A retirement incentive proposed by Ferris administration caused negative reactions among many faculty members.
The Ferris Board of Trustees released the Early Retirement Incentive Plan (ERIP) Monday, Feb. 26. According to the Ferris Division of Administration and Finance Vice President Jerry Scoby, the goal of the plan is to reduce the number of paid employees as a way of adjusting to recent budget cuts.
“While we do not like to see so much talent and institutional memory leave all at one time, we will have to reduce positions to achieve the necessary budget reductions. The voluntary ERIP was put in place to create vacancies that can be eliminated to help balance our budgets. The number of vacancies that normally occur each year and had already been announced by employees is not enough to achieve the required budget reductions,” Scoby said.
For those who applied and were accepted between the plan’s announcement and its closure March 26, the ERIP offered a retiring employee either $10,000 or 2 percent of the employee’s salary multiplied by the number of years the employee has been at Ferris—whichever is greater. The ERIP also provides a full year of insurance.
While this may seem like a positive incentive, many faculty members disagree. According to Ferris physical science professor and Ferris Faculty Association (FFA) President Charles Bacon, current faculty contracts offer a retirement buyout with similar benefits.
“We have a provision in our contract for a buyout. The University has already agreed to that,” Bacon said. “That provision is what we feel should be honored. Obviously, the ERIP is an attempt by the University to get people out cheaper.”
Bacon said that, in the contracts of the 450 FFA members, a buyout of a full year’s salary and a full year of insurance is offered and faculty have the option to receive the payment either in lump sum or in installments over 20 or 26 pay periods. On the other hand, the ERIP only offers a lump sum payment, which would give faculty “a very high tax bite,” according to Bacon.
Another issue regarding the ERIP is that it is not available to anyone who applied for retirement prior to Feb. 26.
“We have a clause in our contract that says you have to notify the administration of your intent to retire seven months before,” Bacon said. “So faculty that were going to retire this May followed the rules. Then, the end of February, they announce this incentive plan. Those people who followed the rules and applied for retirement get nothing. You can imagine they weren’t happy.”
Scoby said this is because the plan intends to get more people to apply for retiring.
“Individuals who had already informed the University that they were going to retire or take a job elsewhere were not eligible. It is important to keep in mind that the purpose of the program is to create additional vacancies, beyond those already announced, to eliminate as part of the budget reduction process,” Scoby said.
According to Scoby, the ERIP is expected to be a one-time offer that will not be repeated in the future.
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