ERIP Q & A - ASU



Arizona State University

Voluntary Separation and Retirement Incentive Program

August 15, 2003 to December 1, 2003

Questions & Answers

TABLE OF CONTENTS

1. Who is eligible to enroll in the VSRIP? 2

2. What are the benefits of VSRIP for me? 2

3. Do the VSRIP benefits include health insurance coverage? 2

4. How do I ensure continuation of my medical insurance? 3

5. What is the deadline for enrolling in the VSRIP? 4

6. Must I retire or resign on May 15, 2004 or June 30, 2004? 4

7. Will I be able to immediately draw retirement benefits if I enroll in the VSRIP? 4

8. How do I get information on retirement benefits? 4

9. Will my VSRIP payments be taxed? 5

10. May I have my VSRIP payments made through direct deposit into a bank account? 5

11. Can I purchase past service credit in ASRS and increase my retirement benefit? 5

12. Do my years of service to another university under the jurisdiction of the Board of Regents

or State of Arizona agency count in determining eligibility to participate in VSRIP? 6

13. Do I sign my FY 04 Notice of Appointment if I plan on leaving ASU before the end of the contract term? 6

14. I am on an academic year appointment, but my salary is paid over twelve months.

Will this impact the VSRIP payments that I am eligible to receive? 6

15. I am on an academic year appointment, but my salary is paid over twelve months.

How will leaving ASU before the end of the contract year affect my salary? 6

16. When would I receive my last paycheck if I enroll in the VSRIP? 6

17. What happens to accrued and unused vacation leave under the VSRIP? 7

18. What happens to accrued and unused sick leave under the VSRIP? 7

19. How can I determine if I am eligible to receive a payout under the RASL program? 7

20. How can I find out about my social security benefits and the effect of my VSRIP

payments on social security? 8

21. Can I come back and work for ASU again after I retire or resign? 8

22. I am an academic year appointee. If I retire or resign effective at the end of the Fall

2003 semester, may I continue to work until the end of the contract term, May 15, 2004? 8

23. I have grants that run through August 15, 2004 – can my retirement date be August 1

instead of May 15, 2004 or June 30, 2004? 8

24. Will my future VSRIP payments be payable to my heirs or beneficiaries if I die before receiving them? 9

25. I’m not certain that I want to participate in the VSRIP this year. Can I wait until next year? 9

26. I would like to retire under different terms. Is that something I can discuss with my dean? 9

27. I am currently on sabbatical for the full year (or will be going on sabbatical spring semester). ACD 705 states that I am required to “return to the university for a period of service equal to the length of the sabbatical leave”. Will that policy be waived for those who choose to participate in VSRIP? 9

State University

Voluntary Separation and Retirement Incentive Program

August 15, 2003 to December 1, 2003

Questions & Answers

1. Who is eligible to enroll in the VSRIP?

Board-appointed ASU tenured faculty and academic professionals with continuing status whose appointments are for .50 FTE or greater, and who meet the following requirements on or before December 1, 2003, are eligible for participation in the VSRIP:

Completion of 10 or more net years of service to ASU and attainment of age 55.

Net years of service: ASU subtracts any periods of time when the employee was not actually employed by ASU, such as leaves without pay or other forms of break in service. Sabbatical leaves with pay are still periods of service to ASU. ASU will apply the same principles to calculations of net years of service to determine eligibility for VSRIP.

2. What are the benefits of VSRIP for me?

The primary benefit to an eligible employee who chooses to voluntarily relinquish his or her employment at the university, either through resigning or retiring, is that he or she will receive a cash incentive payment that otherwise would not be available. The decision to participate in the VSRIP is solely that of the eligible employee subject to certain limitations stated in the VSRIP Policy Statement.

The cash incentive payment will equal one year’s base salary (AY/FY04). It does not include any one-time or other payments made in FY04, such as overload, summer salary, administrative appointment stipend or temporary salary increases. Tenured faculty holding a current academic administrative appointment through a fiscal year appointment will receive a cash incentive payment of 9/12’s of his or her fiscal year salary. The cash incentive will be paid in two equal installments on July 15, 2004 and January 15, 2005.

