Program Booklet for Eligible Faculty

Transcription

1 Program Booklet for Eligible Faculty CLINICAL v1

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3 Table of Contents Overview...2 PRP At a Glance...3 Eligibility...4 Retirement Incentive Payment...5 Phase-Out Options Duration of Phase-Out Period...7 Workload and Duties...7 Satisfactory Performance and Applicable Policies... 8 Compensation During Phase-Out Period...9 Resignation of Tenure Appointments...10 Benefits Overview...10 Benefits Chart...11 Participation Application Process...16 Negotiation Period...16 Faculty Phased Retirement Agreement...16 Denial of Participation...17 Other Important Information and Appeals Procedure Faculty PRP Checklist... Inside Back Cover Appendices Appendix A: Sample Faculty Phased Retirement Agreement...23 Appendix B: Sample Benefits Illustrations...37 Appendix C: Application Instructions Appendix D: Sample Applications...52

4 2 Overview Since faculty are at the core of a university, faculty renewal is an on-going necessity for every university with attention devoted to faculty hiring, retention, and retirement. Howard University has a high proportion of its Tenured, Career Status, and Master Instructor faculty eligible to retire based on the University s retirement formula of age plus years of service equaling or exceeding 70. In light of this Howard University s Board of Trustees approved the offering of a voluntary, incentive Phased Retirement Program (PRP). Many faculty have expressed an interest in retiring, including participating in an incentive retirement program. The Faculty Senate recommended that a robust and fair incentive retirement program be offered this year; a presidentially appointed committee offered advice about how to structure a faculty incentive retirement program. A faculty survey of all retirement-eligible tenured faculty (with a response rate of 54 percent) revealed that many faculty felt they were in the final stages of their professorial careers, yet wanted to stay active with the University while progressively reducing their involvement over a period of time. For the University, the prospective retirement of significant numbers of senior faculty has to be handled as a carefully planned and orderly transition which inevitably must extend over a period of years (e.g., medical faculty may take two years to recruit, onboard and license). Recruiting and successfully integrating new faculty into Howard s community of scholars is a process that needs to be carefully planned and staggered over a period of years to avoid putting the continued smooth operation and accreditation of Howard programs at risk. Faculty want a planned and orderly transition in which their personal and professional plans are coordinated with the University s need to continue to successfully deliver programs in which these same faculty have, in many cases, invested much of their professional careers. Many faculty want to stay engaged with the University before fully retiring, while others wish to retire immediately. The faculty Phased Retirement Program (PRP) is designed to bring together these mutual needs and interests to create an orderly voluntary transition of retirement-eligible Tenured, Career Status and Master Instructor faculty. Faculty would fully retire or begin to reduce their proportion of full time service beginning July 1, 2012 on the basis of individual plans that provide for a phase-out period that could extend up to five years. The PRP offers incentives in recognition of longstanding service, while ensuring that the integrity of academic programs is protected. It is the University s intent to have all eligible faculty members who wish to participate accepted into the PRP. Since the integrity of the academic and clinical programs must be protected during this process, if mutually acceptable terms of departure of any specific faculty member cannot be negotiated to address the needs of the University, the faculty member may retire outside the PRP. Financial benefits of participation include a retirement incentive payment based on credited years of service. For every year of service, PRP participants will receive two weeks of pay, capped at an extra year s pay for PRP participants with 26 or more years of service. Salary for academic duties during the phase out period will be calculated based on the stated amount for academic salary included in the Clinical faculty member s Institutional Base Salary (IBS) letter for the fiscal year ending June 30, During the phase-out period, PRP participants salaries for academic duties will increase 3% per year starting with the first year, except in any year in which there is no pool for salary increases for those faculty outside the PRP. Academic salaries during the phase out period will be proportionately modified by any percentage changes in academic workload for the fiscal year. Clinical duties will be compensated year to year based upon the clinical duties and the methodology set forth in the Faculty Practice Plan. Duties will be tailored to match the respective percentage workloads for academic duties and for clinical duties agreed upon by the PRP participant. All participants, regardless of whether they are working full time, are provided health care and certain other benefits paid for by the University at the rate for full time current employees for the duration of their phase-out period. Lastly, PRP participants who are 62 or over, or as they become 62 may elect to collect retirement benefits under the Howard University Employees Retirement Plan/ Defined Benefit Plan, concurrently with their salary for current work. By early Spring Semester 2012, departments will know the availability of faculty participating in the PRP, including those faculty who will fully retire as of June 30, 2012 and be able to plan their course offerings and develop hiring and faculty deployment plans accordingly.

