Phased retirement is a less abrupt way to transition in retirement. Find out how this union negotiated benefit works.
A Less Abrupt Way to Transition
Three years ago, the first participants signed up for CUNY’s pilot program on phased retirement. Both the PSC and CUNY recognized that while a large number of instructional staff members had reached retirement age, many were not sure they wanted to stop working completely. Offered at a number of universities around the country, phased retirement, or a reduced workload for reduced pay, provides a way to move less abruptly to retirement.
When the union and the university began to discuss how such a program could work at CUNY, a number of necessary constraints became obvious. First, it could only work for full-time employees who have a defined annual workload and clear expectation of employment over the phasing period. CUNY offered a program with 50 percent pay in return for a 50 percent workload over one, two or three years, with full health coverage and pension contributions based on the reduced pay, if the employee is at least 65 years old and makes an irrevocable commitment to retire at the end of the phasing period.
Members of the NYC Teachers Retirement System (TRS), a defined benefit program, are not eligible for phased retirement. Reducing pay for employees covered by TRS would reduce their long-term retirement benefit, which is based on salary during the final years of employment, an unacceptable effect. While the parties continue to explore whether there is enough flexibility in the pension law to permit TRS members to participate in phased retirement, the program has been limited to full-timers who are members of the Optional Retirement Program defined benefit plans, mostly TIAA-CREF.
The university initially proposed that the plan apply only to faculty but, in response to union pressure, ultimately agreed to include professional staff with a different phasing formula, a 20 percent work reduction (one day per week) for 80 percent pay, for a semester or a year.
The resulting agreement on the pilot program for phased retirement covers a significant number of issues, because, as the parties reviewed the elements of faculty members’ workloads, they realized that offering clarity from the beginning about what a reduced workload means was important. For example, workload is not defined by teaching load alone, but also includes all departmental responsibilities. It was agreed that the 50 percent workload could be achieved in one semester of an academic year, not only across both semesters.
Of primary importance is an agreement between the faculty member and his or her chair about what constitutes the 50 percent workload and how it should be scheduled over the phasing period. Professional staff members work out a schedule with their director. Employees on phased retirement will continue to be eligible for their full Travia Leave, at full (100 percent) pay, at the end of the “phasing” period. This agreement is reflected in the phased retirement application that must be submitted to the college human resources office and subject to approval by the college president
The agreement also covers issues such as:
- “phasing” employees will accrue temporary disability (sick) leave on a pro-rata (50 percent or 80 percent) basis;
- “phasing” employees will continue to receive movements in salary schedule and any applicable contractual salary increases during the phasing period;
- a faculty member cannot “phase” while serving as department chair;
- “phasing” faculty members retain full departmental voting rights, except while on Travia Leave.
A copy of the full agreement is available online. During the pilot program, 15 to 20 instructional staff members per year, primarily faculty, have opted for phased retirement. While this is the final year of the pilot program, both union and management have expressed a commitment to working out a permanent plan. Those wishing to start phased retirement in Fall 2016 must propose and work out a “phasing” plan with their department chair and submit an application to their college human resources office by November 15, 2015.
If your department chair or the college president does not approve your proposed schedule for working 50 percent, you can either work out a different schedule or wait a year, when they must accept your proposal. You can “phase” for fewer years than your original plan calls for, as long as you notify your department chair and HR office, but you cannot extend your phasing period. Application forms are available from your college HR office.