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Retirement buyout updates

1/18/2021 update: After years of paying buy-outs to fired coaches like Mark Helfrich, you’d think our General Counsel’s office would have a clue. But, in response to complaints, they’re claiming they’ve just now identified “a tax compliant way” to split the payments:

NEW: Retirement Incentive may be split into two payments.

Based on feedback received from eligible employees and other stakeholders, HR requested UO legal counsel revisit the option of offering split payments to program participants. After further review, legal counsel was able to identify a tax compliant way to divide the payment over tax years 2021 and 2022.

When signing their formal Participant Agreement and Release, participating employees will be asked to indicate whether they would like to receive their incentive in one lump sum payment or split into two payments by choosing one of the following three options:

Option 1: The entire payment will be issued in one lump sum in July 2021.

Option 2: 50% of the total payment will be issued in July 2021 and the remaining 50% will be issued in February 2022.

Option 3: 25% of the total payment will be issued in July 2021 and the remaining 75% will be issued in February 2022.

11/23/2020 update: The second email from HR is below. No, JH hasn’t raised their offer yet.

I thought the HR staff’s video presentation was pretty helpful, although Director Mark Schmelz’s attempt to explain why UO wouldn’t split the payments over two tax years made no sense given that UO’s FY runs from July to June. Maybe it has something to do with our General Counsel’s demand that employees taking this offer first sign away their rights to everything?

g. Return of University property.  Employee agrees to return to the University any and all University property in Employee’s possession on or before the Resignation Date. [In the past Emeritii faculty have kept their computers, since they’e still writing letters for students, doing research, etc. Hard to do if UO has all your files.]

Age Discrimination Release:  Because Employee is over forty (40) years old, Employee has certain rights under federal law, including the Age Discrimination in Employment Act (ADEA) and the Older Workers Benefit Protection Act (OWBPA), and state law, including ORS 659A.030, all of which prohibit discrimination based on age. Employee acknowledges:

The release in this Agreement includes, but is not limited to any claims based upon age; …

Tenure Release:In exchange for the consideration of the mutual covenants set forth in this Agreement, Employee relinquishes tenure as of June 30, 2021. By participating in this 2021 Retirement Incentive, Employee agrees they are ineligible to participate in, and waive all rights related to participation in, the University’s Tenure Reduction Program (TRP).  TRP agreements executed after September 16, 2020 are null and void upon execution of this Agreement. 

Severability: This Agreement constitutes the entire agreement between the Parties, and there are no other understandings, oral or written, other than those stated herein. If any portion of this Agreement is determined to be unenforceable as a matter of law, the remaining portions of this Agreement shall remain in full force and effect.

[You had an agreement with your chair and dean? Forget about it.]

Jurisdiction and Amendment: Oregon law applies to any and all claims or disputes arising out of or relating to this Agreement and those disputes or claims shall be exclusively brought in courts located in Lane County Oregon (“Oregon Courts”).  The parties explicitly consent to the personal jurisdiction of the Oregon Courts. This Agreement can only be amended or modified by a writing signed by both Parties.

[Really? You give up your rights under Federal law? Is that enforceable?]

Attorney Fees: If either Party is required to enforce this Agreement, the prevailing party shall be entitled to reimbursement of attorney fees by the other Party.

[Huh? UO’s lawyers have already demanded that employees who take this deal give up all their rights. This suggests they’re worried that won’t hold up in court. So why all the pretense?]

The HR email:

From: Retirement Incentive <[email protected]>
Subject: UO 2021 Retirement Incentive Update — Info session recording, retirement planning webinars, and election deadline reminder
Date: November 23, 2020 at 5:22:05 PM PST

UO Information Session recording now available.
Human Resources held a virtual information session on Thursday, November 19. Topics included an overview of the Retirement Incentive Offer, process, and action steps, tools and resources available, as well as a Q&A session. 

A recording of the session is available on the HR website: View recorded session.

Retirement planning webinars scheduled for December.
As part of reviewing and evaluating the 2021 Retirement Incentive Offer, attend a retirement planning webinar or counseling session with a trusted advisor. A credentialed Financial Advisor can provide advice and insight to assist you as you estimate your retirement income and make retirement decisions. 

Refer to the HR website to view the webinar schedule and for information on consulting a financial advisor.

