The administration of the University of Central Arkansas has called a special meeting set for today to ask the university's board of trustees to approve a voluntary retirement incentive plan, according to a notice released Wednesday.
The meeting will be held by telephone at 10 a.m. The public can call 855-332-4181 and enter the access code 4503173 to listen to the meeting.
The Voluntary Employee Retirement Incentive plan will allow UCA to provide eligible faculty and staff members with a completely voluntary retirement incentive that will allow leadership to plan strategically for the future, said UCA President Houston Davis.
The initiative is not being offered to avoid layoffs, but as a way to maximize the university's budget and "make the most efficient use of resources" as the college prepares for the next decade, said UCA spokeswoman Amanda Hoelzeman.
"UCA continues to have a balanced budget, and our reserves have increased over the last 18 months. Because of our ongoing ROI [Resource Optimization Initiative] efforts over the past three years, we are in a good financial position," Hoelzeman said. "We are hoping to offer VERI 2021, should the board of trustees approve it, to reward employees for their dedicated service to the university and to provide a better path to retirement for those who want to retire but are concerned about having health coverage."
The early retirement package is being offered to employees who are 59 and a half or older and have at least 10 years of total, full-time employment at the university as of Dec. 31 this year.
About 175 UCA faculty and staff members meet the criteria, according to university data.
Those who take the university up on its offer will receive 10% of their base salary as of Dec. 31 plus 0.5% of their base salary for each year of service beyond the initial 10 years, up to a maximum 20% of base salary.
Each participant will also receive a $300 monthly contribution into a health reimbursement arrangement account for 36 months beginning the month after his effective retirement date.
Employees will have 60 days to decide if they want to take the retirement offer. Participating employees can retire effective Jan. 15 or May 15.
"After completing the VERI process in 2019, we learned that there were additional employees who would have participated in the VERI, had there been a way for them to maintain their health benefits until eligible for Medicare," Davis said. "With the 2021 program, we have the opportunity to assist those employees and help bridge the health coverage gap that may exist between retirement and Medicare eligibility. This is an especially important incentive for us to be able to provide this year considering the ongoing strain covid-19 has put on individuals and families."
Last year, the university offered early retirement to 178 faculty and staff members; 49 took advantage of the offer.
In 2019, employees were given 25% of their base salary and, on top of that, 1% of their base salary for each year of continuous service to UCA up to 25 years. The monetary contribution to a health reimbursement arrangement was not offered.
Hoelzeman said this year's plan is not as focused on a one-time payment incentive as it is on addressing the ongoing health care costs of retirees.
"This offer will alleviate some of the concerns related to monthly health premiums," Hoelzeman said.
Jen Talbot, president of UCA's Faculty Senate, said she expects that, given the challenges this year has brought, some employees will welcome the offer.
"Health care costs are always a challenge, and I know President Davis was pleased to be able to offer some help in that area," Talbot said.
Steven Shook said that as president of UCA's Staff Senate, and "on behalf of the Staff Senate governing body at UCA, I will voice support for the Voluntary Employee Retirement Incentive Program."
Hoelzeman said that if all 175 eligible employees accept the offer, it would cost the university about $1.79 million.
"We estimate that 35% of employees will participate, based on our experience last year and experiences of universities around the country," Hoelzeman said.