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Q      Questions and Answers about the Voluntary Separation Plan

These are questions that have been asked during information forums or individually by those considering the voluntary separation plan. Answers are provided by members of the Voluntary Separation Implementation Team. If you have a question, feel free to send it to this address for answers.

Q. At what age, and under what terms, can I start collecting what I have put into TIAA-CREF?

A. According to information provided by TIAA-CREF, since UVM allows early retirement at age 55, those who retire between 55 and 59 and 1/2 can withdraw money from their CREF accounts without the 10% IRS penalty tax. TIAA allows one to take interest only, a lifetime annuity, or a 10-year pay-out.

Q. If I am approved for the separation plan in the 2003 budget year that ends June 30, 2003, I understand that my employment will be separated by that date. Would I be able to select an "equal amounts over 1-year at each pay cycle" option thus receiving money until June 30, 2004?

A. Because of the strategic nature of the voluntary separation plan, your separation would have to fit in with the financial goals for that fiscal year, i.e., July 1, 2002 to June 30, 2003. Therefore, it is highly unlikely that a termination date of June 30, 2003 will be approved. That being said, the options are:

  • Lump sum at separation.
  • Lump sum in January following separation.
  • Equal amounts over 1-year at each pay cycle, i.e., semi-monthly or bi-weekly.
  • Equal amounts over 2-years at each pay cycle, i.e., semi-monthly or bi-weekly.
  • Equal payments in January for two consecutive years.
Thus, if you retire on June 30, 2003, you could continue payments through June 30, 2005.
  1. If I am approved for the separation plan and leave employment on September 30, 2002, and if I select the "equal amounts over 1-year at each pay cycle," does the "year" end on June 30, 2003 or on September 30,2003?
  1. The year ends on September 30, 2003.
  1. For the purposes of the voluntary separation plan, how is a fulltime employee defined?
A. For staff, a full time employee is one who works 75 - 100% FTE for 12 months of the year. For faculty or staff with 9, 10, or 11 month academic year appointments, a fulltime employee is one who works 100% FTE.
  1. I'm 40 years old and I have worked at UVM for 10 years and am interested in the voluntary separation plan. Would I be eligible?
  1. Yes, as long as you have 10 years of fulltime service, you are eligible for the incentive payment. You would not be eligible for the post-retirement benefits. You must be at least age 50 to be eligible for bridging into post-retirement benefits. If approved for the voluntary separation plan, there will be no special benefit extension provisions for those under age 50. Your benefits will end on your termination date, extended by one calendar day for each day of vacation to a maximum of 30 days.
  1. If two people apply for the voluntary separation plan and have fairly equal service records, how will the decision to grant a separation plan be determined?
  1. The decision will be based upon the needs and objectives of the institution and will be made with the objective of keeping the University as strong as possible going forward.
  1. I have accumulated vacation days which I would prefer to be paid for at separation rather than taking them. Would that be possible?
  1. Yes, if you have accumulated vacation days, they may be paid for upon separation. The maximum number of vacation days which you may be paid for is two times your annual accumulation as defined in the Staff or Officers Handbook or in the bargaining unit agreement. The maximum number of vacation days which you may be paid is 44 days if exempt, and 40 days if non-exempt. You will not be paid for any accumulation of medical days upon separation.
  1. What if I apply for a voluntary separation and am turned down, and then I retire before June 30?
  1. In that case, you would retire under the same terms as a normal voluntary termination and receive post-retirement benefits which do not have grandparented premiums.
  1. What if I sign a voluntary separation agreement, stay on for three years, and find that the medical insurance premium increases while I am here?
  1. You will pay the increased premium as long as you are an active employee. When you retire, and you qualify for bridging your health care benefits, you will pay one-half of the COBRA premium until you reach age 55. If you have already reached age 55, you will contribute toward your medical insurance premiums as defined in the Staff or Officers Handbook or your collective bargaining agreement. However, if you applied for an early separation agreement prior to July 1, 2000, your medical insurance premium will be as it would have been had you retired on June 30, 2000.
  1. I'd be interested in shielding a lump-sum payment from taxes. Any ideas?
  1. Currently you are free to contribute up to your maximum exclusion allowance (MEA) each year into your UVM retirement savings plan. You may request a special final year of employment MEA from your retirement plan vendor, i.e., TIAA-CREF, Fidelity, Prudential or Calvert. In order to calculate the final year MEA, you will need to provide them with your total expected earnings from UVM plus your UVM contributions to the retirement plan for your final calendar year of employment.
  1. Would applications for the voluntary separation plan be based in any way on a first come, first served basis?
  1. Yes, this could be a factor, though not strictly. For example, if two people apply before June 30, 2000, the critical factor will be the budgetary and strategic needs of the department. Since a decision will probably be made by early July on applications received by June 30, 2000, assuming the needs are met by those who request separation prior to June 30, those who apply later will likely be turned down. Applications will be processed as they are received.
  1. I am employed by both UVM and by Fletcher Allen Health Care. Is this voluntary separation plan a cooperative arrangement with Fletcher Allen?
  1. No, Fletcher Allen is an entirely separate employer. However, there will be a separate plan for faculty in the College of Medicine. You should check with your dean's office for details.
May 5, 2000
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Last modified May 05 2000 03:15 PM

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