Optional Retirement Incentive Program (ORIP)
Frequently Asked Questions
To reduce university ongoing salary expense through incentivizing the voluntary retirement of employees.
Eligible employees meet ALL of the following criteria.
- All employees aged 55 or older with twenty (20) consecutive years or more of service in a benefit-eligible position based on the current hire date, counted through the end of FY20.
- Must not have an accepted resignation from the university or made a retirement announcement (FSH 3940).
- Must not have entered into an agreement for Planned Retirement.
- Must not have agreed to separation under the Voluntary Separation Incentive Program (VSIP).
- Is not subject to a “notice of contemplated action” or other similar notice with the potential for involuntary termination as of the date of application (this includes matters under appeal by the employee).
- Is not subject to a notice of nonrenewal (FSH 3900 B) as of the date of ORIP application.
- Is not a temporary, student or post-doctoral employee.
- Is not employed under a budget funding contingency – e.g. grant funding, service center funding, etc where the specific salary agreement or salary letter contains language allowing termination based on lack of funding source.
- Three (3) annual payments of 1/3 of the employee’s FY20 budgeted salary.
Portions of an employee’s salary funded by any of the following sources are not eligible, and will not be considered when calculating this incentive:
- ARES (includes Hatch, Smith-Lever, Multi-State Research, County Extension and State ARES funding)
- Calculation Examples
- If an employee’s budgeted salary is $100,000 paid from General Education funds, the incentive payment is $20,000 annually for five years.
- If an employee’s budgeted salary is $100,000 with $20,000 from General Education funds and $80,000 from ARES, the incentive payment is $4,000 annually for five years.
- Budgeted salary excludes overload, overtime, temporary responsibility increases, additional compensation, etc.
- Payment to be made within the first thirty (30) days of each ensuing fiscal year for the five-year term.
- Incentive payment is subject to payroll taxes.
- No benefit deductions or matching contributions for ORP or PERSI; deductions cannot be made at the request of the employee for supplemental retirement accounts, 403b and 457b subject to governing regulations.
- Health insurance per policy for separating employees (FSH 3730).
- Leave balance payout per policy for separating employees (FSH 3710).
- Access to PERSI or ORP program retirement funds per current plan rules.
- Interested employees must apply for participation in the ORIP by December 13, 2019.
- The university will review applications and give written notice to employees who qualify for participation in the ORIP by December 20, 2019.
- Employee has forty-five (45) days to consider and accept/sign the formal ORIP offer.
- Acceptance for all eligible employees must include signing the separation agreement and delivering it to the university by February 4, 2020. After acceptance has been completed, employees over the age of 40 will have seven (7) days within which to rescind their acceptance, after which the acceptance is irrevocable. For employees under the age of 40, acceptance, once delivered, is irrevocable.
- Notice to employee will include a formal separation agreement for the employee to consider and sign upon acceptance.
- The university’s notice to employee will be considered an offer by the university to accept employee’s resignation under the terms of the ORIP.
- Once the offer is accepted by the employee, the last day of employment must be no later than June 26, 2020.
- Once the offer is accepted, the employee may resign at any time prior to June 26, 2020 (the incentive payment will remain in effect but will not be rescheduled).
- Once the offer is accepted and, where applicable, the seven-day rescission period has passed, the decision is irrevocable.
- If signed agreement is not returned to the university by the deadline, the offer will be withdrawn.
- Employees accepting the ORIP offer will not be eligible for an FY21 salary adjustment.
- Employees remain subject to university policies and any corresponding employment action through the last day of employment.
- Employees separating under the ORIP will not be re-employed with the university in the same job any time prior to the end of FY21.