5 PRP At a Glance The first retirements and reductions in workload under the PRP will be July 1, Phase-out period of up to five years. Written protocol guides the process. Fixed payment based on years of service at the rate of two weeks of pay for each year of service, up to a maximum of one year s pay. Interested clinical faculty must submit an Application to Participate in the Phased Retirement Program by November 30, This initiates a period of negotiation with their Dean to determine the number of years, the proportion of full-time work for each year and their requested duties during their phase-out period. The negotiation must be completed by February 29, It is only when the faculty member, Dean and Provost or Senior VP for Health Sciences, as appropriate, have each signed the written Faculty Phased Retirement Agreement (which is prepared following the negotiation process) that the faculty member is committed and becomes a participant in the PRP. PRP participants can elect to collect pension payments under the Howard University Defined Benefit Plan concurrently with receiving their earned pay and their fixed payments once they reach age 62. The University will provide limited financial planning support for faculty as they evaluate the PRP in light of their personal circumstances. The duration, percentage of fulltime work and the nature of duties during each year of the phase-out period are negotiated between the faculty member and relevant Dean, working with the department chair, ranging from a maximum of 100% of a full-time workload to a minimum of 25% of a full time workload. Base pay for PRP participants will increase 3% per year for academic duties any year in which there is a general salary pool for faculty salary increases, and salary will be adjusted proportionally if the percentage of workload based on academic duties changes. Clinical duties will be compensated based upon the methodology set forth in the Faculty Practice Plan. During the agreed phase-out period, health, dental and life insurance benefits will be paid by the University at the rate the University pays for active, full time employees. All decisions will be in writing to include written justification in the event of a denial of participation. An appeal process is provided. After a faculty member has completed her/his phase out under this PRP, they are not disqualified from continuing to work for the University, though they may not be employed in administrative or tenure/tenure track positions. During the phase-out period, salary for academic duties will be pro-rata of full time FY salary for academic duties stated in the Institutional Base Salary (IBS) letter for the agreed percentage of a full-time academic workload for each year of the phase-out period. Clinical faculty will receive a component of pay under the Faculty Practice Plan for clinical duties. Faculty in the PRP will not be subject to Faculty Performance Evaluation System (FPES) reviews, but must maintain satisfactory performance. 3

6 Eligibility A Howard University faculty member is eligible to apply to participate in the faculty Phased Retirement Program (PRP) if the faculty member meets all of the following: 1. Is a current faculty member of Howard University and not retired nor otherwise separated; 2. Was eligible to retire as of June 30, 2011, which under Howard University s criterion is that their age plus years of credited service is 70 or greater; 3. Had at least five years of credited service as of June 30, 2011; and 4. Had been granted tenure or is a member of the Board of Trusteesdefined categories, Career Status or Master Instructor, as of June 30, Eligibility to apply does not make a faculty member a participant in the PRP. A faculty member must apply by completing an Application to Participate in the Phased Retirement Program by November 30, Following the completion of a negotiation process with his/her Dean by February 29, 2012, execution of a Faculty Phased Retirement Agreement, and approval by the Provost or Senior VP for Health Sciences, as appropriate, the eligible faculty member becomes a participant in the PRP. A sample of a Faculty Phased Retirement Agreement is contained in Appendix A to this booklet. A faculty member who retires or separates from the University prior to June 30, 2012 will not be eligible to participate in the PRP. Years of credited service for purposes of calculating the retirement incentive payment will be calculated as of June 30,

7 Retirement Incentive Payment Faculty participants in the PRP receive a Retirement Incentive Payment based on their length of credited service as determined for purposes of the Howard University Employees Retirement Plan. The Retirement Incentive Payment will be equal to two weeks of pay for each year of credited service, up to a maximum of one year s pay. Faculty members with 26 or more years of service will receive the maximum award of one year s pay. This Retirement Incentive Payment will be made whether the faculty member fully retires and terminates employment as of June 30, 2012, or, at the other end of the continuum, works full time for five years and fully retires as of June 30, For clinical faculty members, a portion of annual pay consists of compensation for academic duties (which, as used in this Booklet, means teaching, research, administrative and other non-clinical duties), and another portion of annual pay consists of compensation for clinical duties (which, as used in this Booklet, means professional services as defined in the Member Practice Agreement for Clinical Faculty), as determined under the methodology of the Faculty Practice Plan (FPP). The Retirement Incentive Payment for clinical faculty members shall similarly be made up of these two components: one portion of the Retirement Incentive Payment will be based on earnings derived from academic duties ( Academic Portion of Retirement Incentive ), and the other portion of the Retirement Incentive Payment will be based on earnings derived from clinical duties ( Clinical Portion of Retirement Incentive ) based upon the methodology set forth in the Faculty Practice Plan. Since faculty pay may vary year-to-year, the Retirement Incentive Payment for participation in the PRP will be calculated using the faculty member s highest actual W-2 earnings paid by the University during any of the following three 12-month periods, as combined for academic and clinical duties: July 1, 2011 to June 30, 2012; July 1, 2010 to June 30, 2011; and July 1, 2009 to June 30, An estimate of the faculty member s earnings for the 12-month period from July 1, 2011 through June 30, 2012 will be used to calculate the amount of the Retirement Incentive Payment. However, if the actual earnings for this period are higher than the estimate and also higher than the earnings for any of the other two periods, then the Retirement Incentive Payment will be calculated based on the higher actual amount of earnings for this period. PRP participants fully retiring as of June 30, 2012 will be paid the full Retirement Incentive Payment within 60 days of June 30, For clinical faculty members who will have a phase-out period, the faculty member may elect to have the Retirement Incentive Payment distributed in installments on one of the following schedules: 50% of the Academic Portion of the Incentive Payment within 60 days of June 30, 2012 and the remainder of the Retirement Incentive Payment (the other 50% of the Academic Portion and the full amount of the Clinical Portion of the Incentive Payment) in equal installments over the phase-out period, commencing at the end of the first fiscal year of the phase-out period; 5

