More than 30 East Central College employees will have the opportunity to take advantage of a retirement incentive approved by college trustees at their meeting Monday.
The retirement incentive includes 33 percent of base salary for the current year or $750 per year of service, paid in two annual installments beginning in August of 2013.
Retirees would also receive the cash equivalent to one year of health, dental and vision insurance premium. Retirees could elect to continue insurance coverage under the college plan but would be responsible for the monthly premium.
To be eligible for the incentive, as of June 30, 2013, employees must have 10 years of full-time service with the college and be eligible for normal retirement or early retirement as defined by the Public School Retirement System (PSRS) or Public Education Employee Retirement System (PEERS) of Missouri. PSRS is the retirement system for faculty and other salaried staff. PEERS is the retirement system for hourly staff.
For both PSRS and PEERS, normal retirement is defined as someone 60 years of age with five years of credit; an employee of any age with a minimum of 30 years of credit; or an individual whose age plus years of service equals 80 or more (the Rule of 80).
To be eligible for early retirement an employee would be under age 55 with at least 25 but fewer than 30 years of credit and not qualify for the Rule of 80. The retirement system will not offer the “25 and out” option after July 1, 2013.
Age reduced eligibility for early retirement applies to employees who do not qualify for the Rule of 80 but are age 55 or older with at least five years of credit, or employees of any age with at least 25 years of credit.
Employees will have until January 15, 2013, to notify the college of their intent to participate in the incentive. Funding will take place over two years, beginning July 1, 2013.
“Offering a retirement incentive provides the opportunity for the college to realize significant payroll savings in the future,” said Wendy Hartmann, director of human resources at ECC. “These savings will better position the college to add faculty and staff where necessary, and to continue to improve compensation and benefits of current employees.”
There are currently 31 employees who would be eligible for the retirement incentive. The potential impact to the college in the first two years would be a net savings of $3,698 per year due to the two-year payout.
Substantial savings would be evident in fiscal year 2016 when ECC could see a net savings of $310,099. The projection is based on replacement costs, incentives, insurance costs and 21 employees participating in the incentive.
The actual impact to the college will be determined by several factors, including the number of eligible employees who decide to participate in the incentive, the number of positions replaced at the current level, actual replacement cost of those positions, salary increases approved in subsequent years and insurance renewal rates.
Page 2 of 2 - Employee Insurance and Personnel
In another personnel related matter, trustees authorized renewal of health insurance with Coventry, the college’s current carrier, at a rate increase of 4.6 percent for 2013. Vision insurance will again be provided through VSP with no change in the rate.
There will be no change in the rates for life, accidental death and dismemberment and long-term disability coverage through Reliance Standard. Schroepfer Bauer Insurance was the broker.
Trustees also authorized renewal of the United Healthcare Medicare Advantage PPO as the group Medicare Part C plan offered to ECC retirees. The plan involves no premium for either the college or the individual.
Approval was also given to the list of adjunct instructors for this fall semester.