In addition to a cash incentive payment, if you choose to retire from ASU you will be considered an emeritus faculty or emeritus academic professional and receive all the benefits of that status under existing university policy (ACD 607-01). Participants who choose to resign from ASU are not eligible to receive emeritus status.

3. Do the VSRIP benefits include health insurance coverage?

No. The University is prohibited under Arizona state law from expending any public funds for the payment of all or any part of the premium of group health and accident insurance for its retirees. The only exception, as noted below in question 4, is where monies are authorized to be paid for an insured from the retirement plan from which the insured is receiving benefits. ASRS does provide a monthly subsidy to its retired members to be used towards the cost of health insurance.

4. How do I ensure continuation of my medical insurance?

• If resigning from ASU:

Like all benefits eligible employees terminating their employment with the University, participants in the VSRIP will be eligible under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to participate in the University’s health plan for a period of 18 months following the final day of employment. Under COBRA, the former employee is responsible for paying both the employer’s share of the monthly premium and the employee’s share of the monthly premium, and 2% of the total monthly premium is paid as an administrative fee. COBRA enrollment information and forms will be mailed to your home address following your last day of active employment with ASU. Your first monthly premium payment will be made at the HR Benefits Office, (480) 965-2701. Subsequent premium payments will be paid to a third-party administrator information on this will be included with your COBRA enrollment information. Additional information can be found at:

At the conclusion of 18 months, VSRIP participants who are members of ASRS and begin drawing retirement benefits from the ASRS, may participate in the health insurance plan administered by ASRS and may receive a monthly health insurance premium subsidy. You may access a description of the current health plan and premiums on the web at .

At the conclusion of 18 months of COBRA coverage, VSRIP participants who are members of the ORP (Optional Retirement Plan) or do not begin drawing retirement benefits from the ASRS Plan, must obtain their own medical insurance. There is not a medical conversion privilege under the COBRA plan. An ORP participant can only elect coverage under the ASRS plan if they retire from ASU and go directly into the ASRS plan.

• If retiring from ASU:

Arizona State Retirement System (ASRS) Plan - VSRIP participants who are members of ASRS and begin drawing retirement benefits from the ASRS, have two medical insurance plan options. First, they may participate in the health insurance plan administered by ASRS and will receive a monthly health insurance premium subsidy. You may access a description of the current health plan and premiums on the website at: .

Under the second option, a VSRIP participant who is a member of ASRS may elect coverage under the ADOA (Arizona Department of Administration) health insurance plan. This coverage is the same coverage offered to active employees, currently through CIGNA. ASRS will offer the same subsidy if electing this medical insurance as they would under the ASRS plan. To view plan and retiree premium rate details please check the ADOA website at:



ORP (Optional Retirement Plan) - VSRIP participants, who participate in an optional retirement program, may elect medical insurance under either the ASRS or ADOA plans as described above under the ASRS Plan. However, ORP participants are not eligible to receive the monthly health insurance premium subsidy through the ASRS benefit supplement.

5. What is the deadline for enrolling in the VSRIP?

Monday, December 1, 2003 is the last day the University will accept signed releases from eligible employees. The signed release (with your original signature) needs to be submitted to your departmental or college office before 5:00 pm. Please follow the instructions for enrolling in the VSRIP that was included in your packet of information. You should have discussed your enrollment with your chair or director before the enrollment deadline.

6. Must I retire or resign on May 15, 2004 or June 30, 2004?

Yes, unless you can identify a mutually acceptable date with your chair and dean. If you are discussing an earlier effective termination date with your chair and dean, you need to ensure that the date you have selected appropriately provides for the smooth transition of your responsibilities to someone else. The retirement date cannot be after June 30, 2004.