8 100% of the Retirement Incentive Payment at the end of the phase-out period; Equal installments of the Retirement Incentive Payment at the end of each fiscal year during the phase-out period; 50% of the Retirement Incentive Payment at the end of each of the two final fiscal years in the phase-out period; or In such annual installments as are mutually agreed to by the faculty member and the University and documented in the Faculty Phased Retirement Agreement, provided that the latest any payment can be made is the end of the phase-out period, and the greatest payment that can be made prior to the end of the first year of the phase-out period is 50% of the Academic Portion of the Retirement Incentive Payment. The installment schedule selected will be documented in the formal Faculty Phased Retirement Agreement executed by the faculty member and the University. Once a payment schedule has been selected and is incorporated into the Agreement, no change to the dates of the payments will be permitted. Installments of the Retirement Incentive Payment under the schedule selected will be paid within 60 days of June 30 of the applicable year, subject to the faculty member s satisfactory performance and compliance with the Faculty Phased Retirement Agreement. The final installment is subject to the faculty member signing a Discontinuation of Service Release of Claims in a form provided by the University and such release becoming effective to update the release contained in the Faculty Phased Retirement Agreement. If a faculty member resigns his/her employment prior to June 30, 2012, the entire amount of the Retirement Incentive Payment (both Academic and Clinical Portions) will be forfeited. In addition, if at any time during the phase-out period (for those who have a phase-out period) a faculty member resigns his/her employment without the University s written agreement under the procedure discussed in this Booklet for a change in the phase-out period, any unpaid amounts of the Retirement Incentive Payment will be forfeited. Finally, if a faculty member s employment terminates due to death or due to disability (under applicable University policies then in effect), any unpaid installments of the Retirement Incentive Payment shall be paid within 60 days of the termination of employment. 6

9 Phase-Out Period Options Duration of Phase-Out Period Faculty members may propose to stop working completely as of June 30, 2012, or to continue working for a number of years before finally terminating employment with the University. For those faculty members who continue to work past June 30, 2012, the period of time from July 1, 2012 through the termination of employment will be known as the Phase-Out Period. The Phase-Out Period may last one to five years. Thus, a PRP participant who wishes to have a Phase-Out Period can propose to retire on June 30, 2013, or on any subsequent June 30 through June 30, The actual number of years of the Phase-Out Period for each participant (if the participant wishes to have a Phase-Out Period) will be specified in the negotiated Faculty Phased Retirement Agreement signed by the faculty member and the University. Workload and Duties Faculty members who will have a Phase-Out Period will propose the percent of an overall regular full-time workload that they will carry for each year of the Phase-Out Period ( Workload ), and the percent of time allocated to academic duties ( Academic Workload ), and clinical duties ( Clinical Workload ). The Workload during the Phase-Out Period will approximate 100%, 75%, 50%, or 25% of full time, but the percent of overall full time workload must either stay the same or decrease year by year. The Workload for each year of the Phase-Out Period will be specified in the faculty member s Faculty Phased Retirement Agreement, along with Academic Workload and Clinical Workload. Those faculty members who will have a Phase-Out Period will have the opportunity to request preferred duties to be performed during the Phase-Out Period within the agreed-upon Workload percentage. These duties, which may include instructional, research, advisory, and/or other academic duties, as well as clinical duties for clinical faculty members ( Duties ), will be specified in the faculty member s Faculty Phased Retirement Agreement. The University will make a good faith effort to accommodate a participant s requested Duties, but the Duties listed in the Faculty Phased Retirement Agreement will be subject to change by the faculty member s Dean in consultation with the faculty member and Department Chair (if applicable) based on the academic and clinical needs under the prevailing standards at the relevant time. Any such changes in duties will be consistent with the Workload, Academic Workload and Clinical Workload, and will not reduce compensation previously established for the fiscal year in question. Regardless of the Workload and the Duties to be performed, during the Phase-Out Period, participants will continue in the same rank and department (if applicable) and will continue to have the same college and school affiliation that they held prior to entering the Phase-Out period. PRP participants will not be permitted to accept other compensated employment within the University in any semester or teaching module falling within their Phase-Out Period and during which they are performing Duties. However, with the written approval of the faculty member s Dean and Department Chair (if applicable), the participant may perform additional work within the University (such as teaching or working on grants admin- 7

