Faculty Early Retirement Incentive Program
- Responsible Office: Faculty Affairs, Office of the Provost
- Current Approved Version: 08/01/2018
- Policy Type: Board of Visitors
Policy Statement and Purpose
The purpose of the Faculty Early Retirement Incentive Program (FERIP), as described in this document, is to facilitate the release of tenured faculty resources for budget reallocation or reduction in accordance with the university strategic plan goals, changes in enrollment, and other university needs and to provide a financial early retirement incentive for certain tenured faculty. This program is not designed to be a faculty fringe benefit program; it is a management tool.
Flexibility in the faculty early retirement incentive plans and agreements is both desirable and necessary. This university faculty early retirement program, therefore, is a framework for management guidance rather than a prescription for specific action.
Noncompliance with this policy may result in disciplinary action up to and including termination. VCU supports an environment free from retaliation. Retaliation against any individual who brings forth a good faith concern, asks a clarifying question, or participates in an investigation is prohibited.
Who Should Know This Policy
All tenured faculty and all university administrators responsible for faculty human resources administration should know this policy and familiarize themselves with its contents and provisions.
A tenured appointment is an appointment that continues until the faculty member either voluntarily leaves the university or is dismissed for cause under the Faculty Promotion and Tenure Policies and Procedures policy. Tenure is conferred in accordance with the criteria and procedures established by the Faculty Promotion and Tenure Policies and Procedures policy and supplemented by appropriate school and department guidelines.
The Office of the Senior Vice Provost for Faculty Affairs officially interprets this policy. The Office of the Senior Vice Provost for Faculty Affairs is responsible for obtaining approval for any revisions as required by the policy Creating and Maintaining Policies and Procedures through the appropriate governance structures. Please direct policy questions to the Office of the Senior Vice Provost for Faculty Affairs.
Policy Specifics and Procedures
A. General Provisions and Framework
- Early retirement incentive plans, policies and practices must comply with state law and regulations as specified by the General Assembly of Virginia.
- Early retirement agreements, as used in the context of this document, apply only to tenured faculty, including those who have the designation of “academic administrator.”
- The university's early retirement incentive program provides an incentive plan for immediate separation (or retirement) of faculty from tenured employment with the university.
- Early retirement agreements must be mutually agreeable. A faculty member is not automatically entitled to benefits for which provision is made in this early retirement program and the university cannot require a tenured faculty member to accept early retirement.
- In the event a faculty member becomes permanently and totally disabled after a FERIP agreement is signed, but before its effective date, the university, nevertheless, will be responsible for providing payments for which provision is made in the agreement. In the event a faculty member dies after a FERIP agreement is signed, but before its effective date, the university will not be responsible for any payments under the agreement and such agreement shall be considered null and void.
- Subject to the approval requirements imposed by law, the Virginia Commonwealth University Board of Visitors has the authority to modify, amend or repeal this FERIP. Faculty who retire under an executed FERIP agreement, however, will continue to be subject to the terms of the program in effect at the time of retirement.
- The FERIP must be reviewed for legal sufficiency and approved by the attorney general and the governor of Virginia prior to its adoption, modification, amendment or repeal.
B. Implementation and Approval Process
- The university president, in consultation with the vice president for academic affairs and the vice president for health sciences, will determine during the spring semester of each academic year whether the program will be offered for the ensuing academic year. Provision will be made for the notification to the faculty of the availability or unavailability of the program.
- FERIP agreements will be reviewed and evaluated within a coordinated university-level process of faculty resource utilization planning and management to address strategic plan goals and other university priorities as stipulated in the VCU Faculty Early Retirement Incentive Program (FERIP) Implementation Guidelines which can be found at https://insidehr.vcu.edu/faculty/retirement-programs/.
- No central university resources will be set aside to fund FERIP agreements. Funds to support the program must be identified within existing school/college resources. The total annual costs for this program shall not exceed three percent of the university’s general fund appropriation for faculty salaries and associated benefits.
- The dean of the appropriate school or college must approve and recommend each FERIP agreement prior to its consideration by the appropriate vice president.
- Each vice president will make recommendations to the president for final approval.
- Guidelines for preparation, review and approval of FERIP agreements are provided in the document VCU Faculty Early Retirement Incentive Program (FERIP) Implementation Guidelines.
II. Components of the Plan
A. Financial Incentive
- If selected for the participation in the FERIP program, and in exchange for a faculty member’s agreement to retire or separate from their tenured faculty position immediately (i.e. within 12 months from the date of the application), the faculty member will be entitled to participate in the Virginia Commonwealth University Supplemental Retirement Plan for Faculty (the “Plan”). The Plan will provide the faculty member with a payment equal to 100% 1 of the average university salary of the teaching and research faculty who potentially would be eligible for participating in FERIP as of July 1 of each calendar year.2 Payments will be made over five years in equal monthly payments. The Plan is intended to be a qualified defined benefit plan pursuant to the Internal Revenue Code of 1986, as amended. Payments under the Plan are intended to supplement any retirement benefits the faculty member may be receiving from the VRS and/or the Optional Retirement Plan.
