Planned Retirement Program
The University of Idaho developed a program to enable employees and their departments to plan for the employee's retirement more coherently. The plan encourages and allows faculty and staff members who meet established requirements to pursue other opportunities earlier in their lives rather than later.
Frequently Asked Questions
There does not seem to be much of a salary incentive to enter this program. What is the purpose of this program?
The Planned Retirement Program (PRP) is not an early retirement incentive program. PRP helps employees transition from full employment into retirement. The period of transition is intended to help employees and their families adapt to the changes in daily schedules and activities while planning for the full retirement without affecting their cost of health benefits or affecting service credits for determining eligibility for University of Idaho Retiree Health Benefits.
Please explain under what circumstances a request to enter the program could be denied. Also, please explain under what circumstances (if any) an employee could be required to enter the program.
To the extent feasible, and subject to any exclusions of the program, the university will attempt to accommodate requests from all employees. However, it is possible that the business needs of a unit may supersede employee wishes. This could result in either a delayed entry into the program or a denial to participate in the program. Examples may include:
- too many people terminating, retiring, and entering the program from one unit within the same timeframe;
- critical teaching, project delivery, or other business needs that cannot be accommodated or succeed without full-time resources.
In the event a request is denied, business reasons must be documented. The program is open to all health-benefits eligible staff and faculty.
A department may offer voluntary participation in the PRP; however, an employee is not obligated to enter the program. Program entry cannot be used in lieu of or as part of any disciplinary action. Full-time participation in PRP does not guarantee employment nor does it guarantee employment for any specific duration.
The PRP program’s enrollment will be allowed on an ongoing basis. The university will continue to assess outcomes and may cancel the program with 30 days advance notice. All agreements finalized prior to the expiration or cancellation of the program will remain effective.
Can employees still enter the program after their Salary Agreements have been executed and returned?
Yes! An employee can enter the program even after a salary agreement has been returned and accepted. A new salary agreement will need to be tendered when an employee enters the PRP.
Why can't I take on additional job duties (other than summer teaching) or accept a promotion in rank while enrolled in the PRP?
The Planned Retirement Program is designed to help employees adjust to a lighter work load that will more closely represent the changes in social and work activities upon full retirement. Increased work and additional responsibilities do not support this goal.
With appropriate approvals, either of the examples above would be acceptable, provided that a spread pay option is elected for an employee to continue to deduct pretax benefits through the payroll system. As long the work schedule is approved and the appointment does not drop below half-time, which is the minimum required for maintaining benefits, there are no restrictions imposed by the program, other than wage and hour laws affecting classified staff. However, employees participating in PERSI would not earn service credits for any month in which they do not receive pay for halftime or greater for at least half of the calendar year.
Active employees share in the cost of health benefits based on their status as a full, three-quarter or half-time employee. Full-time employees pay the smallest percentage share of these costs. Participation in the program assures employees that their share of cost for health benefits will not increase as a result of a reduced appointment. For example, if an employee holds a full-time appointment before entering the PRP, the employee will pay the full-time rate for the duration of their participation in the program without respect to a change in appointment.
Likewise, an employee holding a three-quarter time appointment prior to entering the PRP will pay the health benefits rate for the full duration of participation in the program.
This does not guarantee that the rates for coverage will not change. If rates change for University of Idaho employees, the rates will change for PRP participants. Benefit levels and other features of the benefit plans are also subject to change. Life and Optional Accidental Death and Dismemberment coverage will be based on the life insurance salary that is in effect on the day prior to entry into the program and will continue at this level through the end of the calendar year in which the employee began the PRP. Your Life and Optional Accidental Death and Dismemberment coverage is based on your salary on January 1st of each plan year. (subject to standard age reduction rules of the program that would have applied regardless of PRP participation).
Short and long term disability benefit levels will decrease consistent with a change in salary. For example, if a full-time salary of $50,000 is reduced to half-time, the new salary is $25,000. If the 60% long-term disability benefit has been elected and is payable, then 60% of the $25,000 basis will be used in determining your benefit.
How will contributions to the group retirement plans, PERSI or the ORP (Corebridge Financial or TIAA-CREF) be affected?
Contributions to either program will be continued based upon the new reduced salary resulting from the reduced appointment. This may or may not impact the benefits available to be drawn for the plan.
The ORP plans through TIAA or Corebridge Financial (formerly VALIC-AGI) are defined contributions that calculate your retirement benefits based on employee and contributions to plan, plus earning on investments.
PERSI participants receive a guaranteed lifetime benefit based on a combination of service and salary. If service is not earned by receiving pay at a rate of half-time or greater for more than one-half of the days within any given calendar month, consecutive or not, then service credits for the calendar month are not earned. Salary used in determining benefits is based on the average highest 42 months of earning.
For a complete understanding of the impact of retirement plan benefits employees are encouraged to contact the program administrator:
PERSI Choice Plan questions: 866-ID-PERSI (866-437-3774)
Corebridge Financial (formerly VALIC-AGI): 800-448-2542
Can an employee who participates in a Federal Retirement Plan, Civil Service or FERS participate in the program? (College of Agriculture and Life Sciences Extension faculty)
Yes, please contact a retirement specialist in Benefit Services at firstname.lastname@example.org. Federal plans prorate the annuity for part time work. You will need to fully understand how this may impact your retirement annuity.
For general information, please visit the Office of Personnel Management website.
COBRA is available to a spouse for a maximum of 18 months following the employee’s retirement. The cost of COBRA or the cost of retiree medical for a Medicare eligible spouse is much less expensive than the Pre-Medicare retiree spouse rate. If an employee’s spouse is covered under the employee’s active employee health plan, the PRP could allow the spouse to maintain lower-cost benefits for the duration of the PRP, allowing the spouse to reach Medicare eligibility.
If an employee will retire as a self-pay for University of Idaho Retiree Health Coverage, the cost of benefits under the active health plan for the duration of the PRP could allow them to maintain lower-cost benefits, again until Medicare eligibility.
A retiree or spouse can choose the University Retiree Health Plan or COBRA, but not one and then the other.
An employee could supplement his/her income if he/she has reached Social Security income eligibility. Social Security now allows an employee at full retirement age to draw full benefits and continue to work without limit. Early retirees under social security can work under specified earnings limits without affecting their benefit.
An employee eligible to accrue sick leave and annual leave on the day prior to entry in the PRP would continue to accrue leave based upon the percentage of appointment under the reduced appointment. For example, a half-time appointment results in half-time leave accrual.
Would an employee remain eligible to participate in a supplemental retirement plan and shelter wages into a pre-tax retirement account?
Yes, subject to IRS contribution limits for these programs.