7. Will I be able to immediately draw retirement benefits if I enroll in the VSRIP?

Not necessarily. The VSRIP has no effect on your entitlement to draw retirement benefits from your retirement plan. The rules affecting how much and when you may begin receiving retirement payments are completely independent of the VSRIP. This is true for all retirement plans. Before you enroll in the VSRIP, you are strongly encouraged to contact your retirement plan to find out more about your retirement benefits.

8. How do I get information on retirement benefits?

If you would like to obtain an estimate of your retirement benefits, you will need to contact a representative with the retirement plan that you have selected. The ASU HR Benefits staff cannot provide you with this information. If you are uncertain as to which retirement plan you have selected, look at your most recent pay stub and this information will be listed.

If you are a member of the Arizona State Retirement System (ASRS), you may view information at its web site: or schedule an appointment with an ASRS representative at its offices, which are located at:

3300 North Central Avenue

Phoenix, AZ 85012-0250

(602) 240-2000

If you are a member of the Optional Retirement Program (ORP), contact information for the approved companies follows, including local office information, if applicable:

TIAA-CREF:

Northern Trust Bank Tower

2398 East Camelback Road, Suite 1000

Phoenix, AZ 85016

602-553-7700 or 1-866-548-3705

FIDELITY:

Chandler Pavilions Scottsdale Center

7001 West Ray Road 7373 N. Scottsdale Road, Suite 182A

Chandler, AZ 85226-1517 Scottsdale, AZ 85253

800-544-7095 800-352-9793

VALIC:

1-800-448-2542

VANGUARD:

1-877-662-7447

ING:

Or call the local ING representative, Steve Gaustad 602-328-8622.

9. Will my VSRIP payments be taxed?

Yes. All VSRIP payments will be considered income by the Internal Revenue Service and subject to income-related taxes and deductions. We strongly encourage you to consult with your own tax advisor and a representative of your retirement plan to assess your own individual financial situation.

ASU will withhold all applicable federal income tax, Arizona state income tax, and FICA. Please note that receipt of payments following resignation or retirement does not make the VSRIP participant eligible for employment related benefits such as accrual of vacation leave, sick leave, retirement contributions or additional credit for length of service.

10. May I have my VSRIP payments made through direct deposit into a bank account?

Yes. If your current paychecks are being handled through direct deposit, the University will automatically send your VSRIP payments to the same direct deposit account. If you have not used direct deposit before, you need to fill out a form specifying the account you wish used for direct deposit. For further information on arranging for direct deposit, please contact Joyce White, HR Payroll Manager, at (480) 965-2701 if your department is on the Main Campus or East Campus. Please contact Human Resources at (602) 543-8400 if your department is on the West Campus.

11. Can I purchase past service credit in ASRS and increase my retirement benefit?

Yes. Subject to the stated conditions of the ASRS plan, active members may be able to purchase service credit for either past active military duty with an honorable discharge, for service worked under another public employer in the United States and/or previously forfeited ASRS service credit. To learn more, go to the Members Handbook at the ASRS website and refer to pages 13 –16 and 33. This would also be a good topic to discuss on an individual basis with the ASRS representatives who visit the ASU campus during the fall semester. The purchase of past service credit is a private matter between the active member and ASRS. While in active employment status, you would need to: (1) make a request to ASRS to purchase past service credits, (2) complete and return an affidavit from ASRS and (3) receive and sign a letter agreement with ASRS that specifies the exact cost to purchase the past service credit.

12. Do my years of service to another university under the jurisdiction of the Board of Regents or State of Arizona agency count in determining eligibility to participate in VSRIP?

No. Any years of service to either University of Arizona or Northern Arizona University or another state of Arizona agency will not count in determining whether you have completed 10 years of service to the University.

13. Do I sign my FY 04 Notice of Appointment if I plan on leaving ASU before the end of the contract term?

Yes. You should sign your notice of appointment and note in the comment section your anticipated date of retirement or separation.

14. I am on an academic year appointment, but my salary is paid over twelve months. Will this impact the VSRIP payments that I am eligible to receive?

