Retirement incentives to save universities millions

I have to say that I am tempted to flaunt my “I told you so” banner at the moment.  At one of APSCUF’s Legislative Assembly meetings last year, I made a case both on the floor of the Assembly and privately with some of our union’s leadership that we were going to get hammered if we rejected the retirement incentive package.  Pithy acronym’s (R.I.P.) notwithstanding, the argument from the State’s side was plain as day from my vantage point.  And, sure enough, in today’s Patriot-News we see a version of what I said on the Assembly floor.  Here’s a peek:

Contributing to the system’s financial challenges are anticipated pension and health benefits cost increases and the loss of $38.2 million in federal stimulus money the system is receiving this year.

The savings achieved from the retirement incentive would have been significantly more had the system’s faculty and coaches union agreed to participate in the program.

The union, which represents about 7,000 employees, opted not to agree to it after the system rejected its offer to link the incentive with a two-year contract extension that included pay raises.

Can you see where this is going? Let’s try: “maybe there would have been no retrenchment if APSCUF would have agreed to the retirement incentive;” or, “maybe tuition would not have had to gone up so much if APSCUF would have agreed to the retirement incentive;” or “maybe _______ if APSCUF would have agreed to the retirement incentive.”  Blame the faculty for the budget crisis.  That’s always PASSHE’s game plan.  And here we are–regardless of some of the reasons why APSCUF thought it was a bad idea.

I do have to say, however, that APSCUF President Hicks did a decent job of not simply digging in his heels and defending the union’s decision.  He opened up the possibility for returning to the retirement incentive program as part of negotiations:

given the large savings that a faculty retirement incentive could produce to help with next year’s revenue shortfall, Hicks said he wouldn’t be surprised if it resurfaced in the upcoming round of contract talks.

We’ll see.  Here’s a link to the full article:

Retirement incentives to save universities millions – PennLive.com.

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debate over retirement incentives continues

Here is the latest round of back-and-forth regarding the retirement incentives for APSCUF faculty.  You’ll recall that APSCUF was the only one of the PASSHE unions to not jump at PASSHE’s offer.  Here’s an article from yesterday’s Patriot News:

State System of Higher Education refuses talks over retiree buyouts

By JAN MURPHY, The Patriot-News

April 11, 2010, 9:33PM

Seeking to cut costs, the State System of Higher Education is offering its unions financial incentives for some members to retire, and all but one union has accepted.

Five labor unions at the 14 state universities have accepted the offer that pays those who qualify as much $30,000 to leave this summer.

However, the leader of the faculty union has rejected the incentive. Steve Hicks, president of the Association of Pennsylvania State College and University Faculties, said he wants to pursue talks with system officials in hopes of finding a deal both can accept.

Ken Jarin, chairman of the state system’s board of directors, said he had no interest in discussing the matter with the faculty union.

“We made our proposal and every other union agreed to it and APSCUF chose not to. We’re disappointed by that,” Jarin said after Thursday’s meeting of the state system’s board.

The system, which serves 117,000 students, faces serious financial challenges, including an anticipated spike in costs for pension systems and the eventual disappearance of federal stimulus money.

The system includes Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock and West Chester universities.

Kutztown University has already begun discussing faculty layoffs, and faculty anticipate other system universities will soon follow suit.

Hicks said the union, which represents 7,000 faculty and coaches, turned down the retirement incentive because it worries about the rising workload for the teachers who stay on.

He said the union thought it was worthwhile to pursue financial security for its members not eligible to retire, since no assurances were given about replacements or position transfers. So it sought a two-year extension to its contract, which expires June 30, 2011.

System officials showed no interest. They said the retirement incentive was a standalone offer.

System officials said the five unions that accepted the retirement incentive could produce several million dollars in savings if all 400 of their eligible employees took it.

Hicks said the savings that the system stood to derive from the faculty and coaches’ union accepting the offer could amount to as much as $35 million. He compared that to the $4 million that he said it costs for every 1 percent increase in faculty salaries.