10 istered by the University) for compensation so long as it is performed in a period of time during the Phase-Out Period in which the participant is not required to perform any Duties (e.g., during a semester or module in which no Duties are required to be performed). Other employment outside the University is permitted, consistent with the Faculty Handbook and other University policies, provided it does not present any conflict of interest or otherwise interfere with the participant s University position. After entering into her/his Faculty Phased Retirement Agreement, a faculty member may make one (1) request during the Phase-Out Period to modify the date that employment will terminate, the Workload, Academic Workload, Clinical Workload and/or the requested Duties. This option is more fully explained in the Faculty Phased Retirement Agreement, a sample of which is included in Appendix A. Satisfactory Performance and Applicable Policies PRP participants will agree to continue to loyally and faithfully perform their Duties during the Phase-Out Period, and to maintain relevant professional license credentials, certifications, and competence. Participants will be required to complete an annual report for their Dean of their Duties and other activities and accomplishments. The Dean will examine this report, a report from the Chair of the Department (for those faculty working within a department structure), and other evidence that is relevant to determine whether there are any deficiencies in performance. A Dean s finding of deficiency will be communicated to the participant, and then must be addressed and remedied by the participant as soon as possible. A finding of serious deficiency which is not promptly remedied may result in the application of sanctions. Any finding of serious deficiency or application of sanctions will be subject to the review of the Program Administrator consistent with the appeal procedures of the PRP, as set forth in the Other Important Information and Appeals Procedure section of this PRP Booklet. The rules and policies of the University that apply generally to employees, as well as those that apply generally to the faculty regardless of status (including the Faculty Handbook) and those that generally apply to clinical faculty (including the Faculty Practice Plan) as such policies exist and may be amended from time to time, will continue to apply to the participant s employment during the Phase-Out Period, except as inconsistent with the participant s Faculty Phased Retirement Agreement or this PRP Booklet. These policies include, but are not limited to, the University s policy relating to academic freedom, and the University s policies concerning intellectual property such as inventions, copyrights, patents, and technology transfers ( IP Policies ). It is understood that the participant s Faculty Phased Retirement Agreement does not affect the respective rights and obligations of the parties under the University s IP policies except for the release of any existing legal claims contained in the Agreement. Notwithstanding the foregoing, participants will not be eligible to invoke the grievance procedures set forth in Section 2.8 of the Faculty Handbook, entitled Grievance Rights, Privileges, and Resolution of Disputes Governing Academic Freedom and Conduct of the Faculty. Dispute resolution relating to the PRP will be as provided in the Other Important Information and Appeals Procedure section of this PRP Booklet. 8

11 Compensation During Phase-Out Period Compensation for PRP participants during the Phase-Out Period (if they elect to have a Phase-Out Period) will continue to be comprised of a salary based on the performance of academic duties, and separate compensation based on the performance of clinical duties. The salary for academic duties will be calculated based on the faculty member s salary for academic duties stated in the Institutional Base Salary (IBS) letter for the fiscal year ending June 30, The salary for academic duties will increase by three percent (3%) each year of the Phase-Out Period (at the start of the first year), subject to the participant s satisfactory performance and compliance with the participant s Faculty Phased Retirement Agreement, except that the salary will not increase in any year in which there is no general pool for increasing salaries for faculty members who are not participating in the PRP and salary will be adjusted proportionately if the percentage of workload based on academic duties changes. (For academic administrators (e.g., Chairs and Deans) who will relinquish their administrative assignments during the Phase-Out Period and continue in faculty positions, the salary level used to set pay during the Phase-Out Period will be the June 30, 2012 salary including the component for the administrative assignment.) Compensation derived from clinical duties performed during the Phase-Out Period will continue to be determined from time to time under the methodology set forth in the Faculty Practice Plan ( FPP ). The salary for academic duties and the compensation established for clinical duties for the first year of the Phase-Out Period will be stated in the Faculty Phased Retirement Agreement. During the Phase-Out Period, participants will continue to be subject to FPP rules and policies to the extent not inconsistent with this PRP Booklet and the participant s Faculty Phased Retirement Agreement. PRP participants will not, however, participate in the Faculty Performance Evaluation System ( FPES ) process or be subject to FPES reviews during the Phase-Out Period. 9

12 Resignation of Tenure Appointment As a result of signing the Faculty Phased Retirement Agreement and becoming a participant in the PRP, a faculty member s tenured status at the University will permanently end on June 30, 2012, and the faculty member will irrevocably waive, resign, and relinquish all tenure rights as of that date. Faculty members who have a Phase-Out Period will continue in the same rank and to have the same department (if applicable) and college or school affiliation that they held prior to the Phase-Out Period. Faculty members who choose to have a Phase- Out Period will be considered contract employees during the Phase-Out Period whose employment is subject to the terms of the Faculty Phased Retirement Agreement and the PRP. A sample of this Agreement is contained in Appendix A. Faculty members who relinquish tenure and enter the Phased Retirement Program will remain eligible, while serving full-time during a 1 to 5 year phase-out period, to serve on department and school/college Appointment, Promotion and Tenure Committees with the full rights and responsibilities held prior to entering the PRP. In addition, regardless of the percentage of full-time workload, faculty in a phase-out period will remain eligible to participate as voting members on other department, school/college and university committees for which tenure is not required consistent with the relevant committee s policies and procedures. Benefits Overview PRP participants will receive ongoing benefits during a PRP phase-out period which are summarized in the following Benefits Chart. The chart includes columns that summarize the benefits that are being provided currently to faculty, the benefits that will be provided to PRP participants during a phase-out period and the benefits that are provided to retirees for which PRP participants will be eligible at the end of the phase-out period. There is also a sample Retirement and PRP Benefits Statement in Appendix B illustrating the statement which eligible faculty will receive from the Office of Human Resources. In addition, the University will offer financial planning assistance for PRP-eligible faculty members which assistance will include one-on-one meetings with a financial planning professional of their choice. Further information on financial planning will be provided in separate materials. The benefits that are summarized below are provided pursuant to University benefit plans. The University reserves the right to change its employee benefit plans and offerings for all employees, retirees and beneficiaries. Benefits are subject to actual plan terms in effect at a given time. In the event of a conflict between the plan terms and the summary chart below, the terms of the benefit plan will control. 10