No. The calculation of your VSRIP cash incentive is based on your FY04 base salary for the academic year regardless of which pay option you have chosen. The base salary rate does not include summer salary, overload, administrative stipends, or temporary salary increases.

15. I am on an academic year appointment, but my salary is paid over twelve months. How will leaving ASU before the end of the contract year affect my salary?

Some employees who are employed for an academic year elect to be paid over 12 months. This means that salary paid in July and early August will not be earned until the employee begins work in August. Additionally, salary paid in the last month of the year, June, was earned prior to the pay period covered by the payment. When an academic year employee retires, or otherwise ends the employment relationship with the University, it is normal practice to calculate whether ASU owes the employee salary or whether the employee owes ASU reimbursement for payments made but not earned.

The date you choose to retire (May 15th or June 30th) effects dates for applying for retirement benefits and sick leave. You should set up an appointment to talk with an HR benefits specialist to go over your options. For academic year appointees who have elected to be paid over 12 months, a lump sum payment of the May 31st, June 15th and June 30th pay periods may be made with the May 15, 2004 payroll.

Under the VSRIP, if you anticipate retiring at some time other than at the end of: (a) the fiscal year, June 30, 2004, or (b) the academic year, May 15, 2004, you may need to have your salary payments adjusted to ensure that you are not underpaid or overpaid. For faculty and academic professionals on the Main Campus or the East Campus, Joyce White, HR Payroll Manager, (480) 965-2701 (Joyce.C.White@asu.edu) can help you calculate the effect of your retirement date on your salary payments. For faculty and academic professionals on the West Campus, please contact Carolyn Tucker, HR Payroll Coordinator, (602) 543-8408 (carolyn.tucker@asu.edu).

16. When would I receive my last paycheck if I enroll in the VSRIP?

Absent your setting an earlier date of termination than May 15, 2004, you would receive your final paycheck in the pay period for May 15, 2004 if you have an academic year appointment and have chosen pay option 9/9. Fiscal year appointees and academic year employees being paid 9/12 would receive their final paycheck on June 30, 2004.

17. What happens to accrued and unused vacation leave under the VSRIP?

Faculty on AY appointments do not accrue vacation hours (ACD 704-01). FY appointees do earn vacation hours per the provisions of ACD 704-02. For employees who have or accrue vacation hours, a lump sum payment of the accrued balance up to the stated cap of the policy (176 hours), less all applicable federal and state withholding, can be made in the final paycheck. Payment is made at the individual’s current hourly rate of pay.

18. What happens to accrued and unused sick leave under the VSRIP?

The University makes no cash pay out for unused sick leave. The VSRIP does not alter this practice.

The cashing out of sick hours when a benefits-eligible employee retires from the university is a separate and independent program from the VSRIP and is governed by statutory provisions and is administered by the state department of administration. This separate program is called the RASL (Retiree Accumulated Sick Leave), ARS §38-615 and 38-616.

19. How can I determine if I am eligible to receive a payout under the RASL Program?

Eligibility to receive a payout under the RASL Program is dependent upon an employee (a) retiring from the university and (b) having a balance of accrued and unused sick hours of not less than 500 at the date of retirement. To determine your current balance of accrued and unused sick hours, look at your most recent pay stub. Individuals who have 499 hours of sick time or less forfeit those hours upon either resignation or retirement.

Eligible participants who retire from the university (actually start to draw benefits from ASRS or annuitize not less than $10,000 from ORP) and who have an accrued and unused balance of 500 to 1500 sick hours are eligible to participate in the RASL (Retirement Accumulated Sick Leave) program that is administered by the state department of administration. Under RASL, the individual receives a cash payout for the unused sick hours. The total dollar value is calculated at:

Current hourly rate of pay x actual number of unused hours x applicable % rate

500 to 749 hours = 25%

750 to 999 hours = 33%

1000 to 1500 hours = 50%

Note: the statute places a $30,000 cap on the payout, limiting the annual payout to $10,000 over not more than 3 years. For more information about this program, see



If you would like to obtain an estimate of your RASL pay out amount from Human Resources, please contact:

Main and East Campus: HR Benefits staff at (480) 965-2701

West Campus: Leslie Thomas-Dewar at (602) 543-8406

For specific information on the RASL payment calculation, contact state of Arizona General Accounting Office (602) 542-5601.

