Tenured Faculty Early Retirement Incentive Program

Effective February 21, 2014

Eligibility

To qualify an individual must be actively employed in a tenured faculty position at Williams, and:

  • have a half-time (0.5 FTE) appointment or greater,
  • be at least age 58 as of the first year of full or phased retirement,1 and
  • have at least 5 years of cumulative service at Williams.

This program is authorized by a provision in the Federal Age Discrimination in Employment Act applicable only to tenure track academic faculty, and therefore non-tenure track academic and athletic faculty are not eligible to participate in this program. Non-eligible faculty should consult with the Dean of the Faculty when considering their retirement options.

Options

The College offers two retirement options for eligible faculty: A) full retirement with one-time payment; or B) phased retirement at reduced salary and teaching load. These options are described more fully below.

Option A: Full Retirement

Opting for full retirement gives a participating faculty member a sizeable one-time payment at the end of their Williams career. Eligible faculty over the age of 58 but younger than 69 as of July 1 of the first year of retirement can elect to take full retirement and receive a one-time payment based on a percent of their appointment-adjusted2 terminal institutional base salary3, according to the schedule below.

Age as of July 1 of first full year of retirement

Amount of one-time payment as % of appointment-adjusted terminal institutional base salary

58

200%

59

200%

60

200%

61

200%

62

200%

63

200%

64

180%

65

160%

66

140%

67

120%

68

100%

Other than the six-month Initial Open Enrollment Period described below, this retirement program makes no provision for a full retirement payment for faculty members who are 69 or older.

The full retirement option does not provide additional allowances for accumulated sabbatical credit.  As stated in the Faculty Handbook (Section II.N), “The College’s sabbatical leave program is intended to provide opportunities for continued professional growth for the benefit of both the faculty member and the institution.  Faculty members are therefore normally expected to return to the College for at least one year after a mini-sabbatical and for at least two years after a full sabbatical.”  Thus “terminal sabbaticals” are not normally granted and cannot be taken immediately preceding a full retirement under the terms of this incentive program.

Option B: Phased Retirement

Phased retirement allows a faculty member to reduce their teaching to a one-half load for a maximum of three years with retirement occurring at the end of that period. Three years is a maximum; shorter periods of phasing are allowed. The exact distribution of courses over the period of phased retirement must be negotiated ahead of time with the Dean of the Faculty and the retiree’s Chair or unit supervisor and will be specified in the retirement contract.

Tenured faculty over the age of 58 but younger than 69 (as of July 1 of the first year of phased retirement) can elect to take phased retirement and receive a percentage of their appointment-adjusted institutional base salary annually during their phasing period that varies by age according to the schedule below. The percentage is “locked in” for the entire phasing term, although normal formulaic raises will continue to apply to the Institutional base salary during that time.

Age in first fiscal year in plan

% of appointment-adjusted institutional base salary earned annually during phasing period

58

80%

59

80%

60

80%

61

80%

62

80%

63

80%

64

75%

65

70%

66

65%

67

60%

68

55%

Other than the six-month Initial Open Enrollment Period described below, this retirement program makes no provision for a premium-paid phased option for faculty members who are 69 or older.

Professors in phasing arrangements do not earn credit toward a future sabbatical or paid leave.  Faculty with accumulated teaching credit towards a sabbatical should consult with the Dean of the Faculty prior to phasing.  Pre-existing credit can be used immediately prior to the beginning of the phased period.  Alternatively, pre-existing credit toward one mini-sabbatical can be used during the first or second years of the phased period to further reduce the teaching load by two courses.  Mini-sabbaticals taken during the period of phasing are paid at the age adjusted rate.

Initial Open Enrollment Period

(Closed as of August 27, 2014)

For the period from February 21, 2014 to August 27, 2014 all tenured faculty who meet the appointment, age and service requirements set out under “Eligibility” above can elect to receive the maximum payment (for either full or phased retirement) listed in the tables above regardless of their then-current age. This special age-neutral six month enrollment period is legally mandated for new programs.

Timing

A professor wishing to retire under this policy should notify the Dean of the Faculty of his/her interest in doing so by January 31 of the retirement year.  This deadline applies either for full retirement or for a phased option to take effect on June 30 of that year.  The decision to retire is not binding on the professor until a formal retirement agreement has been signed by the professor and the Dean of the Faculty.  The retirement contract, which will include a waiver of legal claims among other terms, will be legally binding on both the professor and the college. 

The retirement period begins on July 1 of the year specified in the retirement contract.  So, a professor choosing full retirement will fully retire on June 30th of the specified year.  A professor choosing a three-year phased option will begin the phasing period in the specified year and will retire on June 30 three years later.

Special Retiree Health Insurance Benefit (for faculty who retire through this plan)

Retirees under the age of 65 can still participate in the Williams College health insurance plan as individuals at the same subsidized rate that applies to active faculty members. In addition, the college has created a new benefit for those over the age of 65, and to support family insurance needs as well. This enhanced health insurance benefit plan for participants in the Tenured Faculty Early Retirement Incentive Program is described in greater detail at this link.4

Other Benefits

Faculty choosing the phased retirement option will remain active employees during the period of their phase and thus will participate in any employee benefits that are in effect during the period of their phase. Only benefits that are pegged to their actual paid salary would be affected by the phase (e.g., the college’s TIAA-CREF pension plan contributions).

Note that most Williams benefits and policies applying to faculty retirees remain unchanged. For example, the tuition grant benefit has been available and will remain available to retirees under this new plan. Another consistency is that this retirement program does not change the terms of the college mortgage benefit, i.e., the balance of the mortgage comes due upon full retirement.

Other frequently asked questions about benefits in retirement are addressed online at this link: http://hr.williams.edu/benefits/retirement/faq/.

Tax considerations

All salary income and full retirement lump sum payments are taxable income for both Federal and Massachusetts income tax purposes.

Non-negotiability

This Policy is governed by nondiscrimination and pension protection provisions of Federal and Massachusetts laws, including in particular the Age Discrimination in Employment Act and the Employee Retirement Income Security Act, which require that equity must be maintained for all participants. Therefore the elements of this plan are fixed. The eligibility, timing, compensation, and other terms cannot be changed.

Administration and Amendment

The college is the plan administrator for this policy, with full discretionary authority to administer and interpret the policy. Any claim under this policy must be submitted in writing to the college, which will respond, in writing, explaining how and when benefits will be paid, or why they will not be paid, and outlining any procedures for appeal. The claims procedure under this policy may be obtained by contacting the office of the Dean of the Faculty. The college may amend or terminate this policy at its discretion.

Other Paths to Retirement

The Dean of the Faculty is available to talk with any faculty member about retirement. Faculty considering their options should bear in mind that no financial incentives are available outside of the Tenured Faculty Early Retirement Incentive Program.


1 For purposes of eligibility under this policy, a faculty member’s age always refers to their age as of July 1 of the first year of full or phased retirement.

2 For example, a 58 year old faculty member with a 1.0 FTE (i.e., full time) appointment at the time of the retirement contract would receive the full 200% payment, whereas the same individual with a 0.50 FTE appointment would get 50% of 200% (i.e. 100%) of their Institutional Base Salary.

3 Institutional Base Salary (IBS) does NOT include chair stipends or other remuneration for additional responsibilities. Terminal IBS is calculated as of June 30 of the last academic year in which the faculty member taught.

4 http://faculty.williams.edu/tenured-faculty-early-retirement-health-benefit-plan-2014/.

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