Proposed Revision to 712.2 - Voluntary Termination Incentive





Board policy:


The Board of Regents adopts the following voluntary termination incentive for the 1994-1995 biennium.


I.          Eligibility:  To be eligible for a voluntary termination incentive an employee must not be excluded by Section II and must:


            A.         Have been employed full time by the Board of Regents on February 1, 1993; and


            B.         1.         Be an active member of the Teachers Retirement System who is eligible for normal service retirement under 19-4-801 MCA or 19-4-802 MCA; or


                        2.         Be a participant in the Optional Retirement Program established by 19-21-101ff MCA who is at least 50 years old on the date the participant terminates employment; and


            C.         Have a contract with the Board of Regents for full time employment subsequent to July 1, 1993 for a term equivalent to a complete academic year or fiscal year; and


            D.         Indicate in a writing delivered to the employer at least 45 days before the date of termination (which 45 days may be waived in whole or in part by the school if the school would benefit thereby), but no later than the end of business on December 1, 1993, the employee's irrevocable decision to leave employment no earlier than July 2, 1993, and no later than


                        1.         June 30, 1994; or


                        2.         For those holding academic year contracts, the end of the school's 1993-94 academic year, unless the school offers the person a summer term contract, in which case employment must end at the end of summer session; and


        E.     Not be terminated for cause, either before or after giving the notice referred to in paragraph D above.


II.      Exclusions:  Notwithstanding the above eligibility provisions, the voluntary termination incentive is not available to:  (1) Any employee who prior to July 1, 1993, is given notice that his or her contract of employment covering the period subsequent to July 1, 1993, will be the final contract of employment; or (2) Any employee who prior to July 1, 1993 gives notice that he or she will not honor in full the contract of employment to which the employee has a right for AY or FY 1993-94; or (3) Unclassified employees for whom there generally are not written procedures in contract or policy for notice of non-renewal, e.g. visiting professors on limited term contracts, or loaned executives on specific term appointments; or (4) Any employee for whom the receipt of the incentive is deemed by the school to be inconsistent with the general purpose of this policy as expressed in Section VII.


        Employees on leave of absence who have an absolute right to return to employment are eligible if they meet all other conditions.


III.     Amount of the Incentive:  An eligible employee may receive a voluntary termination incentive in the following amount, which amount shall be calculated on the basis of the final year's salary:


        A.     For members of the Teachers' Retirement System (TRS), an amount, when combined with employer contributions due the Teachers' Retirement System under 19-4-101(5)(d) as a result of the incentive, if any, equal to 14.503% of final year's salary for each 5 full years of creditable service within the Teachers' Retirement System, not to exceed 43.509% of final year's salary.


        B.     For participants in the Optional Retirement Program (ORP), an amount equal to 12% of final year's salary for each 5 full years of service with the Montana University System, not to exceed 36% of final year's salary.


        C.     Definition of "final year's salary":  For purposes of this policy final year's salary means the base compensation on an employee's final AY or FY contract as reported to or approved by the Board of Regents and evidenced by the Regents' minutes; exclusive of any additional compensation such as stipends, overload pay, extra compensation, or any other type of special or severance payment or cashout of previously earned benefits, whether reported to the Regents or not.


        D.     The incentive shall not be pro-rated for periods of service less than 5 years.


IV.    Tax Status of the Incentive:  The incentive shall generally be considered as current taxable income by the employer.  However, employees may wish to consult personal financial planners for assistance in exploring the most effective method of minimizing taxes on current income in light of each individual's tax situation.  The units may cooperate with the employee in this matter, consistent with the unit's obligations under applicable tax law, but proper tax treatment of current income is ultimately the employee's responsibility.


V.     Re-Employment:  A person who receives the incentive and returns to employment with a unit under the jurisdiction of the Board of Regents shall refund the incentive unless such subsequent employment is consistent with the Regents post-retirement employment policy or 19-4-804 MCA.


VI.    Deferral of Termination:  A unit or center may request an eligible employee to defer termination beyond the employee's requested date of termination if:


        A.     The employee's termination would give rise to a hardship that seriously inhibits the school's ability to deliver an academic program or perform some other function related to the school's mission; or


        B.     The employee's termination would create a significant financial hardship for the school which compromises the school's ability to perform functions related to the school's mission.


        In no event may a school and an eligible employee agree to defer termination beyond September 1, 1996.


VII.   General Guide to Application of this Policy:  This policy is intended to create a benefit dedicated to persons who would not otherwise terminate employment with the Board of Regents (or participating community colleges) between July 2, l993 and June 30, 1994.  The incentive is not intended for those who by word or action have clearly indicated prior to the adoption of this policy that they will terminate employment during that period regardless of this incentive.  In such cases the incentive, if paid, would be a windfall to the terminating employee without a commensurate benefit to the school.


VIII.   Appeals:  In the event of a dispute as to the meaning or applicability of this policy the appeal provisions of Regents Policy 203.5.2 shall be used to obtain a final determination.


IX.     Community Colleges:  Community colleges under the supervision of the Board of Regents are authorized to grant voluntary termination incentives in accord with this policy upon an affirmative vote of the local board of trustees of the community college district.


X.     Reporting:  By November 1, 1994, each campus, vocational-technical center and participating community college shall forward to the Commissioner of Higher Education a report containing the following:


        A.     A list of all positions for which a voluntary termination incentive was paid, including the date of termination, the final salary of the terminating employee, and the amount of the incentive.


        B.     A list of all positions vacated with an incentive which have been filled, including the date of refilling and the salary of the replacement.  If the position was filled by someone other than a single full time employee that should be indicated and explained.


        C.     A list of all deferred incentives which are pending, including the date to which the incentive is deferred, the approximate amount of the anticipated incentive and the reason for the deferral.


        D.     The impact of not refilling certain positions vacated by the incentive.  For example, were the duties reassigned, was the function dropped, etc.?


        E.     The net cost or savings resulting from the incentives.


XI.     Authority:  These procedures are adopted pursuant to the general instruction to define a voluntary termination incentive in Chapter 567, Laws of 1993 [HB 517], and, in the event there is any inconsistency between these policies and Chapter 567, pursuant to the authority granted to the Board in Article X, Section 9 of the Constitution.


XII.    PERS Employees:  Employees of the Board of Regents who are active members of the Public Employees Retirement System may also be eligible for a voluntary termination incentive.  Such eligibility will be determined by statute or by rules adopted by the Department of Administration.


XIII.   Effective Date and Expiration:  This policy is effective on July 2, 1993.  This policy is repealed September 1, 1994.





           Item 79-002-R0593, Voluntary Termination Incentive Policy, June 7, 1993.