New Phased Retirement Program helps employees ease into retirement
A new Phased Retirement Program that allows employees who are 55 or older to transition into retirement is now available.
This voluntary program lets staff members reduce their work hours by at least 10 percent a year for up to three years before retiring. Participants will receive a lump sum cash payment upon retirement that is equal to half the amount of the reduction in time.
If you think you might be interested in participating, you can find full program details at: http://atyourservice.ucop.edu/employees/policies_employee_labor_relations/phased-retirement/index.html. The next step is to talk to your department about whether participation is an option for you.
UC is offering Phased Retirement to pave the way for longer term planning for employees, their families and their departments. Departments will be able to better evaluate their needs and plan for transferring an employee’s responsibilities before retirement. The program also creates the potential for cost savings while offering employees a cash incentive.
To be eligible, you must have at least five years of service credit and work at least 60 percent time. You can participate for as little as 120 days to as much as three years, reducing your appointment by at least 10 percent when you enroll. Employees who participate in the program for more than a year must reduce their time by an additional 10 percent or more in successive years. When you finish the program, you retire and receive the incentive payment within 30 days.
Here’s an example of how the program works: if you’re a full-time employee earning $50,000 a year and you reduce your work hours by 10 percent, your annual salary would be $45,000 and your appointment rate would be 90 percent. Your one-time incentive payment upon retirement would be $2,500, which is half the amount you would have earned otherwise.
If you stay in the program and reduce your appointment the next year by an additional 20 percent, your annual salary would be $35,000, your appointment rate would be 70 percent and the payment would be $7,500.
Please keep in mind that you forfeit the incentive if you enroll and decide later you don’t want to retire or don’t want to reduce your appointment by at least 10 percent a year.
Senior Management Group members and faculty are not eligible. For represented employees, the program is subject to collective bargaining.
Some of your employee benefits won’t change if you sign up. For example, eligibility for medical benefits won’t change as long as you work at least 17.5 hours a week. Other benefits will be affected because your salary or appointment rate would be less. You would earn less service credit toward the UC Retirement Plan and your retirement income might be reduced depending on your situation.
If you have additional questions about the program, please contact Human Resources.