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Policy 1333
Retirement Incentive Plan for Faculty

Date of Current Revision: December 2013
Primary Responsible Officer: Director of Human Resources

1. PURPOSE

This policy exists to describe the James Madison University Retirement Incentive Plan for Faculty. The James Madison University Retirement Incentive Plan for Faculty provides supplemental retirement benefits to participating faculty members to meet critical university objectives. The objectives of the plan include:

  1. To provide the university with increased flexibility in the allocation of faculty positions among programs in order to better meet enrollment demands, curricular needs, and other university objectives.
  2. To facilitate the hiring of new faculty members who have credentials and experiences that will best support and enhance the mission of the university
  3. To help alleviate the financial strain of retirement that may prevent some faculty who would like to do so from retiring.

2. AUTHORITY

The Board of Visitors has been authorized by the Commonwealth of Virginia to govern James Madison University. See Code of Virginia section 23-164.6; 23-9.2:3. The Board has delegated the authority to manage the university to the president.

STATE OR FEDERAL STATUTE AND/OR REGULATION

The university's Board of Visitors (Board) has adopted the James Madison University Supplemental Retirement Plan for Faculty (SRPF), and its terms are consistent with this policy. The Board has given the President of the university the authority to execute the SRPF and any amendments required by the Internal Revenue Service in order for the SRPF to gain qualified status, provided said amendments are consistent with this policy.

3. DEFINITIONS

Administrative & Professional Faculty (A&P faculty)
Administrative faculty and professional faculty are normally referred to collectively, as both require advanced learning acquired by prolonged formal instruction and/or specialized training and work experience. However, the university recognizes administrative faculty and professional faculty as distinct position types.

Administrative Faculty positions are generally senior administrators who perform work related to the management of the educational and general activities of the university, for at least fifty percent of their work. Typically, administrative faculty serve in executive leadership roles such as vice president, provost, vice provost, dean, assistant or associate vice president, assistant or associate vice provost, or assistant or associate dean. Other administrative faculty roles can include (1) those responsible for the administrative direction of separately designated divisions or departments of institutional activity; (2) positions whose primary responsibility is to attract external funds; or (3) positions that are characterized by active, continuing involvement in formulating, interpreting and implementing institutional policy and exercise substantial independence, authority and discretion in areas such as program planning, design and allocation of resources. The organizational reporting relationship for administrative faculty is normally not lower than three levels below Executive Council positions. For Academic Affairs, this would include: Vice Provost/Dean (level 1), Academic Unit Head/Director (level 2) and Associate Director (level 3).

Professional Faculty require advanced learning and experience acquired by prolonged formal instruction and/or specialized work experience. Typical professional faculty positions are librarians, counselors, coaches, physicians, lawyers, engineers and architects. Other professional positions may support education, research, university life and other such activities. Professional faculty positions must require the incumbent to regularly exercise professional discretion and judgment and to produce work that is intellectual and varied and is not standardized.

Contractual Right to Employment
For the purposes of this policy, a contractual right to continued employment refers to a faculty member who has a contract with a termination date more than one year in the future.

Early Retirement
The offer of certain compensation and benefits associated with a faculty member retiring prior to what would be considered 'normal' retirement in terms of age and/or length of state service.

Instructional Faculty
Instructional faculty members have responsibilities that include teaching, research and service as the majority of their duties.

Supplemental Retirement Plan for Faculty (SRPF)
The SRPF is intended to be a qualified defined benefit plan pursuant to the Internal Revenue Code of 1986, as amended.

4. APPLICABILITY

This policy applies to instructional and A&P faculty members. To be eligible to be a participant under the plan, a faculty member must:

  • Be at least fifty (50) years of age; and,
  • Be tenured or have a contractual right to employment as defined above; and,
  • Be a full-time employee employed in a non-classified faculty position (or be on leave from such full-time status) with at least 10 years of full-time service with the university; and,
  • Satisfy any additional criteria established by the president or Board of Visitors of the university relating to participation under the plan.

5. POLICY

Participation in the plan is voluntary for both the university and the faculty member.

With the approval of the president the university may exercise its discretion to extend an offer of early retirement to an eligible faculty member when such an offer is strategically intended to enhance the university's achievement of its mission.

6. PROCEDURES

6.1 Selection of Participants
Criteria for selecting participants from among the eligible applicants will be established by the university based upon policy objectives. Selected participants will be recommended by the deans or directors to the Vice President, who will make recommendations to the president for final approval.

6.2 Retirement Contract
The university and each participant will enter into a retirement contract that will include provisions covering the following matters:

  1. The participant's retirement date. Retirement will result in the participant's:
    1. Permanent conclusion of full-time employment with the university;
    2. Permanent withdrawal from active membership in the Virginia Retirement System (VRS) by the VRS member;
    3. Permanent ineligibility for active VRS membership on account of employment by the university or any other agency of the Commonwealth of Virginia; and
    4. Permanent ineligibility for contributions to the accounts of ORP (Optional Retirement Plan) program participants by the university or any other agency of the Commonwealth of Virginia.
  2. The amount of the early retirement benefit, which will be one hundred fifty percent (150%) of the participant's final base salary as reflected in the records of the university, and the schedule of payments for such benefit, which will be over a period of five years in quarterly increments. (Under exceptional circumstances, the University and the Participant may agree to accelerate the distribution of the Participant's Benefit. If the University and the Participant agree, the Participant shall receive his or her Benefit over a two (2) to four (4) year period in lieu of a five (5) year period.)
  3. The payments will be made pursuant to the Supplemental Retirement Plan for Faculty described in 6.4 below. Such payments will be made if the participant becomes disabled prior to the retirement date, or if the participant dies on or after the retirement date. However, such payments will not be made if the participant dies prior to the retirement date. The participant has full responsibility for evaluating all factors relating to ending full-time employment at the university, including retirement income, health insurance and tax considerations.

6.3 Annual Payments
Aggregate payments pursuant to this policy in any year may not exceed five percent (5%) of the university's educational and general fund appropriation for faculty salaries and benefits for that year. However, the actual amount allocated by the university for payments pursuant to this policy in any year will be determined by the needs of the university, and the university will not be obligated to allocate the maximum amount described in the preceding sentence.

6.4 Qualified Defined Benefits Plan
Benefits under this policy will be provided through the James Madison University Supplemental Retirement Plan for Faculty (SRPF). Benefits under the SRPF are intended to supplement any retirement benefits the participant may be receiving from the VRS and/or the optional retirement program (ORP) and to help alleviate the financial strain of retirement.

7. RESPONSIBILITIES

The president is responsible for approving individual early retirement offers.

Deans, directors and Vice Presidents are responsible for identifying candidates for the Retirement Incentive Plan and making recommendations to the president.

The Human Resources Benefits Team is responsible for managing the Retirement Incentive Plan for Faculty (RIPF) contracts and providing one-on-one counsel with applicable faculty members.

8. SANCTIONS

Sanctions will be commensurate with the severity and/or frequency of the offense and may include termination of employment.

9. EXCLUSIONS

This policy excludes any and all employees who do not meet the criteria as established in Section 4 above.

10. INTERPRETATION

The authority to interpret this policy rests with the president, and is generally delegated to the Director of Human Resources.

Previous Version: March, 2012
Approved by the President: April, 2002

Index of Terms

Early Retirement
Retirement
Supplemental Retirement