- With each new FERIP program offering, the average university salary of the teaching and research faculty who are eligible for FERIP will be recalculated based upon those who are identified as meeting the eligibility criteria as of July 1 of each calendar year.
- In addition to the salary incentive component of the Plan, the university also will provide a health care supplement (premium assistance) until the participant becomes Medicare eligible (currently age 65) or up to 18 months of COBRA benefits paid through the Plan, as is more specifically defined in the document VCU Faculty Early Retirement Incentive Program (FERIP) Implementation Guidelines which can be found at https://insidehr.vcu.edu/faculty/retirement-programs/.
B. Eligibility Criteria
To be eligible to apply for participation in the FERIP , a faculty member must be tenured and either (1) must be at least 60 years of age and have completed at least 10 years of full-time service with the university, or (2) if the faculty member is 55 through 59 years of age, the sum of the individual’s age and years of service must be at least 80. Participants must agree to withdraw from active membership in the VRS and/or an Optional Retirement Plan (ORP). If the faculty member retires or separates under this FERIP, the university will cease contributing to the faculty member’s VRS or Optional Retirement Plan account.
C. Selection Criteria
- The purpose of this early retirement incentive plan is to supply the university with a management tool to provide incentives for the release of tenured faculty position-based resources for reallocation or reductions, in accordance with university strategic plan goals, changes in enrollments, and other university needs.
Applications will be considered in the context of the criteria that are in the best interests of the university. They include, but are not limited to: the goals of the university’s strategic plan, especially those areas identified for diminution; the tenure profile of the department; the proportion of potential applications for participation in the program in a unit/department and the workload of the department; changes in enrollments; the demand for an applicant’s expertise; general availability, cost and need for replacement faculty; and the savings to be realized by the retirement or separation.
D. Administrative Structure
The Virginia Commonwealth University Supplemental Retirement Plan for Faculty (the "Plan") will be administered through the university. All payments under the Plan will be made through the Plan’s trust, pursuant to the provisions of the Plan. The health care supplement payments will be made by the university to the faculty member to continue the employee’s participation in the state health benefits program or Extended Coverage (COBRA).
E. Program Cost and Limitations
No central university resources will be set aside for FERIP agreement costs; funds to support agreement requirements must be identified within then-existing school/college resources. The dollar cap per fiscal year is equal to three percent of the university’s general fund appropriation for faculty salaries and associated benefits.
F. Application Period
An annual application period will be established by the university administration each year in which the program will be offered.
Participation in this early retirement incentive program will not preclude the faculty member from some future employment with the university or with another Virginia agency or institution on a part-time basis (in a position not eligible for Virginia Retirement System or Optional Retirement Plan), subject to the needs and approval of the appropriate unit of the university or other Virginia agency or institution. Possible opportunities at VCU may include adjunct teaching and other instructional and research activities. The faculty member will be required, however, to withdraw from active participation in the Virginia Retirement System (VRS) and/or an Optional Retirement Plan (ORP), complete a bona-fide separation period as defined in applicable regulations, and may not be employed in any position or capacity that requires participation in the VRS or ORP.
There are federal and state laws which impose restrictions on the re-employment of retirees. These restrictions must be complied with and they include, but are not limited to, a 26 week break between the retirement date and any re-employment with the university. For more details on these re-employment restrictions see VCU’s Procedures for Part-Time Employment of Retirees.
Every three years, the VCU FERIP, with its accompanying VCU Faculty Early Retirement Incentive Program (FERIP) Implementation Guidelines and the Supplemental Retirement Plan, will be reviewed by an ad hoc committee appointed by the university president or the president’s designee. The committee will include faculty representation.
There are no forms associated with this policy and procedures.
1. VCU Policy: Faculty Promotion and Tenure Policies and Procedures
4. Sample FERIP Agreement (located at https://insidehr.vcu.edu/faculty/retirement-programs/)
This policy supersedes the following archived policies:
|May 2009||Not available|
|July 2012||Not available|
|July 24, 2015||Faculty Early Retirement Incentive Program (FERIP)|
|August 1, 2018||Faculty Early Retirement Incentive Program (FERIP) [August 23, 2019: Removed and repaired broken hyperlinks.]|
2The average university salary of the eligible teaching and research faculty will be determined by (1) identifying all tenured teaching and research faculty, except for administrative faculty who have faculty tenure, who meet the age and service criteria for that year, (2) totaling the respective salaries of all such faculty members from university resources, and (3) dividing the total number of potentially eligible faculty into the total aggregate salary.