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Retirement Incentive Option (RIO) for Faculty and Academic Professional and Administrative Staff

Effective: May 2008
Last Updated: May 2008

Responsible University Officer:

Vice President, Human Resources

Policy Owner:

Director of Retirement Programs

Policy Contact:

See Contacts Section.

Policy Statement

The Retirement Incentive Option is an elected benefit program provided to faculty and academic professional and administrative (P&A) staff who meet the eligibility requirements as described.

Provisions and Terms

Scope

A. Eligibility Requirements

The faculty or academic professional and administrative staff member must actively be working in an eligible appointment of 75 percent time or greater and with an appointment term of nine months or greater on the last day of employment. The appointment type must not be one of the employee categories, classifications, or groups excluded from eligibility as described in the Exclusions section below. The employee must be currently enrolled in UPlan benefits and be receiving University subsidy for those benefits. Further, the employee must be eligible for retirement from the University, and, accordingly, must either be age 55 with five (5) Years of Service; age 50 with fifteen (15) Years of Service; or be any age with 30 Years of Service as well as be eligible to maintain participation in the UPlan, i.e., be able to maintain health coverage indefinitely with the University consistent with state law. Employees must meet these age and service requirements as of the earlier of a) their date of retirement or b) August 1, 2008.

B. Exclusions

Employees are ineligible for participation if they are:

certain term faculty (visiting or adjunct);
academic professional and administrative appointees with an appointment term of flexible hourly only, summer research only, lump sum only (Z) , or summer session only (S);
9755 Research Specialist, 9756 Community/Clinical Preceptor, 9757 Industrial Fellow;
hired for one semester without a search under non-competitive appointments;
95xx employees;
receiving federal health benefits;
not actively working or who are participating in the Academic Disability Program;
previous participants in a Retirement Incentive Option;
participating in the Phased Retirement Program, or who has signed a Terminal Agreement; or
terminated for cause.

Benefits

Under the program, the University will continue the medical and/or dental coverage in effect on the employee's last day of employment and pay the employer contribution for such coverage for a period of up to 36 months immediately following the last day of employment. The University's contribution for this coverage will be the same as if the employee had remained employed. The University's contribution will be based on the employee's coverage level (employee only, employee and spouse/same sex domestic partner, employee and child/children or employee and spouse/same sex domestic partner and child/children), work location and permanent residence as of the last day of employment.

Medical and/or dental coverage may be continued for up to 36 months immediately following termination of employment, but not after the employee becomes covered under a group medical plan (including the UPlan) that has no limitations or exclusions with respect to any pre-existing conditions of the employee or the employee's dependents. If the employee is a federal employee with federal health benefits, this program is not available through the University. If an employee, employee's spouse or registered same-sex domestic partner is age 65 or older, application must be made for Medicare Parts A and B. Medicare then becomes primary with the UPlan secondary for these individuals.

Dependent coverage may be added while the employee is covered by this program during open enrollment time or if there is a change in the employee's family status. The employee will bear the full cost of any additional coverage. If medical and/or dental coverages are canceled or dropped for any reason during the time that the University is contributing towards the coverages, including but not limited to cases where an employee does not make payments towards required contributions for coverages, then the University will not be responsible for any further compensation to or on behalf of the employee in connection with these coverages.

In any event, failure to pay the premium will result in termination of coverage. Once coverage has been terminated for any reason, voluntary or involuntary, the former employee and/or his dependents may not rejoin the UPlan.

At the end of the subsidy period, the employee may choose to continue coverages under the UPlan Retiree Group by paying the full cost of premiums. The employee is notified of this option, and any election to continue coverages must be timely. If the employee chooses not to continue coverages, the employee is not able to rejoin the UPlan Retiree Group in the future.

NOTE: The continuation of benefits coverage available under COBRA (Consolidated Omnibus Budget Reconciliation Act) runs concurrently with the benefits extended after your retirement date under the Retirement Incentive Option. Refer to the Benefits Information Supplement, Section II, for further information on COBRA.

Program Participation

If an employee elects to participate in the Retirement Incentive Option, application must be made prior to August 1, 2008 or no later than the effective date of retirement, whichever occurs first. In all events, eligible employees shall have 45 calendar days to consider the program. The employee's date of retirement will be determined through mutual agreement of the employee and his or her college, campus or administrative unit, following approval procedures specified by the unit. In no event, however, will the date of retirement be after the last day of the employee's appointment term, as indicated below:

Appointment Term	Latest Retirement Date
A, D, DF	June 5, 2009
B, BJ, K	May 22, 2009
E	May 29, 2009
G, L	May 8, 2009
M	June 19, 2009
R	May 15, 2009
X	June 12, 2009

An employee who is on a short work break (e.g. the summer months for an employee on a 9-month appointment) may not schedule his or her retirement date during the break. Retirement dates must occur during the course of an employee's regular appointment. Any P&A employee who has received a non-renewal notice and has elected to work until the end of the notice period must retire prior to the last day of such notice period to be eligible for the program.

Employees may elect to designate another Claims Administrator in the 60 days immediately preceding the effective date of retirement.