2021 Retirement Incentive election deadline is 5:00 p.m. on February 5, 2021.
After you review and evaluate the 2021 Retirement Incentive offer, your retirement income benefits, and healthcare coverage options, complete theretirement incentive election form if you wish to participate in the program. Election forms received after the deadline will not be accepted.

Support and Assistance
Please check the web resources often for the latest information and before reaching out to the HR project team. Many of your questions will be answered in these resources:Ø  2021 Retirement Incentive Offer guide

Ø  Frequently Asked Questions

HR is regularly making updates and changes as more information becomes available. If you are unable to find an answer in the web resources to your question, please email your question or concern to the HR project team at [email protected]. Please note that we are experiencing a high volume of emails currently and that we will respond to your inquiry as quickly as we can.

11/18/2020: UO offering retirement buyouts to faculty and OAs – if they sign away all rights

Apparently the email below went out to all eligible TT and Career faculty as well as OAs, on Monday. The email explains whose is eligible – basically age 62 by June 30 2021 and at least 15 years at UO. Keep in mind that I’m just an economist, not an accountant or financial planner or lawyer, and you would be wise not to use my thoughts below to make any decisions.

The employer’s goal with plans like this is to target highly paid employees who would otherwise keep working for many years, thereby cutting their costs by more than the buyout amount. The employer’s worry is that the people taking up the offer will tend to be those who would have retired anyway – meaning that the employer is giving them money for doing what they would have done anyway. (The economic term for them is inframarginal, as opposed to the marginal employees who retire earlier because of the incentive). This is why universities typically offer buyouts only to tenured faculty, who are giving up secure jobs and therefore need more compensation to persuade them to do so. It’s very unusual to see a university make the same proposal to career faculty and administrators.

My guess is that this plan will not encourage many people to retire earlier than they otherwise would have, and that most people taking this offer would have retired even without it, meaning that the net benefit to UO may well be negative, even when considering UO’s savings on PERS/ORP which they do not plan on passing on to the participants. This plan would have been more effective with faculty if it had been offered before the summer, before we’d paid the sunk costs of investing in converting our classes to online. I mean remote.

The buyout gives participants a year of salary plus $880 for each month between now and age 65 to help pay for their own health care, all as a lump-sum. ($880 is the current cost to UO of PEBB health insurance for a single person). I believe that this is all taxable (though perhaps you can shelter some in an IRA). The one-year income spike will mean the after-tax amount will be reduced by roughly 33% to 42% of the buyout.

This buyout payment will not increase people’s PERS salary or basic PERS benefit. For those faculty on the ORP, UO will not make any contributions to your ORP account from this buyout, which are currently about 33% of pay. UO plans to keep those savings – but of course by doing so they they make it less likely marginal faculty and staff will take the buyout offer.

Here are some more specific thoughts:

For Careers and OA’s, who are not eligible for the TRP, this plan is a gift to those already planning on retiring outright next year or staying on less than one additional year. Is it enough to persuade many of those planning to retire in say 3 years to retire now? I sort of doubt it, but those most worried about their job security may decide differently.

For TTF already planning to retire outright at the end of this academic year, this is again a great offer. If you were planning to retire this AY and then go on the TRP, which you could do for 5 years at 1/3 salary, keep in mind that, JUST like the buyout money, TRP pay does not count for PERS or produce ORP contributions, and most people on the TRP really only stay on it for about 3 years. They do get free PEBB insurance while teaching 0.5 FTE (and potentially summer). So net, ignoring your personal utility or disutility of teaching part time, the buyout is probably a modest financial loss relative to the TRP.

For those TT faculty currently planning on retiring outright but not until after another year or two or three of full time work after June 2021, the buyout makes less and less sense, and even less so for those planning on going on the TRP after a few more years full-time. This of course assumes that the faculty union will be able to keep the TRP in the upcoming contract negotiations.

For those on PERS Tier 1/2: Keep in mind that the buyout will not count to boost your highest 3 years pay or benefits. Additionally, under the Full Formula, your retirement income goes up by 1.67% (roughly) for every year you work and 1.67% of any increase in your highest three years salary. Additionally, you get about 4.5% of regular pay put into your IAP. This gives PERS faculty a modest additional incentive to take TRP over the buyout.

