When funding is reduced and budgets need to be tightened, it doesn’t take a PhD graduate—although the University of Alberta (U of A) has plenty—to know creative planning is needed to meet both organizational and workforce needs.
For the university, one of the solutions was its voluntary retirement incentive plan (VRIP), which was launched in January. The program was open to all academic and non-academic staff and rewarded them for voluntarily retiring on July 31, 2010. For approved applicants over 60 years of age with 10 years of service, they received a lump sum payment equal to one year’s salary. For those ages 55 to 59, a payment equal to 15 months’ salary was given. “Twelve hundred staff in total were eligible for the program, and the take-up rate was 12%,” says Diane Albrecht, director, staff programs, HR services, at U of A. “This program was made available to help faculties meet budget constraints.”
Trying to work on a tight budget is an issue that frequently plagues educational facilities, but so is attracting and retaining the right people. The university works diligently to recruit the right kind of staff needed, but it also offers flexible retirement arrangements to avoid brain drain on the school.
For those who aren’t quite ready to completely retire once they’re eligible for their pensions, academics can choose to retire and continue to work in a reduced capacity. “They can opt for [reduced duties] and wind down over a two- or three-year period, working half-time [or] one-third time,” Albrecht explains. “These are actually highly utilized programs. This year, about 50% of academics who retired outside of the VRIP program chose to continue to work on a part-time basis,” she says. “They can continue to teach and conduct their research on a reduced basis. People are becoming more and more interested in this option.” And with the ability to do that and still draw a pension, it’s a good way to help make up for any lost savings during the recession.
“It’s a real win-win for us. We don’t want to lose the expertise of our staff—that ‘here today, gone tomorrow’ situation that sometimes happens with retirement. It allows for planning. A lot of people are experts in a particular field, and it’s difficult to replace [those] of that calibre.”
Pros and Cons of Multiple Pensions
Academic staff members at U of A are members of the Universities Academic Pension Plan (UAPP), which is a defined benefit plan jointly sponsored and trusted by five Alberta universities and their respective faculty associations.
The UAPP costs have been rising over the last several years, retirement patterns have been changing with an increasing number of staff retiring later and, with the market downturn, there was no choice but to increase contributions this year. However, the current plan provides generous early retirement features and does provide a good benefit. “People see the value and are less concerned about small increases,” Albrecht says.
Support staff members at the U of A are members of the Public Service Pension Plan, which is an Alberta public sector multi-employer defined benefit plan. From an employer perspective, participating in two separate pension plans certainly adds complexity. “With the academic staff plan we have more direct involvement in developing and delivering on the member experience,” says Albrecht. “Unfortunately, our role in the support staff plan is limited, which can stymie the level of service the university would like to give.” She adds that while the plan is solid and provides excellent benefits, it operates arm’s length from the university. “Members don’t necessarily see the contribution that the employer is making,” Albrecht says. “And when you are working through third-party administration, it can be confusing to the member on where they go to obtain the pension information they are looking for.”
Technology has helped, however. “There are a lot of good Web tools now that do help with that.”
April Scott-Clarke is associate editor of benefitscanada.com. april.scottclarke@rci.rogers.com
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© Copyright 2010 Rogers Publishing Ltd. This article first appeared in the October 2010 edition of BENEFITS CANADA magazine.