UALR resumes early retirement

Savings estimate cut after only 11 faculty members apply

The University of Arkansas at Little Rock has opened its first early-retirement window after suspending the incentives for tenured faculty two years ago.

The school estimated that up to 25 tenured faculty members and five nontenured members would go for the buyout -- which was projected to save the university about $850,000, said Sandra Robertson, the school's director of budget and strategic initiatives.

So far, though, only 11 have applied.

Leaders at UALR hope the incentives will trim costs and increase the efficiency of its programs and services at a time when state funding has stagnated and operating costs are increasing.

"It's a way to reduce costs of operation, and it's a humane one in that it's voluntary," Chancellor Joel Anderson said of early-retirement programs. "We're not terminating people in order to achieve savings. One byproduct of it is if you have retirements in area A, and nowadays you need a faculty member in area B more than you do in A, it gives you the flexibility to move dollars around and respond to changing market demand."

While the university did not know Tuesday an exact amount of savings from the 11 faculty members, the savings estimate has dropped to $500,000. The final figure will depend on how many of the agreements are ultimately approved and how many spots will be refilled, Robertson said.

The number retiring early at UALR represents just a sliver -- or about 7 percent -- of the 161 tenured faculty and nontenured faculty members eligible for the early-retirement incentives and about 1 percent of the university's total faculty.

The university used to offer an early-retirement incentive year-round that included a benefit equal to the nine-month salary of a tenured faculty member, but that was discontinued two years ago, Robertson said.

"The present window offers only a one-semester benefit to eligible tenured faculty who retire by the end of the summer," she said. "It is thus a special, short-time window, with half the previous benefit."

UALR leaders, including Robertson and Anderson, have said students will not see too much of an effect from the buyouts.

"Some students may miss a favorite teacher, but progress to a degree should not be affected," she said. "[The] number of sections will be the same or close to the same."

The university is coming out of a restructuring period that included some $2.4 million in cuts to its five colleges and nonacademic units. Last fall, the school increased its enrollment to 11,924 students, breaking its four-year downward trend while leaving tuition flat. The university is expecting about the same enrollment in fall 2016.

In a letter in April to the campus community, Anderson first brought up the idea that he would reintroduce the early-retirement incentives as a cost-saving effort. The letter included seven recommendations -- including one for leadership to complete the 2016-17 budget as soon as possible -- for the campus from Sal Rinella, a senior associate at the American Association of State Colleges and Universities.

Rinella suggested the university make additional budget reductions where possible and continue the position management and salary savings program -- both of which he said would require "sacrifice" from everyone on campus. Those recommendations came after Rinella learned that there was little support for another round of budget reductions.

"This comes partially because people are fatigued, but also because there is a sense that additional reductions need to be made based on a longer-term view into the future," he wrote in his report. "... bringing the 2016-17 [budget] to closure as soon as possible will go a long way toward addressing anxiety in this time of leadership transition. Following completion of the 2016-17 budget, there should be an all-campus assembly to present the financial situation and the actions being taken to enhance revenues and manage costs."

UALR is on a firmer financial foundation now, said Andrew Wright, the faculty senate president and an associate professor in systems engineering.

"But ... you want to make sure you're prepared for the future," he said. "The world outside campus with respect to academia still has a bunch of uncertainty in it. We're trying to make sure we're as financially sound as we can be."

The buyouts have had no effect on faculty morale, he said, adding that the offer gave an opportunity for some to move into retirement.

"We always have faculty leaving at the end of the term or at the end of the year," Wright said. "That's relatively normal for us to deal with. It depends on the numbers, but we'll find a way to make it work."

That's the beauty of being a school in a metropolitan area, Anderson said.

When a faculty member resigns at the last minute or gets sick, the university can hire an adjunct faculty member, someone well-qualified, he said. Depending on the course, a department chairman or dean can also move faculty members around to fill high-priority courses, he said.

The university is also offering the early-retirement incentive to eligible classified and nonclassified staff members, who have until June 1 to submit applications to their respective vice chancellor. Eligible faculty and staff members must have worked at least 10 consecutive years at the university; the combination of a faculty or staff member's age and his years of service with the university must total at least 70.

Eligible tenured faculty members will receive half their salaries as a cash stipend on Aug. 31. They can opt to put some of that money into the university-approved retirement plan on Aug. 31 while receiving the rest of Jan. 15.

If approved, nine-month tenured faculty members can retire Aug. 15, while 12-month tenured faculty members can retire June 30.

The incentives available to nontenured faculty or staff members will be cash stipends of a quarter of their annual salaries, plus half of 1 percent of their salaries for each year of full-time continuous employment at the university. For example, an eligible employee with 20 years of service who earns $60,000 annually will have a cash stipend of $21,000.

Disbursement for nontenured faculty members will be Aug. 31 with retirement on Aug. 15.

Disbursement for staff members will be July 31 for June 30 retirees or Oct. 15 for Sept. 30 retirees. Those employees can opt to have the stipend over two years in two installments, with the second installment on Jan. 15, 2017.

The University of Arkansas System board has the final say for all early-retirement agreements at its colleges and universities. Trustees will meet May 25-26 in De Queen and consider the agreements in executive session before taking a public vote on each.

NW News on 05/08/2016

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