13 Benefits Chart Faculty Phased Retirement Program (PRP) Benefits Chart Clinical Benefit Programs Retirement Incentive Payment Prior to Participation in the Phase Out Retirement Program (PRP) Benefits During Phase Out Retirement Program N/A Retirement Incentive Payment of up to one year s pay based on years of service at the rate of two weeks of pay for each year of service accrued as of June 30, 2012 (maximum of 52 weeks). For those fully retiring as of June 30, 2012, the up-front payment is the full Retirement Incentive Payment amount. Benefits at the Completion of Phase Out Retirement Program N/A For those with a phase-out period, the Retirement Incentive Payment will be distributed on one of the following schedules; - 50% of the Academic Portion of Incentive Payment within 60 days of June 30, 2012 and the remainder of the Retirement Incentive Payment (the other 50% of the Academic Portion and the full amount of the Clinical Portion of the Incentive Payment) in equal installments over the phaseout period, commencing at the end of the first fiscal year of the phase-out period; - 100% of the Retirement Incentive Payment at the end of the phase-out period; - Equal installments of the Retirement Incentive Payment at the end of each fiscal year during the phaseout period; - 50% of the Retirement Incentive Payment at the end of each of the two final fiscal years in the phase-out period; - In such annual installments as are mutually agreed to by the faculty member and the University and documented in the Faculty Phased Retirement Agreement, provided that the latest any payment can be made is the end of the phase-out period, and the greatest payment that can be made prior to the end of the first year of the phase-out period is 50% of the Academic Portion of the Page 1 of 5 11

14 Benefits Chart Faculty Phased Retirement Program (PRP) Benefits Chart Clinical Benefit Programs Prior to Participation in the Phase Out Retirement Program (PRP) Benefits During Phase Out Retirement Program Retirement Incentive Payment. Benefits at the Completion of Phase Out Retirement Program Healthcare Program CIGNA Medical* CIGNA Dental *Pharmacy and Vision Benefits are Included Howard University Employees Retirement Plan (Defined Benefit) Howard University Savings Plan Contributions (403(b), Roth and 457(b)) Employee Healthcare Program for full-time employees. HUERP pension available, if age plus service equals seventy (70): Upon retirement. In-service, April 1 st of calendar year following age 70 ½ Based on FTE Salary - Employee may contribute up to regulatory limits Payments will be made within 60 days of June 30 of the relevant year subject to the faculty member s satisfactory performance and compliance with the Faculty Phased Retirement Agreement. Retiree Healthcare Program Class II. Premium contribution; the same as full-time faculty members. Even if age 65 or more, throughout the PRP program the University plan is primary and Medicare is secondary. You do not need to obtain Medicare Part B at this time. HUERP pension available, if age plus service equals seventy (70): - In service distribution election beginning at age 62 - In-service, distribution continues for those already receiving pension based on April 1 st of calendar year following age 70 ½. Based on PRP Salary**- Employee may contribute up to regulatory limits Retiree Healthcare Program. Premium contribution the same as retirees in applicable category below: - Hired prior to July 1, 1993 or those - Hired/Rehired rehired after June 30, 1993 Those age 65 and over must obtain Medicare Part B in addition to Medicare Part A. University healthcare program will be secondary with Medicare primary. HUERP pension continues if elected prior to or during PRP Must commence immediately if Normal Retirement Date has been reached, i.e., June 30 th on or after 65 th birthday. No further contributions by Employee or Employer. Employer Howard University Savings Plan 403(b) Disbursements Employer contributes 6% and matches up to 2% of Employee contribution, not to exceed regulatory limits Loans Hardships (Employee Contributions Only) Age 59 ½ Withdrawals Age 70 ½ Minimum Distributions Employer contributes 6% and matches up to 2% of Employee contribution, not to exceed regulatory limits Loans Hardships (Employee Contributions Only) Age 59 ½ Withdrawals Age 70 ½ Minimum Distributions Loans Hardships (Employee Contributions Only) Distributions Based on Termination of Employment Age 70 ½ Minimum Distributions Page 2 of 5 12

