Steven E.F. Brown, San Francisco Business Times, 1/4/12
The University of California
system now offers a “voluntary phased retirement plan” to its employees which it hopes will both save money and keep some valuable people around a bit longer.
The program, which started Jan. 1 after a 30 day comment period, was not even widely known among faculty yet — one U.C. Berkeley professor told me on Wednesday he’d heard nothing at all about it.
Trying out retirement
Under this deal, eligible employees will be paid a lump sum in cash when they sign a contract agreeing to work fewer hours until they retire early. That sum is a percentage of how much the university saves because they are leaving early.
“It’s almost like trying out retirement,” said Dianne Klein
, of the U.C. Office of the President in downtown Oakland.
Those who sign the contract will work reduced hours for a period of 120 days to three years.
Klein stressed that, yes, the university system, hard hit by budget cuts, hopes to save money this way. But “it’s also about saving employees,” she said. “Suppose you’re valuable and good at your job.” This deal keeps valued employees coming in at least part time for a while, rather than having them disappear suddenly in layoffs or by quitting early.
Golden parachutes now tin
The university has offered similar early retirement packages, once known as “golden parachutes,” in the past — the cash crunch of the late 1980s and early 1990s was one instance, and more than a few of my best teachers at Berkeley left the school then.
Klein said the parachutes have changed a bit since those days, though.
“They used to be golden, but now they’re tin,” she said.
This program has quite a few rules
— union members can only sign up if their collective bargaining agreements allow it, for example — and the university isn’t yet sure how successful it will be.
“We cannot say that right now,” Klein said when asked how much the university hopes to save. “We don’t know how many people will participate.”
The cash payment, Klein said, “will be good for both U.C. and the employee.”
Because the university will benefit from the chunk of savings it doesn’t pay participants, it won’t be too easy for people to change their minds and return to full employment. That’s why the deal requires a contract.
“You can’t double dip. It is pretty strict,” she said.
The program is voluntary, and employees can only take the deal if their supervisor agrees to it.
This program runs from Jan. 1 to the end of 2014, and the university will evaluate its success after more time has passed.