Board of Trustees approves severance plan

By Kay Nguyen

Nearly 400 OU employees are eligible for an early retirement package being offered by the University. Proposed at a Dec. 2 finance, audit and investment committee meeting, the Employee Severance Plan is designed to be a cost-cutting measure for the Oakland University administration. The plan was approved at the Dec. 9 board of trustees meeting before it was offered to employees.

The Educators Preferred Corporation will help in the implementation of this initiative. The Plan applies to all full-time employees at OU who have worked on campus for over 15 years.

“We are grateful for the exceptional work and dedication of all our employees — both those who will be with us for years to come and those who will choose to embark on the next phase of their personal and professional lives,” OU President Gary Russi said in an e-mail sent to all faculty and staff. The benefit will be given to those who opt to take it over a 5-year period.

There are no age restrictions and every recipient could possibly make up to 100 percent of their base salary, but there are caps on how much staff and faculty can receive.

For instance, the benefit for administrators and deans cannot exceed $90,000. The cap is $35,000 for those in clerical and technical services and campus maintenance and trade. Faculty may not receive more than $75,000.

“The primary strategic purpose of the voluntary plan is to reduce compensation costs,” Ron Watson, assistant vice president for university human resources, said at the board of trustees formal session. “Further benefits to the university include strategically managing employment levels and employee promotions — vacated positions will be evaluated by the administration on a case-by-case basis.”

Those eligible have between Tuesday, Jan. 18 and Monday, March 7 to make a decision regarding the offer.   Karen Miller, associate professor and chair of the history department, is eligible to take advantage of the plan. She has been at OU since 1993.

“Some departments could be potentially very badly hurt by this,” Miller said. “If a department had a large number of senior people and those people are not replaced, that can do a lot of damage to the curriculum as far as what classes are offered.”

However, Miller said it seemed like a “perfectly okay” thing and that “there is incentive built into it.”

Physics professor David Garfinkle said full-time faculty often have a deeper grasp on their subject and can often contribute more to the university because of that commitment.

“It’s possible that (The Employee Severance Plan) would have a negative impact on scholarship and service,” Garfinkle said. “It’s even likely that what will happen is that it will have negative impacts on the quality of instruction.”

Trustee Jayprakash Shah was the only board member to vote against the plan, citing concerns for the quality of replacement faculty and turnover rate. The rest of the board voted to approve the resolution.

Garfinkle, president of the OU chapter of the American Association of University Professors, said  that because the missions of the union is to negotiate the contract between faculty and the administration, the issue of retirement is not exactly a union issue. At the finance, audit and investment meeting, trustee Jacqueline Long did ask whether collective bargaining units has looked over the Plan.

According to Garfinkle, unions were not involved with the planning of the Plan. He said he was unable to thoroughly go through documents given to him before the meeting, but has since read through and finds no violation of faculty rights in them.

Projected savings would be $1.3 million over the next eight years for the university. About $2 million in up-front costs will have to be absorbed by the university in order to pay the benefits and fees for each retiree, since it costs $94 each month per retiree in fees to implement.

Both Garfinkle and Miller believe it will be a few years before the impact of the one-time deal can be measured. The board of trustees amended the resolution to require reports at board meetings over the next two years in regards to the impact of the plan and whether it has been successful.