15 Benefits Chart Faculty Phased Retirement Program (PRP) Benefits Chart Clinical Benefit Programs Life Insurance Prior to Participation in the Phase Out Retirement Program (PRP) Benefits During Phase Out Retirement Program Benefits at the Completion of Phase Out Retirement Program 1) Basic 2) Supplemental 3) Spouse 4) Dependent ($10,000) Remission of Tuition Short-Term Disability Based on FTE Salary Based on FTE Salary Based on FTE Salary Dependent ($10,000) Full-time (and 50%) faculty eligible. Dependents of fulltime employees eligible. Policy provisions in force for credit hour limits and eligible academic programs. Based on FTE salary, 50% of weekly base pay up to $1,000 per week up to six (6) months. Based on FTE Salary Based on PRP Salary** Based on PRP Salary** Dependent ($10,000) Benefits continue as if full-time faculty member for self and eligible dependents. Based on PRP** salary, 50% of weekly base pay up to $1,000 per week up to six (6) months. Based on last FTE Salary Based on last PRP Salary** Based on last PRP Salary** Dependent ($10,000) Retirees are eligible only if receiving HUERP pension for up to 21 credit hours per semester. Eligible dependents receive same benefits as dependents of active full-time employees. N/A Long-Term Disability Based on FTE Salary, 60% of monthly base pay up to a maximum of $10,000 per month until the earlier of Social Security Normal Retirement Age, or until disability ends. Based on PRP** salary, 60% of monthly base pay up to a maximum of $10,000 per month until the earlier of Social Security Normal Retirement Age, or until disability ends. N/A Permanent Disability or Death (Retirement Incentive Payments) N/A Remaining Retirement Incentive Payments will be paid out as a lump sum to the estate of the PRP participant. N/A Flexible Spending Account (Based on Pre- Tax Dollars) Healthcare ($3,000, will be reduced to $2,500 beginning January 1, 2013) Dependent Care ($5,000) Employee contributions may continue, up to regulatory limits. N/A Employee Assistance Program Available to all full-time employees and their dependents. Continues. N/A Page 3 of 5 13

16 Benefits Chart Faculty Phased Retirement Program (PRP) Benefits Chart Clinical Benefit Programs Federal and State Income Tax Prior to Participation in the Phase Out Retirement Program (PRP) Benefits During Phase Out Retirement Program Taxes applied to all income. PRP earnings are subject to Federal and State taxes. HUERP: Subject to both Federal and State (mandatory withholding) income tax. Retirement Incentive Payments earnings are subject to Federal and State taxes. Benefits at the Completion of Phase Out Retirement Program HUERP: Subject to both Federal and State (mandatory withholding) income tax Social Security and Medicare Tax Payroll taxes are withheld from salary for Social Security and Medicare. PRP earnings are subject to Social Security and Medicare taxes. Retirement Incentive Payments are earnings and subject to Social Security and Medicare taxes. HUERP: Not subject to Social Security and Medicare taxes. HUERP: Not subject to Social Security and Medicare taxes. Social Security Benefits You may start receiving benefits as early as age 62. For those born in 1947 (turning 65 in 2012), full retirement for Social Security is 66 years. If under SS full retirement age when you begin Social Security benefits, $1 in benefits will be deducted for each $2 earned above the annual limit. For 2011, the limit is $14,160. In the year you reach full retirement age, $1 in benefits will be deducted for each $3 you earn above a different limit but only for the months before the month you reach the full retirement age. For 2011, the annual limit is $37,680. Starting with the month you reach full retirement age, you can receive your full Social Security benefits with no Other Benefits Offered paid by the Employee: AFLAC Home and Auto limit on your earnings. Available to employees who work full-time and have these payments payroll deducted. Same Note that the Retirement Incentive Payment earnings during the phase out retirement period are also considered earnings for purposes of the Social Security offset. May continue benefits by payroll deductions. Same May continue Long Term Care only. Page 4 of 5 14

17 Benefits Chart Faculty Phased Retirement Program (PRP) Benefits Chart Clinical Benefit Programs Insurance ARAG Pre-Paid Legal Long Term Care CIGNA AD&D Prior to Participation in the Phase Out Retirement Program (PRP) Benefits During Phase Out Retirement Program Benefits at the Completion of Phase Out Retirement Program Financial Planning All employees eligible to participate in the PRP (not just those who indicate their preference to participate in the PRP program) will be given the option of receiving independent Financial/Retirement Planning. Employees who choose to go to their own advisor will be reimbursed up to $400 in the aggregate. The Financial planning must be completed by Friday, December 16, All employees eligible to participate in the PRP will be given the option of receiving independent Financial/Retirement Planning from a firm to be Determined. Employees who choose to go to their own advisor will be reimbursed for up to $400 in the aggregate. The Financial planning must be completed by Friday, December 16, N/A Workers Compensation All employees are covered. Coverage continues at the PRP earnings rate (excludes the Retirement Incentive Payments). N/A Note: Howard reserves the right to make changes to its benefits program for all employees, retirees and beneficiaries. Any such benefit changes will also apply to the PRP participants and beneficiaries. Benefits are subject to the actual plan terms in effect at a given time. In the event of a conflict between the terms of any benefit plan and this summary, the terms of the benefit plan will control. ** For purposes of this Benefits Chart, PRP Salary includes salary for academic duties and compensation for clinical duties as determined in a given year, subject to the applicable benefit plan terms and limitations. Footnotes: 1. PRP participants will not be eligible for sabbatical or any type of paid leave that is provided pursuant to University policies. 2. If you are on approved Short Term Disability (STD) benefits either at the time or after the PRP Agreement is signed, the Retirement Incentive Payment amount due during the STD period will be paid in accordance with the payment schedule in the Agreement, but you will not receive any compensation for services until you return to duty within the STD period, i.e., six months. If you are certified for Long Term Disability (LTD) benefits after the PRP Agreement is signed, your employment will end as of the date of the LTD certification, and the full unpaid amount of the Retirement Incentive Payment will be paid within 60 days of the termination of your employment, provided you have signed a Discontinuation of Service Release and it has become effective to update the release in the PRP Agreement. You will not receive other income under the PRP but may apply for LTD benefits or to continue/commence/defer HUERP benefits. Page 5 of 5 15