Corrections and other thoughts welcome. Maybe I should put all this into a spreadsheet?

Oh yeah, one more twist, from the FAQ:

Why do I have to sign a Participation Agreement and Release? Isn’t my election form sufficient?

UO has designed a formal Participation Agreement and Release, which details the terms of the participant’s voluntary retirement. Since part of UO’s overall objective this program is to manage financial liability, we have included in the Participation Agreement a waiver and release of any [emphasis added] possible claims against UO. We want this agreement to represent the full understanding between UO and the participant. A legally binding document is the best way to accomplish this.”

I’m a bit unclear on why a “full understanding” requires “a waiver and release of any possible claims” by the employee.

From: Retirement Incentive <[email protected]>
Subject: Your UO 2021 Retirement Incentive Offer- Action required by February 5, 2021
Date: November 16, 2020 at 2:52:57 PM PST

Dear []

The University of Oregon has packaged a voluntary retirement incentive offer to provide eligible employees an opportunity to retire sooner than they may have planned. You have been determined to meet the eligibility requirements, and I am pleased to extend to you a 2021 retirement incentive offer. This retirement incentive package offers a benefit to eligible employees while also providing opportunities for the university as we continue to navigate and respond to financial uncertainty. This offer is available to tenure-related faculty, career faculty, and officers of administration who are age 62 and older, have worked at the UO for 15 years or more, and meet all other eligibility requirements.

Through this one-time offer, you would elect to retire on June 30, 2021 and receive a lump sum incentive payment representing one year of compensation. A lump sum payment intended to provide funds for health insurance as a bridge to Medicare eligibility at age 65 will also be issued to participants under the age of 65. Total gross payments are capped at $250,000.

Your 2021 retirement incentive offer is: 

Ø  Estimated lump sum gross compensation-based payment: [one year salary]

Ø  Estimated lump sum gross healthcare bridge payment: [~$880 for each month you are from age 65]

Ø  Estimated lump sum total gross payment:  [redacted]

To receive this retirement incentive, you will need to:

Ø  Submit the Retirement Incentive Election Form no later than 5:00 p.m. on February 5, 2021. This election form is non-binding and sets in motion action steps to finalize the agreement.

Ø  Sign a formal Participant Agreement and Release with the university and relinquish your tenure, if applicable. Refer to the HR website for a complete overview of the terms included in the Participant Agreement and Release.

Ø  Retire from the UO effective June 30, 2021.

You are also invited to attend an information session this Thursday, November 19, from noon to 1:00 p.m. HR will provide an overview of the offer, process and action steps, and be available to answer your questions. Please use this Zoom link to join the meeting.

Action steps are detailed on the HR website with explanations, step-by-step guidance, and resources you will need to consider this offer. Please refer to the HR website for a complete overview of the offerprocess, timeline, and important dates, and frequently asked questions to help you better understand and evaluate the 2021 Retirement Incentive offer.

Please note:

Ø  Your retirement plan: ORP with TIAA, Tier 1
PERS members should request a retirement estimate immediately, if you are at all interested in the 2021 retirement incentive, as it can take 60 days or more to receive.

Ø  Submission of the Retirement Incentive Election Form is an important step that notifies HR that you are interested in pursuing this offer; signing of the formal Participant Agreement and Release will occur in winter 2021. There will be opportunities for you to withdraw your decision after submitting the election form, if you change your mind. Election forms will not be accepted after 5:00 p.m. on February 5, 2021.

I would like to add that this is your individual decision and does not require approval from a dean, department head, or supervisor. Please reach out to a member of my team by emailing [email protected] should you have any questions or need further assistance.

I appreciate you taking the time to seriously consider the 2021 retirement incentive offer, and I am hopeful that this unique opportunity could provide a path to retirement that may appeal to you. Thank you again for your time and consideration.

Best regards,

Mark Schmelz
Chief Human Resources Officer and Associate Vice President


  1. Dog 11/18/2020

    for TRP: each term you teach you get paid 1/2
    and you can teach 10 terms in a row

    So if your planning on extended TRP (primarily because
    of PEBB benefits being retained) then you should not accept this buyout offer

    As UOM says, this buyout offer really makes sense for TTF planning to retire this year and then just leave UO , Eugene,
    Oregon, USA, entirely – not sure there are many of those profiles out there.

