Faculty Retirement Incentive Program

PURPOSE OF THE PROGRAM
To help the University of Puget Sound (the “University”) more proactively plan for faculty transitions and to help plan for the institution’s long-term needs, the University has elected to provide a Faculty Retirement Incentive Program (the “Program” or “FRIP”). The FRIP is a one-time opportunity for eligible tenured faculty members to voluntarily retire and end employment as of June 30, 2023, in exchange for a special incentive package. Participation in the Program is strictly voluntary.
SUMMARY OF PROGRAM
The essential terms of the Program are set forth below:
1. Eligibility.
  Faculty members who meet the tenure, age, and service requirements set forth below are eligible to participate in the FRIP:
  1. Tenure. A faculty member must hold tenure.
  2. Age. A faculty member must be age 59.5 or older by June 30, 2023;
  3. Service. A faculty member must have at least 11 years of service with the University as of June 30, 2023. Service is measured from the date of hire through June 30, 2023.
2. Retirement/End of Employment.
  Under the Program, in consideration for the incentive payments offered, an eligible faculty member agrees to relinquish tenure and end employment with the University as of June 30, 2023.
3. Incentive Package.
  Eligible faculty members who apply for the Program and are accepted by the University, and who sign the requisite agreements and releases described below will receive the following incentive package:
  1. An Incentive Retirement Payment. A lump sum Incentive Retirement Payment of a year’s salary equal to the faculty member’s fiscal year base salary, as specified on the faculty salary schedule for fiscal year 2023 (July 1, 2022–June 30, 2023). This payment is subject to applicable withholding.
  2. A Supplemental Incentive Payment. An additional Supplemental Incentive Payment of $8,796, also payable in a lump sum, that can be utilized to pay for future medical premiums, but the amount is unrestricted and can be utilized for any purpose the faculty member wishes. The amount, however, is based on the cost of the employee-only medical premium for the University’s medical plan for a period of 12 months ($733 month x 12) and is subject to applicable withholding.
  3. Customary Emeritus Benefits. In addition to the above, the faculty member will be entitled to the customary emeritus benefits (email access, library access, fitness center access, reduced costs to certain events, and part-time teaching eligibility).
PROGRAM APPLICATION AND APPROVAL PROCESS
1. Step 1. Participation – Requires the Timely Execution of Two Documents by January 3, 2023.
  An eligible faculty member must timely sign and return two documents in order to participate in the Program: the attached Participation Agreement (Exhibit A) and the attached Release (Exhibit B). Both documents must be signed, returned and received by the University no later than January 3, 2023, by hand-delivery, certified mail, or email.
  The agreement to retire and end employment on June 30, 2023, is irrevocable by the faculty member once the Participation Agreement is signed and returned, but is subject to acceptance by the university. If the University accepts the faculty member’s Participation Agreement, the faculty member will be eligible to receive the incentive package. However, in order to receive the incentive package, the faculty member must sign and return the first Release (Exhibit B) by January 3, 2023, and the second Release (Exhibit C) on or after June 30, 2023.
2. Step 2. University Acceptance of Participation by January 11, 2023.
  The University will notify eligible faculty members of acceptance of their Participation Agreement on or before January 11, 2023.
3. Step 3. Retirement and End of Employment on June 30, 2023.
  Faculty members who are notified of the acceptance of their Participation Agreement will end their University employment on June 30, 2023.
4. Step 4. Execution of a Second Release and Receipt of Incentive Payments – June 30, 2023 through July 8, 2023.
  In order to receive the incentive payments, the faculty member must sign and return a second Release (Exhibit C) on or after June 30, 2023. This second Release must be signed, returned to and received by the University during the time period June 30, 2023, through July 8, 2023. If the faculty member’s Participation Agreement has been accepted by the University and the faculty member fails to timely sign and return the required second Release, they will not receive the Program payments, but their last day of employment will remain June 30, 2023.
NOTICES AND PROGRAM DOCUMENTS
Any document, notice or Release required to be sent to the University under this Program shall be hand-delivered to the Office of the Provost, or sent by certified mail, or email (with high importance) to the following address:
Office: Jones 111

  Mail:   ATTN: FRIP Participation Agreement Reviewer
  Office of the Provost
  University of Puget Sound
1500 N. Warner St., #1001
Tacoma, WA 98416-1001

  Email: provost@pugetsound.edu
  SUBJ: FRIP Participation Agreement
ADDITIONAL DETAILS OF THE PROGRAM
1. Factors to be Considered in Reviewing Applications
  Factors to be considered by the University in evaluating a faculty member’s Participation Agreement for the Program will include, but are not necessarily limited to, the following:
  1. the teaching load and other University service requirements after June 30, 2023;
  2. the needs of the department/program, and the ability of the department/program to cover teaching assignments after June 30, 2023; and
  3. other applicable departmental and University financial and operational considerations.
    Although there are no set limits on who or how many faculty members will be allowed to participate in the Program, the University reserves the right to limit participants at the discretion of the Provost, in consultation with Human Resources.
    