18 Participation Application Process Faculty members who are interested in participating in the PRP must submit an Application to Participate in the Phased Retirement Program to the office of their Dean by Wednesday, November 30, Submitting an application is not a commitment to retire and does not change a faculty member s status in any way. Details about the application and instructions on completing it are included in Appendix C. Negotiation Period Timely submission of an application initiates a three-month period during which the faculty member works with his/her Dean, assisted by the Department Chair (if applicable) to negotiate a mutually acceptable plan specifying the details of the applicant s participation in the PRP. The faculty member and the Dean (and Chair, if applicable) will discuss whether the faculty member will have a Phase-Out Period, and if so, the number of years of further work in the Phase-Out Period (from one to five). The parties will also discuss the approximate proportion of a full time workload for each year of this period (100, 75, 50, or 25 percent) and the percent allocated to academic duties and percent allocated to clinical duties. The application solicits each faculty member s requested duties for each year of the Phase-Out Period. These duties will be discussed in the negotiation period, but the faculty member s ultimate responsibilities during the Phase-Out Period (if an agreement is reached, as discussed below) will be based on departmental needs in that future period, though within the agreed Workload, Academic Workload and Clinical Workload. Any such changes in duties will not reduce compensation previously established for the fiscal year of the Phase-Out Period in question. Further information concerning workload and duties, including clinincal needs, is described in the section above concerning Phase-Out Period Options. 16 Faculty Phased Retirement Agreement In order for a faculty member to participate in the PRP, he or she must reach a mutual understanding with the University relating to his or her termination date, duration of any Phase-Out Period and workload by February 29, If such an understanding is reached, it will be documented in a Faculty Phased Retirement Agreement that will be signed by both the faculty member and the University. The Faculty Phased Retirement Agreement will set forth the faculty member s Retirement Incentive Payment, duration of Phase-Out period, Workload, Academic Workload, Clinical Workload, requested Duties, compensation during the Phase-Out Period, and various other terms. It will also include a release of any claims the faculty member might have against the University. A sample Faculty Phased Retirement Agreement is included in the Appendix. After receiving the completed Faculty Phased Retirement Agreement, the faculty member will be given 45 days to consider and sign it. After signing the agreement, the faculty member will also have 7 days to revoke it if desired. In the case of revocation, the agreement will be null and void; the faculty member will not be required

19 to retire or relinquish any rights, will not receive any of the payments and benefits under the PRP, and the relationship between the faculty member and the University will return to the status quo. If the 7-day period expires without revocation, the agreement will become effective. It is only when the faculty member and the University have signed the Agreement and it has become effective that the faculty member has resigned his or her tenure or Career Status or Master Instructor status as of June 30, Denial of Participation Although the University s goal is to allow participation in the PRP for all faculty members who wish to retire under its terms, participation is neither automatic nor guaranteed. In order to maintain the integrity of the University s academic and clinical programs, the University reserves the right to deny participation if it is determined that a faculty member s participation would impair the continued effective or efficient operation of a University academic or clinical program. All participation determinations will be made on a non-discriminatory basis, without regard of a faculty member s race, color, national origin, sex, age, religion, disability, or any other characteristic prohibited by applicable law. Denial of participation may be appealed. In making the determination of whether to accept an eligible faculty member s request, the Dean will consider the instructional, student support, research, service, leadership and administrative needs of the department or other relevant unit including its degree programs, service and elective course offerings and other academic requirements. The Dean, in consultation with the department chair (if applicable) will take into account available staffing considering the number, skill set, specializations, credentials, teaching history, clinical experience, clinical expertise and research experience of faculty available for meeting each academic need. For clinical faculty, the Dean will also consider the needs of the University s clinical operations and programs. This will be done in awareness of planned retirements, separations and loss of availability including through the PRP, current and projected hiring plans, student enrollments, and projected curricular changes. Department level faculty availability planning must look at faculty availability year by year. The faculty member s capabilities and potential roles will be considered in relation to the needs identified. Any offer of participation in the PRP made by the University must not adversely affect the ability of the department to offer, or contribute to the ability of other departments to offer, published degree programs with the level of quality and educational opportunities currently available. 17