    • uomatters Post author | 11/18/2020

      To be clear I haven’t seen the release and waiver of rights yet, so it’s premature to claim that our General Counsel’s Office is actually going to require that participants move out of state. Good point about the 0.5/0.33 TRP. I think most people do 0.33.

      • honest Uncle Bernie 11/19/2020

        What I’m hearing from some older colleagues is that they are oddly put off by this offer, that they had been looking forward to gradually riding off into the sunset as respected veterans, somewhat in a manner of their own choosing, but now the university just hoping to get rid of them with a fistful of dollars. Again somewhat oddly, some wishing they hadn’t been “offered” this “opportunity,” even though it is voluntary, because of the sour taste.

        I suppose it is yet another manifestation of the corporatization of academia, plus the instability of the present bizarre time we are in.

        Of course, UO always does things with utmost tact and empathy, and is well known for this.

        • Dog 11/19/2020

          As I have said several times before on this forum, and this “offer” is another manifestation — All us faculty are, in the eyes of JH, just items on a spread sheet. We have no intrinsic value to JH- all faculty are exactly the same, line items and this offer just reminds your colleagues of that reality

      • Anonymous 11/19/2020

        actually I don’t think most people now do 0.33 – they did in the past but that was awkward since they had to go off and on benefits – most people I know just do the straight 10 terms (or less)

  2. Not the Tax Man 11/19/2020

    Also a question to ask your accountant: what are the tax implications of taking a full year’s salary as a lump sum in addition to the two terms of employment? What does that do to you tax bracket for 2020 and how much would you actually net after taxes as compared to being compensated by TRP over time?

    • Dog 11/19/2020

      yes lump sums suck with respect to taxes – would be kinder if you just paid the following year as regular monthly salary …

    • Anas clypeata 11/19/2020

      Exactly. With two terms of pay from the first half of 2021, plus a full year of salary as a lump sum, plus $900 per month for a year or two also as a lump sum, you could easily be looking at nearly 2x your normal income in 2021. The income tax implications could be significant. The UO should offer to pay 40% of the lump sum in 2021, with the other 60% at the beginning of 2022; that would make the offer a lot more attractive, at no significant cost to the UO.

  3. Anas clypeata 11/19/2020

    I wonder if the faculty union has anything to say about this. Is this a compensation change that is subject to mandatory bargaining? My immediate (non-cynical) thought on why they didn’t offer this to classified staff is that they would run into union issues.

    • uomatters Post author | 11/19/2020

      The faculty union made a pretty fully developed buyout proposal last year, but bargaining shut down before the negotiations with the admin could get very far. Covid of course provided new reasons for faculty to want early retirement, and the admin has been saying since last winter that Brad Shelton was “running the numbers” on this new proposal. Of course Brad’s already got his own sweet retirement deal – $189K PERS plus $180K from UO for 0.67 FTE – so it’s understandable that this didn’t get his full attention. (#99 on the list of highest PERS payouts at
      I think the admins wanted UAUO to endorse his plan, but obviously that didn’t happen. I don’t know why SEIU was excluded – perhaps because they have one contract for all 7 universities?

  4. This Is The Way 11/19/2020

    Signing a waiver is very typical for these kinds of offers. Normal practice all over higher ed. We give you a lump sum, you agree not to sue us later.

    • uomatters Post author | 11/19/2020

      Really? No waiver is mentioned in the U of Colorado scheme – which gives up to 2 years salary:
      Cash Payment Taxable Retirement Incentive Program
      In exchange for the tenured faculty member’s agreement to immediately retire and relinquish his/her tenure rights, the Chancellor may agree to a retirement incentive that shall not exceed twice the faculty member’s base faculty salary at the time the agreement is executed. Such incentive payment shall take the form of a one-time, taxable cash payment to be paid on or after the retirement date, but no later than December 31 of the calendar year in which the retirement date occurs.
      The incentive agreement may include the opportunity to continue after retiring in a faculty teaching, research, and/or creative activities role as needed for a defined period of time at the discretion of the Chancellor in consultation with the Provost and Dean.
      Nor in the U of Chicago scheme: These were the first two I checkeck.