20. How can I find out about my social security benefits and the effect of my VSRIP payments on social security?

Contact the Social Security Administration via the Internet or at the address or phone number shown below. (You can locate the office nearest you at this web site) The general toll-free phone number for the Social Security Administration is 1-800-772-1213. Valley office locations include:

Scottsdale Phoenix Glendale

SUITE B-120 1ST FLOOR 16241 N TATUM BLVD 5907 W. KINGS AVE.

3200 N HAYDEN ROAD PHOENIX , AZ 85032 GLENDALE, AZ 85306

SCOTTSDALE, AZ 85251

HOURS: Monday – Friday 9:00 a.m. - 4:00 p.m.

21. Can I come back and work for ASU again after I retire or resign?

As a condition of participating in the VSRIP, each participant agrees to relinquish, as applicable, all tenure rights, all right to continued employment, all right to re-employment or future employment by the Board. The VSRIP does not; however, prohibit an eligible participant from applying for future employment at the University. Any decision to re-employ an individual would be at the discretion of ASU and based on the needs of the university. Requests for re-hire will be subject to the approval of the university president or his designee. The VSRIP does prohibit any University representative from making any informal or formal agreement or arrangement to rehire an individual in the future.

Participants should be aware that each of the retirement plans has certain stated restrictions concerning a member or participant’s ability to seek or receive benefits while employed or seeking re-employment at the university. If you are drawing retirement benefits your plan may limit your ability to receive those benefits if re-employment with the university occurs. For ASRS members, please see the ASRS Members Handbook. Before making plans for re-employment you are strongly advised to consult with your retirement plan.

22. I am an academic year appointee. If I retire or resign effective at the end of the Fall 2003 semester, may I continue to work in a different capacity until the end of the contract term, May 15, 2004?

No. Your resignation or retirement date is the date you enter on your Agreement under the VSRIP. If you are a participant in one of the optional retirement plans, there can be no formal or informal agreement or arrangement that you will be re-employed by ASU. If you are a member of the ASRS and are leaving the university prior to attaining “normal retirement” then you may not seek re-employment with ASU for a period of 60 calendar days following the date of termination.

23. I have grants that run through August 15, 2004—can my retirement date be August 15 instead of May 15, 2004 or June 30, 2004?

No. If you agree to participate in the VSRIP your employment with the university must end no later than June 30, 2004. See also the answer to question 21 above.

24. Will my future VSRIP payments be payable to my estate if I die before receiving them?

Yes. The VSRIP agreement you sign on or before December 1, 2003, obligates the University to make the payments under the program. Should you die prior to receiving all or part of the benefits, we will make the cash incentive payable to your estate.

25. I’m not certain that I want to participate in the VSRIP this year. Can I wait until next year?

VSRIP is a “window plan” and is only being offered for the time period of August 15, 2003 through December 1, 2003. A similar plan will not be offered next year. When the Board of Regents approved the policy (ABOR 6-607) allowing the University to design and implement this Plan, the Common Elements Document which accompanied the policy provides that no institution can offer a window plan more frequently than once in three years.

26. I would like to retire under different terms. Is that something I can discuss with my dean?

No. Academic administrators may not negotiate any retirement agreement while the VSRIP is in effect, without the express approval of the President or his designee.

27. I am currently on sabbatical for the full year (or will be going on sabbatical spring semester). ACD 705 states that I am required to “return to the university for a period of service equal to the length of the sabbatical leave.” Will that policy be waived for those who choose to participate in VSRIP?

If you find yourself in this circumstance, please contact your dean to discuss the application of the return to service provision of ACD 705.

Further questions, contact Cecilia Hook in the Provost’s Office.

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