As Trent University gets on the bandwagon to steer the current budget challenges, the university recently announced a voluntary early retirement incentive for staff and faculty members.
Trent University One-Time Early Retirement Incentive Program, is a time sensitive opportunity to alleviate pressure on the budget, which was collectively agreed upon between the board of governors of Trent and the Trent University Faculty Association (TUFA) on March 9, 2015.
“It is an important decision to manage the budget pressure, and also provide opportunity for renewal,” said Trent University’s president and vice-chancellor, Dr. Leo Groarke. Because depending on how many people go, Dr. Groarke explained that there will be a certain number of new positions that come out of this, not to mention the possibilities it will allow Trent to rearrange what they can offer as a university.
“I will cautiously say that a significant number of people have expressed interest, but we need to be careful about jumping to conclusions because it is easy to express interest, but what really matters is how many people decide after they see the benefits in actual numbers,” said Dr. Groarke.
All universities these days are facing fiscal challenges and Trent is no different from that point of view, he said. Trent anticipates that in the current year in order to manage the budget they will have to cut five to seven millions dollars from the operating budget. So this program, even though it will put pressure on the budget in the short term, is however designed to reduce the budget in such a way that it will lessen any reduction to the budget in the future, he explained.
Since this program is meant to reduce the operating budget, whether someone will be able to take the program depends on if their leaving will reduce the operating budget, said Dr. Groarke. When people retire, the cost of running the university will be reduced significantly.
There is a staff package and faculty package that has been offered. To qualify for the staff, one needs to have 80 points, age plus the number of years of service, which he explained is a standard way of deciding the eligibility of pension plans. For instance, if an individual is 60 years old and has 20 years of service then they can apply. But for the faculty situation, it is much more open ended. Even though 65 is the normal retirement age to be entitled for normal pension (a pension penalty if they retire before 65 years), the benefit of this package is that the individual will get a year’s salary without any work obligations. A full year buyout, he noted.
In the meantime, the university is planning some replacements but will have to judge the situation on a case by case basis. For instance, for a staff position they will leave it just the way it is but for a teaching position, for every two that leave they have guaranteed to provide one replacement, it was explained.
President Groarke said that they may in the short term have to do contract positions, but will hire full time positions in the following year.
He also pointed out that in terms of re-employment, if a full time faculty member takes the incentives, then they cannot come back as a full time faculty member but they could still teach part time, which again is up to the individual themselves and departments that hire those part timers. Teaching part time from a cost point of view is a very effective way to provide teaching, he noted.
On the other hand, if no one takes this program then they will have more of a challenge managing the budget, resulting in cuts to avoid deficit. However, decisions have not been made. They will meet with different budget managers in the weeks to come, and as such they are currently not certain as to what they would do. At this time they are not planning on layoffs but might be in a situation where Trent cannot hire as many instructors as it would like to hire, and there might have to be some adjustments from that point of view, says Dr. Groarke.
Besides this program, to address the budget challenge, one of the things Trent is doing is to identify why Trent has deficit. According to Dr. Groarke, one of the principal reasons is Trent’s significant pension liabilities, which is currently spending seven million dollars a year, so they are trying to actively solve that problem.
Another thing they are trying to do is grow the number of students, and that has a significant impact on the budget. He said that there is especially more room for students in Durham, and hopes that it will offer some relief from a budget point of view.
“This is intended as a win-win situation – an opportunity which provides incentives and makes it easy for those faculty and staff who want to retire to do so. It is also a win for the university in so far as their retiring will help with the budget issues,” stated President Groarke. But it is up to them to think about their own situation and to make their decisions accordingly, he added.
“I haven’t given it a lot of thought because I am not ready to retire myself,” said Chemistry Professor, Dr. Andrew Vreugdenhil. But he thinks that it is a good opportunity for the university to get some faculty renewal. Also, with the abolishment of mandatory retirement, it can be a viable opportunity for those those who are just looking for an excuse to retire. But that is coupled with the fact that the university needs to replace faculty or commit to providing new resources so that the university can carry out the skills and expertise that are lost when those people retire, said Dr. Vreugdenhil.
“It can be an opportunity but we will certainly lose some skilled people if they feel that they are going to take hold of this opportunity,” he added.
It is a good incentive, said Professor of Sociology, Dr. Stephen Katz. But the only disadvantage is the urgency in which they are asking them to make the decision. Dr. Katz said that retirement is a big decision, for instance some of them have sabbatical planned, or research projects and office matters that need to be dealt with. It is not something one can make a snap decision about, opined Dr. Katz.
He also mentioned that one of the advantages of it is that it incentives the administration towards a future replacement plan that hopefully translates into attaining intelligent replacements.
When asked who were the target employees of the package, Dr. Katz said that the seniors were the obvious target. If he were 65 years old he would surely take it. However, he will not because of the penalty one has to pay for each year of life if they retire early, he said.
On the other hand a few other staff and faculty members Arthur talked to either said that it is too soon to comment, or that it is too personal of an affair to make public.
In the meantime, the deadline for eligible employees to accept the one-time retirement incentive is April 30, 2015.