      • This Is The Way 11/19/2020

        Yes really. I have been very involved in early retirement incentives in four different university systems and when you get down to signing on the dotted line a “release of claims” is very common.

        • This Is The Way 11/19/2020

          Sorry for multiple boxes. In the Colorado example this is their normal phased retirement plan. Those usually never involve releases. These “one time” retirement incentives almost always include a release of claims so as to avoid future claims that people were forced out due to age. There is also a short period even after signing where someone can rescind. Any half skilled general counsel’s office will include a release of claims in one time retirement incentive plans. If they don’t they are nuts.

          • uomatters Post author | 11/19/2020

            Thanks, I was going to say that the Colo State agreement just talks about right to reemployment etc. I’ve asked Mark Schmelz at HR for a copy of UO’s waiver, I’ll post it when I get it.

            • This Is The Way 11/19/2020

              Yes a decent release of claims in this case will only talk about claims related to that employment. It shouldn’t make you give up intellectual property, etc. Typically what you do with these is an employee makes application, they get approved, you provide them with the agreement and give them a fixed time to look it over and you encourage them to have it reviewed by their attorney and anyone else they want. It’s a big decision and should be transparent to them. When they sign it they have a recision period of a few days to change their mind even after signing.

              • uomatters Post author | 11/19/2020

                Makes sense. Given that you have some expertise in this, I think my readers would be very interested in your overall take on this plan, and how it compares with others you’ve seen – keeping mind that UO’s TT faculty already have TRP and some generous retirement plans.

                • This Is The Way 11/20/2020

                  I’d have to take a longer look. These plans are pretty common in a budget crisis. You open a window, offer some sort of financial incentive or health insurance to entice people to jump. The trick is you have to really not replace the position. You have to encumber the cost in the first year. That includes the entire amount of any health insurance incentive.

                  People often ask why they don’t offer this for hourly employees. The reason is cost and typically they are going to replace the person. With wages being so compressed you can’t payout on the person exiting and hire another person for a lower salary. There is just no money to be saved in doing it. Universities typically have a fair amount of “one time” cash that came from salary savings from vacancies, etc. If you can use that one-time cash to avoid paying someone for 5-10 years more you save money. The analysis is almost always “Can we not replace this position if the person goes.”

                  From what I have seen the plan is pretty standard compared to others I have seen-a cash incentive along with some help with insurance. Often insitutions will just pay the insurance premium but it could be a nuance of PEBB.

                  It is distinct from tenure relinquishment or phased retirement plans that contemplate a slow drop in FTE until retirement.

                • Dog 11/20/2020

                  yes, indeed open a window in PLC and entice them to jump into the safety net below, which of course is invisible to normal faculty but fully there in eyes of the admins …

  5. charlie 11/19/2020

    Sorry if this was already answered, but if you sign this thing, you have no rights to your curriculum and on line content? Does the uni now have the capacity to use any of what you created through your years of classroom instruction for as long as they want, with no further compensation? Asking for a friend…

    • It's classified. 11/23/2020

      From listening to a speech by Provost Phillips recently, he sure made it sound like the UO machine will be able to co-opt and use online content, without any need for human peons in the future.

      My understanding too, is if you develop any IP while “on the clock” for the university, you better have ownership in writing from the university, if you don’t want them to have royalty-free rights to it.

  6. low cost buyout flight parh? 11/20/2020

    speaking of early departure — heard a rumor that a NTTF quit in mid-term recently in a large beginning class over an unhappy camper — anyone know anything about this? What did dept or admin do, both before and after takeoff? Is this a feature of “remote”?

  7. °°=~|~=°° 11/22/2020

    Not all senior TT profs are shining examples of continued research and excellent teaching. AHEM.

  8. Anonymous 11/23/2020

    I received this offer and am not interested. It’s a bad deal for me, though I realize it might make sense for some people. It seems a shame that so much effort and personnel resources are being devoted to roll-out and administration of it. I suppose this is common in corporations and universities, just surprised they would think they could tempt us with such an unattractive “offer”.

  9. honest Uncle Gangsta 11/24/2020

    Wow, they want the computers back from faculty who might continue to do research, write letters for students … They really have the warm touch! I’ll bet they’ll even keep asking for donations!

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