75 years to 52 years. (Extension employees who participate in a federal retirement program qualified for the university's RIO at age 50 with 20 years of service.)

The incentive in the retirement incentive option is health and dental insurance coverage for up to five years after retirement (until the employee is eligible for Medicare). When retirees become eligible for Medicare, the university will pay health and dental premiums at the supplemental rates for the remainder of the five years, if any time remains.

Many units receiving one-time federal stimulus funds will use some of these funds to cover the costs of the RIO, including vacation and sick leave payouts and the first year of health and dental benefits.

Summary

As of July 8, 210 university employees have been approved to participate in the retirement incentive option. There could be a few more.