Kyle Cavanaugh discusses the voluntary retirement incentive for monthly-paid staff at the first of several information sessions.
Employees Learn More About Monthly Retirement Incentive
Kyle Cavanaugh, vice president for Human Resources, greeted a packed conference room on Wednesday for the first of a series of information sessions about the Monthly Staff Retirement Incentive.
About 35 eligible staff members turned out to hear details about the incentive and ask specific questions:
What do I need to do to defer taxes on some of the lump sum payment?
How will taking the retirement incentive affect the contribution Duke makes to a 403(b) account?
And, if someone declines the retirement incentive, will he or she be protected from layoffs?
"We can not eliminate that possibility" Cavanaugh said. "Layoffs are possible, but we are hoping to do things differently than our peer institutions, who have already implemented large scale layoffs. We have advocated working with voluntary efforts to reduce the workforce first."
The university offered the voluntary retirement incentive in October to 198 salaried (monthly-paid) staff members who met specific criteria. The incentive is one of many efforts to reduce expenses and close an estimated $125 million budget shortfall. The first retirement incentive directed to hourly-paid (biweekly) staff in Duke's pension plan drew nearly 300 participants.
"So far, the efforts we have put in place are doing what we want," Cavanaugh said. He explained that Duke's earlier retirement incentive to bi-weekly paid staff, curtailment of overtime, and the vacancy management process have already reduced the number of people working at Duke by approximately 400, which helps reduce the university's largest single budgetary expense — compensation costs.
Any employee who chooses to take the monthly retirement incentive will receive a lump sum equal to two weeks of pay for every year of service up to 26 years (the equivalent of one year's salary) and must retire on either Dec. 31 2009, or Jan. 29, 2010.
Sylvester Hackney, associate director of benefits administration, outlined some of the tax and retirement savings implications of taking a lump sum payment in 2009 or 2010, including how it affects Social Security taxes and 403(b) contribution limits. He urged employees to meet individually with retirement representatives and their own tax advisors to determine individual details.
"Everyone has their own set of circumstances," he said.
Individuals offered the Monthly Staff Retirement Incentive have until 5 p.m. Dec. 8 to enroll.
Employees considering taking the offer and retiring in December are encouraged to meet with benefits representatives by Nov. 22 so their paperwork can be completed on time.
Duke Human Resources will offer four other information sessions in November for monthly-paid employees who have been offered the retirement incentive. Cavanaugh hopes the sessions will all be equally well attended.
"Based on my conversations with individuals during and after the meeting, employees were genuinely appreciative of the opportunity to get answers to help them evaluate their individual situations," he said.
|
