BGSU sees up to $5M savings in early exits

12/4/2009

BOWLING GREEN - Bowling Green State University is looking to save at least $5 million by offering employees a year's salary to retire or leave the university early.

The "University Employee Separation Plan," approved yesterday by the BGSU board of trustees, is a voluntary buyout-style program available to full-time faculty and staff who have worked at BGSU for at least 15 years.

"When you have to do involuntary separations, those are very difficult," said Kenneth Borland, provost and vice president for academic affairs. "I find this to be very respectful of the individual who chooses to participate."

It is in addition to previous personnel cost savings programs that have included a hiring freeze, furloughs, and layoffs.

The costs savings are needed because the university anticipates an estimated $5 million-$10 million shortfall in state funding for next fiscal year, BGSU chief financial officer Sheri Stoll said.

"We know we are going to be facing some very significant challenges going into 2011," she said.

BGSU is calling it a separation program rather than a buyout program because the university is not buying service credits to help employees get the needed num-ber of years to retire through the state system, said Rebecca Ferguson, the university's chief human resources officer.

Instead, faculty and staff are being offered 100 percent of their base salary up to certain dollar amounts.

Faculty administrators can get up to $75,000, faculty up to $65,000, administrative staff up to $55,000, and classified staff would receive their salary up to $25,000.

For those who choose to retire and participate in the program, they will be paid in monthly installments for five years through a retirement account. The payments are in addition to the pensions they would normally receive.

Employees who participate but do not retire will receive monthly payments for eight years directly deposited into a bank account.

The university predicts that 138 of the 696 eligible employees, or 17 percent, will participate in the separation program.

If that happens, BGSU will save $1.7 million in the first year and $5.6 million over the eight-year payment period.

The university could save more money if more than 138 people leave through the program.

BGSU President Carol Cartwright said it was important to give faculty and staff options as they look to save costs.

"It also provides us with the very important opportunity to align our staffing patterns with the mission of the university," she said.

Officials say the employee separation program is being well received because it is voluntary and faculty and staff can choose to participate or not.

"What's huge about this is it's totally voluntary and that's the complete difference," said Ron Shields, chairman of the BGSU Faculty Senate.

He also said faculty were pleased they were included in conversations about the program at the preliminary stages and their input was included in the final plan.

BGSU predicts about 46 faculty members will leave through the program, which is about 15 percent of those who are eligible.

A provision in the program allows faculty who participate in the program to teach as adjunct instructors one course per semester for the upcoming school year.

That's important, Mr. Shields said, because it will allow experienced faculty to teach while the university looks for qualified replacements.

Sara Zulch-Smith, chairman of the BGSU Administrative Staff Council, said she's encouraging eligible constituents to see if the program is right for them.

"The reaction has been positive," she said. "I think the key is this is a voluntary program."

That's different than previous personnel cost savings measures that included mandatory one-week furloughs for more than 500 employees and the elimination of about 70 full-time positions and layoffs of about 20 classified full-time employees.

BGSU is contracting with Educators Preferred Corp., of Southfield, Mich., to help administer the employee separation program.

The university is paying them a base fee of $20,000 and $660 for each employee who participates.

If the 138 estimated employees participate in the program, the bill for Educators Preferred Corp. will be about $91,000.

Ms. Ferguson said it's worth the cost because the company has already done much of the legwork and will be doing all consultations with employees about whether the program is right for them.

An e-mail will be sent today to eligible employees, followed up with letters next week.

Employees have until Feb. 1 to decide about the offer.

The intent is to have participating employees leave the university by June 30, 2010, but there are options for employees to stay until June 30, 2011.

Contact Meghan

Gilbert-Cunningham at:

mcunningham@theblade.com

or 419-724-6134.