Staff Voluntary Early Retirement Program Frequently Asked Questions

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1 Staff Voluntary Early Retirement Program Frequently Asked Questions Q1. How often will I get paid my severance? A1. Severance payments will be paid after the retirement day and on the regular University payroll cycle you were on as an employee either monthly or biweekly. Q2. Can I select a date other than June 30, 2017 to retire? A2. No. If you are eligible for the SVERP, you must decide by the April 28, 2017 deadline if you are going to participate based on a June 30, 2017 retirement date. The University may extend the retirement date up to 18 months for a few employees based on operational, academic and student needs. Otherwise, the normal retirement date under the SVERP will be June 30, Q3. Will I also receive an extra month of retirement since I am a retiree and normal retirees receive an extra month of compensation? A3. No. The SVERP is a voluntary early retirement program available to staff who meet the program criteria. There is no obligation by any staff member to take the SVERP. Those staff who are approved to participate in the SVERP will receive 9 months of compensation at 100% of their current salary paid in equal installments during the regular payroll cycle over the 9-month period following the retirement date. However, they will not receive an extra month like those who retire outside of the SVERP. If a staff member chooses to retire outside of the SVERP, they would receive the one-month retirement payment. Q4. I am right on the cusp of a couple of the requirements, but I am interested in possibly retiring early. I will have been at JCU for more than 9 years, but less than 10. I also won t be 55 years old until after May 31, Is there any way I can take advantage of the early retirement or are these criteria non-negotiable? A4. No. The eligibility parameters of the Staff Voluntary Early Retirement Program cannot be modified. To be eligible for participation in the SVERP, a staff employee must meet ALL of the following criteria: 1. The employee must be a full-time staff employee as of March 27, 2017; and 1

2 2. The employee must be a minimum age of 52 years by May 31, 2017; and 3. The employee must have at least ten (10) years of total service at John Carroll University by May 31, 2017; and 4. The combination of the employee s age and total years of service as determined in items 2 and 3 above must be equal to or greater than the number 65 by May 31, 2017; and 5. The employee cannot have already retired, provided notice to the University of their retirement, or signed a retirement or separation agreement prior to March 27, 2017; and 6. The employee cannot have salary that is primarily supported by external grant funding. Q5. If I retire under the SVERP, can I work part-time beyond the designated June 30, 2017 date as long as I retire before December 31, 2018? A5. No. If you participate in the SVERP, you would work until your designated retirement date. The normal SVERP retirement date is June 30, 2017 unless the University otherwise extends that date due to operational and student needs. You would not be eligible to work in a full- or part-time status for 9 consecutive months after your retire. However, you would be eligible to apply for available positions at John Carroll University 9 months after your designated SVERP retirement date. Please note that retirees who later apply for positions at the University would be reviewed for positions as any other applicant and are not given any preference to be rehired with the University. Q6. Can I work at John Carroll after participating in SVERP program? A6. If you retire under the SVERP, you are eligible to apply for available positions at John Carroll University 9 months after your designated SVERP retirement date. Q7. If I take the SVERP, can I choose to be paid my severance in a lump sum in the pay period following my retirement date? A7. No. All SVERP participants will receive their severance in equal installments over a 9-month period during the regular pay cycle and consistent with regular payroll practices. 2