20 Other Important Information and Appeals Procedure 18 Plan Name and Type The formal name of the Phased Retirement Program is the Howard University Phased Retirement Program. The Phased Retirement Program is considered an employee benefits plan under the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Name and Address of Employer The Phased Retirement Program is sponsored by: Howard University Department of Benefits and Pension Administration th Street, NW Suite 422 Washington, DC Employer Identification Number The Internal Revenue Service has assigned Howard University the following employer identification number: Phased Retirement Program Administration The Phased Retirement Program is administered by a committee (the Program Administrator or Administrator ) consisting of the Provost, the Senior Vice President of Health Sciences, and the Chief Human Resources Officer. The Administrator is responsible for maintaining records, approving participants, determining Phased Retirement Program benefits, and resolving disputes with respect to participation, benefits amounts and the terms or operation of the Phased Retirement Program and the Faculty Phased Retirement Agreement ( Agreement ) entered into by a participant in the Program, including, but not limited to disputes arising as a result of employment during any phase-out period under the Agreement. The Administrator shall have the full and complete discretion to (a) adopt such rules for the administration of the Phased Retirement Program as it considers desirable, (b) construe the terms of the Phased Retirement Program, (c) correct defects (including requiring repayment of improperly paid amounts), (d) supply omissions, (e) reconcile inconsistencies to the extent necessary to effectuate the Phased Retirement Program, (f) seek advice of counsel, and (e) take other actions needed in carrying out the functions of the Program Administrator. Any actions taken pursuant to this paragraph are discretionary actions of the Administrator, and shall be conclusive and binding on all parties. The Program Administrator s address is: Jimmy Jones Chief Human Resources Officer Howard University th Street, NW Suite 422 Washington, DC Fiscal Year of the Program The fiscal year of the Phased Retirement Program shall be from July 1 to June 30. The Phased Retirement Program is a window phased retirement plan of limited duration, in which all Participants must begin their phase-out period (if any) as of July 1, All employment during phase-out periods shall be completed in accordance with the terms of the individual Participant s Faculty Phased Retirement Agreement. Under the terms of such agreements, all Participants must permanently give up tenure, or, if applicable, their Career Status or Master Instructor appointments, as of June 30, 2012, and their employment must terminate no later than June 30, Agent for Service of Legal Process The General Counsel, Howard University, has been designated as the agent for the service of legal process. Claims and Appeals Procedure A claim for Phased Retirement Program benefits, i.e., participation, must be in writing and delivered to the office of the Dean of the

21 faculty member s school or college. The procedure and time limits for submitting your claim for benefits is contained in other sections of this Booklet including those titled Eligibility and Participation. Your Application for consideration shall be considered a claim for Phased Retirement Program benefits. Following the Dean s receipt of your claim and the completion of the process for negotiation of terms relating to termination date, workload and requested duties during any phase-out period with your Dean, you will receive a written notice from the Dean if your proposed terms for participation in the Phased Retirement Program have not been accepted by February 29, If special circumstances require an extension of time beyond February 29, 2012, written notice will be given to you prior to February 29, 2012 and will explain the reasons for the extension. If you are not furnished notice regarding your claim within these time periods, your claim will be considered denied. Any disputes that arise concerning the benefits of, or the terms or operation of, the Phased Retirement Program or the Faculty Phased Retirement Agreement entered into to participate in the Program, including disputes arising from employment during any phase-out period under the Agreement, will also be considered a claim. Any such dispute should be raised initially with your Dean for decision. If you are not furnished a written notice from the Dean regarding your claim that arises during the administration of the Phased Retirement Program within thirty (30) days after you have presented the dispute to the Dean, or if you have been given written notice that there are special circumstances requiring an extension of time beyond the thirty (30) day period which explains the reasons for the extension, at the end of such extension period, then your claim will be considered denied and you have 60 days to request a review by the Program Administrator. If the Dean denies your claim, i.e., participation in the Phased Retirement Program, or your claim relating to benefits of, or the terms or operation of, the Phased Retirement Program or the Faculty Phased Retirement Agreement, in whole or in part, he or she will notify you in writing, specify the reasons for the denial, refer you to the applicable provisions of the Phased Retirement Program or Phased Retirement Agreement document or other relevant records or papers, and identify any additional material that might be necessary to perfect your claim and why it is necessary. You will also be told how you can appeal to the Program Administrator for reconsideration of the decision and of your right to bring a civil action following an adverse decision on appeal. Should you disagree with a Dean s determination, you have 60 days to appeal. If you seek reconsideration and review of denial of a claim, the Program Administrator will reconsider your claim and its resulting decision will be issued to you in writing within 30 days after your request. If more time is needed because of unusual circumstances, you will be notified. The Program Administrator or its delegate has the exclusive discretionary authority to construe and to interpret the Phased Retirement Program, to decide all questions of eligibility and participation for benefits, and to determine the amount of such benefits, and questions relating to the terms and operation of the Phased Retirement Program or the Faculty Phased Retirement Agreement entered into to participate in the Program, and its decisions on such matters are final and conclusive. Any interpretation or determination made pursuant to such discretionary authority shall be upheld on judicial review, unless it is shown that the interpretation or determination was an abuse of discretion (i.e., arbitrary and capricious). Assignment of Benefits Benefits under the Phased Retirement Program may not be assigned, transferred or pledged to a third party, for example, as security for a loan or other debt. Phased Retirement Program Amendment and Termination The University reserves the rights to amend or terminate the Phased Retirement Program at any time for any reason. Termination or amendment of the Phased Retirement Program shall not affect the rights of any employee who has been approved by the Program Administrator to participate in the Phased Retirement Program, has entered into and not revoked a Faculty Phased Retirement Agreement, and has begun reduced effort during the phase-out period under the Phased Retirement Program. 19