    A faculty member who applies for the Program will receive one point for each year of age and an additional point for each year of service. When deciding between similarly situated faculty members, the University will first accept the voluntary retirement of the faculty member with the highest number of points and work down the point totals until determining that the business necessity or financial need is satisfied. Eligibility to participate is also limited by the University’s right to reject participation in the Program.
2. Decisional Unit; Eligibility
  The decisional unit utilized for this Program is all tenured faculty of the University with the following exclusions:
  1. Tenured faculty who do not meet the age and service requirements (excluded due to failure to meet the eligibility requirements);
  2. Tenured faculty who have delivered a notice of resignation or retirement prior to November 1, 2022, including those that have elected and been approved for Early Retirement or Phased Retirement as of that date.
    If you have questions about your age and service as it relates to eligibility, please email benefits@pugetsound.edu.
LOSS OF ELIGIBILITY
A faculty member will lose the right and ability to receive benefits under this Program for one or more of the following reasons:
1. The faculty member does not sign and return both the Participation Agreement and the Release (Exhibit B) by January 3, 2023;
2. The faculty member is terminated by the University for good reason due to the failure to fulfill their essential job duties or for a violation of the University’s policies or any other reason specified in the Faculty Code;
3. The faculty member otherwise ends employment before the scheduled end date of June 30, 2023; and/or
4. The faculty member dies before the date that Program benefits are distributed.
  Once the faculty member’s Participation Agreement has been accepted by the University, their last date of employment is June 30, 2023. However, in order to receive the Program incentive payments, the faculty member must timely sign and return a second Release (Exhibit C) on or after June 30, 2023, and return the Release to the University during the period June 30, 2023, through July 8, 2023. If the faculty member’s Participation Agreement is accepted by the University and the faculty member does not sign and return the second Release by July 8, 2023, their last date of employment will remain June 30, 2023, but the faculty member will not receive any Program incentive payments.
SUMMARY OF APPLICABLE TIME PERIODS
An eligible faculty member must accept the offer to participate by signing both the Participation Agreement (Exhibit A) and the Release (Exhibit B), and by returning the signed agreements by January 3, 2023. The agreement to retire and end employment on June 30, 2023, is irrevocable by the faculty member once the Participation Agreement is signed and returned to the University, but is subject to acceptance by the University. The University will notify the faculty member of acceptance or rejection of their voluntary retirement by January 11, 2023. If a faculty member has been notified of acceptance into the Program, their last day of employment will be June 30, 2023, and they must timely sign and return a second Release (Exhibit C), on or after June 30, 2023, in order to receive the incentive payments. A signed second Release must be received by the University during the time period of June 30, 2023 through July 8, 2023. Upon receipt, the faculty member will receive the lump sum incentive payments on the next regular payroll cycle of the University, i.e., July 14, 2023, or July 31, 2023.
BENEFITS PROVIDED: INCENTIVE RETIREMENT PAYMENT AND INCENTIVE SUPPLEMENTAL PAYMENT
Once the faculty member’s Participation Agreement is accepted, and the faculty member signs and returns the requisite releases by the applicable deadlines, they are eligible to receive a single lump sum incentive payment, subject to withholding, that is comprised of: (i) An Incentive Retirement Payment of a year’s salary equal to their fiscal year base salary in effect as specified on the faculty salary schedule for fiscal year 2023 (July 1, 2022–June 30, 2023); and (ii) a Supplemental Incentive Payment of $8,796, which is based on the premium for active employee-only coverage in the University’s medical plan for a period of 12 months ($733 x 12). In connection with the faculty member’s end of employment, they will receive a COBRA notice and election form and they will be responsible for any premium payments if they elect to participate. However, there is no requirement that the faculty member elect COBRA coverage, or that this Supplemental Incentive Payment be utilized for medical, dental, or vision coverage. The Supplemental Incentive Payment can be utilized for any purpose.
The payments will be issued as a one-time lump sum amount minus applicable taxes (e.g., federal income tax, FICA, etc.). No deductions will be taken for flexible spending accounts, the University of Puget Sound’s 403(b) Plan or 457(b) Plan, and voluntary benefits such as medical/dental/vision/life insurance premiums, from these payments. These payments will not be considered compensation for purposes of any employee benefit pension or welfare plan sponsored or maintained by the University.
CLAIMS AND DISPUTES; MANDATORY ADMINISTRATIVE REVIEW AND ARBITRATION
This Program is a voluntary incentive program not subject to ERISA, as it is a one-time payment, paid from the University’s general assets, without an ongoing administrative scheme. It also is intended to meet the requirements for a voluntary early retirement incentive agreement and a voluntary exit incentive program in accordance with the Age Discrimination in Employment Act, as amended. This Program is, however, subject to mandatory administrative review process and mandatory arbitration. Any dispute or claim must be filed with the FRIP Claims Administrator within 180 days of June 30, 2023. Any such filed claim or dispute should include all reasons that the faculty member is disputing the actions of the University under this Program and the legal basis for the faculty member’s position. The dispute or claim will be reviewed by the FRIP Claims Administrator and a decision generally will be rendered within 90 days of receipt of the faculty member’s claim, and the FRIP Claims Administrator will notify the faculty member in writing if any extension is necessary. The FRIP Claims Administrator will have access to all relevant information from the faculty member, the Office of the Provost, and/or other University records as needed.
If the faculty member is dissatisfied with the FRIP Claims Administrator’s determination, they must file a written appeal within 180 days of the FRIP Claims Administrator’s decision. The appeal will be reviewed by an Appeals Committee appointed by the University. The Appeals Committee generally will render a written decision within 90 days of the filing of the faculty member’s appeal, and will notify the faculty member in writing if any extension is necessary. The Appeals Committee has discretionary authority to decide all issues of fact or law.