In exchange for participating in this program, the employee releases all potential claims against the University. Fifteen days after execution of this Release, this program is irrevocable and may only be modified with mutual consent of the employee and University. The employee may, however, rescind the Release agreeing to participate in this program within 15 calendar days following his or her execution of the Release. Such rescission, as specifically provided for in the Release, must be made in writing and forwarded to Employee Benefits within the 15-day period. Any employee who rescinds a Release forfeits any benefit to the program; however, such employee's termination remains irrevocable. An employee who rescinds a Release is not entitled to and will not be provided employment at the University of Minnesota.

An employee may not resume employment at the University of Minnesota for a minimum of 3 months following the date of retirement. Beginning on the fourth month after retirement, the employee may return to University employment in a position with no more than 19.5 hours per week (49% work effort). These positions are compensation-only positions; that is, they are not eligible for University benefits. No other reemployment is permitted.

Reason for Policy

The University chooses to recognize years of service to the University of Minnesota by eligible faculty and academic professional and administrative staff and to encourage voluntary departures from University employment.

Procedures

In support of this policy, the following procedures are included:

Electing the Retirement Incentive Option

Forms/Instructions

In support of this policy, the following forms are included:

Additional Contacts

Subject	Contact	Phone	Fax/E-mail
Employee Benefits - For questions on how the program works or to discuss personal situations	Employee Benefits Service Center	612-624-9090 or 800-756-2363, option 2
General Information or Procedural Assistance	Primary: Responsible administrator/supervisor
	Secondary: Local campus, college or administrative unit HR administrator
	Other (as needed): Office of Human Resources specialist or consultant	Office of Human Resources Specialist and Consultant List	Office of Human Resources Specialist and Consultant List
Document Processing	HRMS Key Contact	HRMS Key Contact List (pdf)	HRMS Key Contact List (pdf)
Document Processing	Employee Benefits Service Center	612-624-9090 or 800-756-2363, option 2

Definitions

Year of Service: Year of Service shall mean a 12-month period in which the employee worked an average of a 67 percent time appointment at the University of Minnesota. Years of service need not be continuous.

Responsibilities

College, Campus or Administrative Unit

Provide Faculty and Academic Professional and Administrative Staff Retirement Incentive Option materials to eligible employees.
Enter appropriate data into the HRMS system.
Ensure that requests to fill vacancies created by those employees selecting the Retirement Incentive Option program are approved by the offices of the appropriate senior vice president, vice president, or chancellor.

Employee

Timely notify the division/department of choice to accept the terms of the Faculty and Academic Professional and Administrative Staff Retirement Incentive Option.
Follow appropriate procedures.

Appendices

There are no appendices associated with this policy.

Frequently Asked Questions

In calculating the final year of service, if average percentage is over 67%, does the employee need to be employed on the anniversary date to count?: Yes, even if the employee has worked over 67 percent time in the final year, the employee must be employed on the anniversary date to count as a year of service.
Can an employee add family coverage while the University is subsidizing coverage after employment ends?: Yes, family coverage can be added, but the employee would pay the entire cost of the added family coverage.
Is there an open enrollment period for former employees?: Yes, former employees will receive open enrollment materials from Employee Benefits with information on options.
What is the cost to the department or unit?: The cost of the medical and dental benefits will be charged to the fringe pool and included as part of the total cost used in determining the annual fringe rate.
What happens to the former employee's medical and dental coverages when the University stops contributing to the premiums?: By meeting the criteria for retirement with the University, the former employee is entitled to continue medical and dental insurance in the UPlan Retiree Group indefinitely by paying the full cost without University subsidy. Prior to the end of the subsidy period, the former employee should contact Employee Benefits to discuss benefit options. If the former employee chooses not to continue coverages, then they will not be able to rejoin the UPlan Retiree Group in the future.
If employees choose to participate in the Retirement Incentive Option, can they come back to work at a later time?: Yes. An employee may not resume employment at the University of Minnesota for a minimum of 3 months following the date of retirement. Beginning on the fourth month after retirement, the employee may return to University employment in a position with no more than 19.5 hours per week (49% work effort). These positions are compensation-only positions; that is, they are not eligible for University benefits. No other reemployment is permitted.
How is the University contribution determined?: The University contribution is based on the employee's coverage level (employee only, employee and spouse/same sex domestic partner, employee and child/children or employee and spouse/same sex domestic partner and child/children), work location and permanent residence on the last day of employment.
What happens if I die before the end of my subsidy period?: If you die before the end of your 36-month subsidy and you had family coverage at the time of your retirement, your surviving spouse/registered same-sex domestic partner and/or dependents will continue to receive the subsidy through the end of your 36-month period. When the subsidy ends, your surviving spouse/registered same-sex domestic partner and/or dependents would be eligible to join the UPlan Retiree Group by paying the full cost without University subsidy.
Do I have to apply for Medicare Parts A and B?: Yes. If you are age 65 or older, or turn 65 during your subsidy period, you must apply for Medicare Parts A and B. If your spouse or registered same-sex domestic partner is age 65 or older, or turns 65 during the subsidy period, she or he must apply for Medicare Parts A and B as well. Once eligible, Medicare pays benefits first (“primary coverage”) and the UPlan pays benefits after Medicare (“secondary coverage”) for you, your spouse, or your registered same-sex domestic partner.

Related Information

Retirement Incentive Option for Faculty and Academic Professional & Administrative Staff Benefits Information Supplement (pdf)

History

Originally Adopted:: April 2003
Program Discontinued:: July 7, 2003
Program Reinstated:: May 2008 (minor modifications)

What's Inside

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