3 Q8. If I take the SVERP and subsequently find a job outside the University within the severance period, am I still paid my severance and will my dependents and I continue to be eligible for the Tuition Waiver program? A8. Yes. You will receive your full severance and remain eligible for the Tuition Waiver program consistent with the Tuition Waiver and Exchange Programs Policy if you accept another job at any time after your retire in the SVERP. Please note tuition waiver and exchange benefits are subject to change by the University for all employees and retirees. Q9. Will graduate tuition be covered for my dependents if I choose to retire? A9. Yes, graduate tuition will be covered at John Carroll University consistent with the Tuition Waiver and Exchange Programs Policy, but the tuition benefit is subject to taxation. If taxable, you will receive a 1099 at the end of each year you and/or your dependent take graduate courses. Staff employees should consult their tax advisors for the most recent information about taxability of tuition waivers. Q10. If I decide to participate in the SVERP and am currently enrolled in a Flexible Spending Account, will it continue through my severance period? A10. There will be no FSA deductions made from severance payments. However, you will have a final deduction from your last pay made as an employee in the normal amount. If you have a balance in the account at that time, you would have the following options: 1. Be able to submit claims (within 90 days of your retirement date) for eligible services rendered prior to your retirement date, or 2. You could elect COBRA, continue making normal monthly payments and maintain access to the balance in your account on a month-to-month basis until the end of the year in which you retire. Q11. If I were to pass away after my retirement date, would my spouse or heirs receive the remaining severance amount? A11. If you pass away after your retirement date, your spouse or heirs would receive the rest of the payments in your retirement agreement. If you pass away before your retirement date, your spouse or heirs would not receive the payments in your retirement agreement but would be eligible for insurance benefits provided to "regular" employees. 3

4 Q12. Will John Carroll cover 100% of the medical premium during the nine months after the retirement date? A12. Yes, 100% of the medical premium will be paid by JCU for the 9 months after the retirement date. If you are currently paying a spousal surcharge, you will no longer be charged this fee during the severance period. Deductibles and co-pays remain the responsibility of the retiree. Q13. Will the Optum Rx program still be available? A13. Yes, you will remain enrolled in the prescription drug program as long as your medical coverage continues. Q14. If I am eligible for Medicare at anytime during the severance period, how would that work with my JCU plan? A14. If you and your spouse/covered dependents are age 65 or older at the time of retirement, are enrolled in the University medical plan as of the retirement date, and choose to continue medical coverage during the 9-month period, you will be required to be enrolled in Medicare Parts A & B to continue medical coverage under the University s Supplemental Retiree Medical Plan (Medicare Eligible). Further, if you and/or your spouse/covered dependents reach the age of 65 during the 9 months of medical coverage continuation, you will be required to enroll in Medicare Parts A & B by the beginning of your or your dependent s birthday month. Q15. Will Dental and Vision coverage premiums be covered by JCU? A15. No, but you can elect to continue your dental and/or vision coverage in JCU s group plan as a retiree. Q16. Will I still be enrolled in Long Term Disability? A16. No, for those who elected long-term disability coverage as an employee, this term coverage ends when you leave the University. It cannot be continued individually by employees upon retirement. Q17. Is there a possibility you might get denied from the SVERP? A17. Although this is very unlikely, if an overwhelming number of eligible employees elect to participate in the SVERP, and in particular an overwhelming number in a particular division or area, some may be denied due to the obligation the 4

5 University has to meet operational and student needs. Q18. When will we find out what our actual retirement date will be? A18. Upon approval to participate, your retirement date will be communicated to you in the Notice of Participation, which will be provided to you on May 12, For most individuals, the retirement date will be June 30, Q19. Will unused vacation be paid out? A19. Yes. 100% of all of your accrued but unused vacation will be paid out in full with your last regular paycheck. Q20. Will the vacation days that carried over from 2016 be paid out? A20. No, carryover days must be used by May 31, 2017 or they will be forfeited and not paid out. Q21. Will TIAA contributions be made by JCU during the nine-month severance period? A21. No, contributions will end on your retirement date, just like any other employee who retires from the University. Q22. Can I make contributions to TIAA from the severance payments provided to me during the nine-month severance period? A22. No. Contributions to the University retirement plan are not permitted to be made by the University directly from your severance payments. However, you may be able to make post-tax contributions to an individual IRA. You should speak with your financial advisor and/or a TIAA representative about the options available to you. Several special TIAA retirement sessions will be arranged for April. Q23. If I were to be rehired by JCU, would my benefits start over for vacation, life and retirement? A23. Yes, as with any break in service, your benefit accruals would start over, and the benefit accrual rates would be the same as those applicable to any newly hired employee. 5