The union’s contract extension offer sought 3 percent across-the-board increases, plus the 2.5 and 5 percent step increases for eligible faculty for 2011-12 and 2012-13.

Hicks said the two sides have the rest of this month to negotiate and still leave a 60-day window for possible retirees to decide by the end of June.

“So, let’s have that conversation and see if we can reach something of mutual benefit,” Hicks said.

Jarin emphatically refused.

“We’ll deal with the circumstances as we see them including whatever economic situation we’re in at the time,” he said.

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Philly Business Journal: PASSHE Approves Retirement Incentive

If this story is correct, the retirement incentive program is on.  Waiting word from our state APSCUF in response.:

PASSHE state schools offering retirement incentives up to $30,000

Philadelphia Business Journal – by Peter Key Staff Writer
Friday, March 19, 2010, 4:30pm EDT

The Pennsylvania State System of Higher Education said Friday its board of governors has approved a voluntary retirement incentive program as part of a cost-cutting effort.

The incentive will be available to full-time, permanent employees if they are 60 or older or have worked for the system for 35 years and have permanent paid health insurance.

“It’s [for] people who are already eligible to retire but haven’t,” said Kenn Marshall, a system spokesman.

The system includes West Chester and Cheyney universities in the Philadelphia area and 12 other universities throughout Pennsylvania. Marshall said it employs about 12,000, of whom 400 are eligible for the incentive, which is a one-time payment ranging from $6,000 to $30,000, depending on how long the person has worked for the system.

“The hope is this will produce several million dollars in savings over the next couple of years,” he said.

Eligible system employees will have from March 29 through May 28 to decide whether to accept the incentive.

The system is finalizing agreements to authorize the incentive with five labor unions that represent its workers. Nonunion employees also will be eligible for the incentive.

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APSCUF President Steve Hicks message regarding retirement package

A few weeks ago, in those days before the retrenchment announcements by President Cevallos, there was much discussion about a rumored “Retirement Incentive Package” being considered by PASSHE.  APSCUF was scheduled to meet with the Chancellor’s office on February 12th to negotiate over this one issue.  As you may recall, we got a hold of an email from the Chancellor following that meeting that stated that the talks had broken down and that PASSHE was not going to offer the incentive.  Not only was it a surprise that the talks had broken down, it was even more disturbing that what the Chancellor represented in the email as APSCUF’s position, bore little or no resemblance to what happened.

In any case, today APSCUF President, Steve Hicks released a review of what has happened regarding the Retirement Incentive Package.  And the timeline could not be more serious, as PASSHE issued this Friday, March 19th as its self-imposed deadline for offering the package.  Here’s what Hicks released to faculty:

Hicks’s 3/18/10 Memo Concerning Retirement Package

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APSCUF President Steve Hicks responds

Hey all…I am reposting APSCUF President Steve Hicks comment to my previous post because I want to make sure everyone sees it.  This is critical folks.  Here’s Hicks’s comment:

Kevin,

Since you asked for my comments, here they are –

Your first respondent is right about what happened: having alerted the Chancellor’s office that we wanted to talk about an extension in conjunction with the retirement plan, we got to the table on the 12th, did as we should and presented them with a proposal (& it didn’t include 3 years, that is just factually inaccurate), and were told they didn’t have the authority to respond. (The notion that we walked out or didn’t return because we were holding out for 3 years is ludicrous — they never even responded to our initial proposal)

We did not return to the table because they still have not indicated they will (or have the authority) to respond to our proposal; as the Chancellor’s email says, the BoG executive committee “said no to an extension.”

As you know, there was no impetus at Legislative Assembly, or anywhere else (EC or Negotiations Committee) to sign off on just a retirement side letter; everyone agreed it was retirement plus something for everyone.

They want us to come back to the table just talk about the retirement side letter.

We will go back when the talks are broader.

It’s early days — the first meeting was 12 days ago. Let’s see how this plays out.

And you’ll have to ask the Chancellor to comment on his own email and what he’s up to in it; I voiced my dismay in person.

Best,

Steve

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retirement incentive?!? retrenchment?!?

