Guest tonjer Posted January 29, 2003 Posted January 29, 2003 If an employer implements a voluntary early retirement policy for a specified period of time (8 years) with the intent to terminate the policy at that time (or anytime prior if it desires), is this policy/program subject to ERISA? Any cites/authorities would be greatly appreciated! Alternatively, is there a specific way such a policy can be drafted so that ERISA is not implicated? Thank you
AndyH Posted January 29, 2003 Posted January 29, 2003 Would you describe the program please? Does this program include increased or subsidized retirement plan benefits?
Guest tonjer Posted January 30, 2003 Posted January 30, 2003 The program will allow tenured staff to retire early, if they are age 64 with 20 years of service (I don't know how early retiring at age 64 really is, but...) If a person chooses to retire early, they will receive 60% of their previous year's salary (excluding summer work and overtime) paid over the course of one year, plus the college will pay them for one year of health/dental insurance. Thank you!
david rigby Posted January 30, 2003 Posted January 30, 2003 Is this a state-owned university? I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
mbozek Posted January 30, 2003 Posted January 30, 2003 There are DOL opinion letters going back 15 years which held that early retirement programs for faculty of private universities are subject to ERISA. If the program pays severance benefits for no more than 24 months the plan will be a welfare benfit program and not a pension plan. mjb
Guest tonjer Posted January 30, 2003 Posted January 30, 2003 This is a private university. Benefits will be paid for one year only. Then, the plan will be considered a welfare plan?
mbozek Posted January 31, 2003 Posted January 31, 2003 see DOL reg 2510.3-2(B) for requirements of a severance plan. Also there are separate tax issues- Waiver of tenure rights may not be taxable but severance payments are. You need to consult with tax and ERISA counsel to review these issues and for preparation of waivers. mjb
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