6 Q24. Would sick days be paid out? A24. No, consistent with our long-existing policy and like most organizations, sick time is offered as a vehicle to provide employees with paid time off that is medically necessary due to a bona fide illness or injury. Any unused sick days are not paid out after any employee exits the University. Q25. What will the severance be for the involuntary staff cuts? A25. At this point, that is not known. The University will need to assess the outcome of the SVERP before an involuntary separation program and severance package can be determined. However, benefits under the SVERP will be more generous than the benefits provided to staff employees subject to involuntary separation as part of a University-wide restructuring and elimination of positions. For example, any severance pay related to involuntary separations will be based on years of service, with a cap on total severance, and the University will not subsidize the cost of continuation of medical benefits. In addition, tuition waiver and eligibility for tuition exchange benefits generally will not be as generous under an involuntary separation. Q26. When will supervisors be told if one of their direct reports chooses to participate in the SVERP? A26. Supervisors will notified after employees have submitted election forms for participation in the SVERP. Supervisors will have an opportunity to provide input about the determination on the elections and the selected retirement date through their Divisional Vice President. Q27. If I elect to take cash in lieu of medical coverage, will the amount be paid in one lump sum? A27. No. The cash will be added to the severance payments amount in equal payments for the duration of the severance period and will be subject to usual payroll and employment tax withholdings. Q28. Will I have access to my JCU address as a normal retiree if I take the SVERP? A28. All retirees will continue to have access to a University account. While it has been our past practice to allow retirees to retain their current account, this practice is currently being reviewed. The practice may be modified so all retirees receive a new JCU address. This would 6

7 provide retirees with access to a University account and University announcements. Q29. Will I be able to purchase COBRA at the end of my severance period. A29. You will be able to elect medical coverage through our retiree plan, which is 100% paid for by you. As required by law, you will be offered COBRA on your retirement date for medical, dental, vision and flexible spending (if you have any of these coverages as of your retirement date). Generally, retirees who want to continue medical coverage after the retirement date will continue coverage on the retiree medical plan, not on COBRA. If employees wish to continue dental or vision coverage, they would elect to do so via the retiree medical plan and pay 100% of the premium. However, if you have a balance in your flexible spending account and wish to continue your flexible spending account contributions after your retirement date, you would need to elect coverage via COBRA. See Question #10 on specifics related to flexible spending accounts and COBRA. Please consult with Human Resources about these benefits continuation issues. Q30. Do retirees have to elect medical every year through open enrollment? A30. No, the retiree s medical coverage will carryover from year to year unless you contact Human Resources to cancel. Q31. Is there a specified time period I would elect retiree medical coverage. A31. Yes, at the time you retire. If you elect to take the cash in lieu of medical payments for the nine-month period, you cannot later enroll in the retiree medical plan. Q32. If you do not live in University Heights, will my severance payments be subject to local tax in University Heights? A32. Yes. Q33. If I elect to participate in the SVERP, will the severance period go towards my years of service for Silver Circle? A33. No, your years of service calculation will stop on your retirement date. 7

8 Q34. Will my severance payments affect my monthly Social Security payments if I am receiving both at the same time? A34. You should call the Social Security Office directly to obtain advice on whether severance wages will go towards your Social Security benefits calculation. Q35. Will there be an opportunity to opt out after May 12, 2017? A35. Yes. If you indicated you want to participate in the SVERP, on May 12, 2017 you will receive the following three items: 1. Notice of Participation with retirement date; 2. Agreement; and 3. Demographic information. The signed Notice of Participation is due by May 19, You have also have 45 days from May 12, 2017 to sign the agreement. You may also elect not to sign the agreement. Once you sign the agreement, you have 7 days to revoke it. Seven days after the agreement is signed, your retirement under the SVERP is complete and final. 8