OK.  I need to preface this post.  The full story of what I’m posting below has not been established yet.  However, I think you’ll see why I’m posting it.  Please read knowing that I cannot absolutely confirm this is actually what happened at last weeks negotiations regarding the potential of a retirement incentive.

In any case, we got our hands on an email sent by PASSHE Chancellor Cavanaugh regarding the talks with APSCUF about the retirement incentive.  We do not know all of the people who actually received this email.  In any case, here’s the piece of the email that was sent to us:

—— Forwarded Message

I want to apprise you of a few things as a heads up.

•        APSCUF has decided to not participate any further in the negotiations regarding the voluntary retirement incentive program because they want it linked to a 3-year contract extension with significant pay increases and a new step. The BOG Executive Committee said no to the extension, and we agree. We have told them that they are welcome to come back to the table before the window closes. Negotiations with the other unions and plans for management will continue.

•        We are adding the topic “Retrenchment” to the statewide meet and Discuss agenda next week. We will tell APSCUF that we are beginning to plan for retrenchment as a financial issue due to budget pressures. We will be talking with you in more detail about the various ways this can play out across the campuses. However, we need to put this item on the table with the union now.

•        Discussions and planning regarding low enrolled programs continues. Information to that effect has been sent this week to your CAO and a copy to you.

We will stay in touch.

John

John C. Cavanaugh, Ph.D., Chancellor
Pennsylvania State System of Higher Education
Dixon University Center
2986 N. Second Street
Harrisburg, PA 17110

t: (717) 720-4010
f: (717) 720-4011
e: jcavanaugh@passhe.edu
w: http://www.passhe.edu

P As part of PASSHE’s Green Technology Initiative, save a tree. Print only when necessary.

From: Westhafer, Bonnie
Sent: Wednesday, February 17, 2010 12:50 PM
To: DUC – Chief Academic Officers
Cc: DUC – Presidents
Subject: Lower Enrolled Program Procedures

Transmitted on Behalf of Dr. Jim Moran

Colleagues:

Attached are the revised plan of action for addressing lower enrolled programs and the current list of programs under consideration. Some notations regarding programs (e.g., in moratorium) reflect status as of November 1, 2009 and not subsequent to that date.  If this information is incorrect please let us know. This information is to be distributed to APSCUF for the February 26 statewide M&D meeting.

This is is the whole of what I have in my possession.  There is a ton to say about this email.  Let me try to point to a couple of things before I have to go to a meeting.

Retirement Incentive:

The Chancellor’s email states: “APSCUF has decided to not participate any further in the negotiations regarding the voluntary retirement incentive program because they want it linked to a 3-year contract extension with significant pay increases and a new step.”  I DO NOT know if this is accurate.  However, if it is we have some serious problems.  The most pressing problem being that at the last Legislative Assembly there was no discussion of a 3 year extension.  And I know for a FACT that at three year contract extension wasNOT a demand of the Chapter Presidents–and it was ABSOLUTELY CLEAR that Assembly did not tell APSCUF to walk away from the table if PASSHE didn’t agree to a 3 year contract extension.  And I know for a FACT that a 3 year extension of the contract was NEVER discussed on the floor of Legislative Assembly.  If it is true that discussions around a retirement incentive broke down because APSCUF refused to budge from a 3 year contract extension, then I have some SERIOUS questions for the APSCUF State APSCUF president about what the hell happened.  If the Chancellor misrepresented what happened, then there are some serious questions about just what the hell he is trying to pull over here.

Retrenchment:

There it is folks: PASSHE is putting a retrenchment plan together for this Friday’s State Meet and Discuss.  We don’t know what the plan is or how it will affect Kutztown in particular.

I hate to do this, but I have got to get to a meeting…I wanted to get this little nugget out ASAP. More to come.

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updates from Legislative Assembly

Hey all,

I just wanted to let you know that I’ve posted two updates to the APSCUF-KU Delegates blog:

• LA update: two motions introduced by KU/Mahoney
• LA update: retirement

Let me know if you have any questions!

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