If the faculty member is dissatisfied with the decision on appeal, they must request mandatory arbitration with JDR, Seattle, Washington, within 90 days of the opinion on appeal. The rules of JDR, Seattle, will govern the selection of the arbitrator and the arbitration proceeding, except as provided for herein. The University shall pay the costs and fees of the arbitrator. Each side shall bear their own costs and attorney fees incurred in the arbitration, unless prohibited by applicable law. Mandatory arbitration is the exclusive remedy to challenge any decision on appeal and, by participating in the Program, the faculty member waives any right to file a civil lawsuit or to have a jury trial, but nothing in this agreement prohibits the faculty member from filing a claim or charge with the National Labor Relations Board or from filing an administrative charge or complaint of discrimination or harassment with either the Equal Employment Opportunity Commission or any state or local equal employment opportunity agency, or from seeking injunctive relief (preliminary or permanent) available under applicable laws for the purposes of the enforcement of this Program. Any dispute or claim relating to the Program or to any agreement related to the Program shall be brought individually, and the faculty member shall not join such claim with claims of any other person or entity, or bring, join or participate in a class or collective action against the University. Venue for any arbitration is Seattle, Washington and the applicable law is that of Washington State. Any claim, appeal, or notice of arbitration must be emailed or mailed to the following address:

Mail: ATTN: FRIP Claims Administrator
Office of Human Resources
University of Puget Sound
  1500 N. Warner St., #1064
Tacoma, WA 98416-1064

            Email: benefits@pugetsound.edu
            SUBJ: FRIP Claim/Appeal

  with a copy to:

Mail: Provost
University of Puget Sound
1500 N. Warner St., #1001
Tacoma, WA 98416-1001

            Email: provost@pugetsound.edu
            SUBJ: FRIP Claim/Appeal
INFORMATIONAL MEETINGS
Any eligible faculty member who is considering participating in the Program is encouraged to attend an informational meeting. The University will provide a schedule of any informational meetings.
MISCELLANEOUS
This Program is intended to comply with Section 409A of the Internal Revenue Code as either an exempt window benefit or the payment of benefits that meets the short-term deferral requirements of Section 409A. The Program is also intended to be a voluntary early retirement incentive agreement and a voluntary exit incentive program within the meaning of the Age Discrimination in Employment Act. The decisional unit and the eligibility criteria are set forth under the Eligibility section above.
No provisions of this Program may be modified, altered, waived or amended, unless in writing and signed by both the University and the faculty member. Oral statements by either party cannot modify the terms of the Program, the Participation Agreement or the Release.

If a faculty member elects to and is approved to participate in the Program, but dies or is separated before payment is made, no payment will be made to the faculty member, their spouse or domestic partner, their children, their heirs or to their estate pursuant to this Program.
RELATED STATUTES, REGULATIONS, AND POLICIES
- Age Discrimination in Employment Act (ADEA)
- Employee Retirement Income Security Act (ERISA)
- University Phased Retirement Program
- University Early Retirement Program
- Faculty Code

Program Owner: Office of the Provost
Date Adopted by the Board of Trustees: October 28, 2022

In this section