Phased Retirement

414.1 VOLUNTARY PHASED STAFF RETIREMENT

Voluntary Phased Staff Retirement is a means of transitioning retirement-eligible staff from full-time employment to retirement by permitting a reduced work schedule while preserving eligibility for many valuable University benefit programs. Requests to be placed on Phased Retirement must be voluntarily initiated by the staff member. Department managers and supervisors cannot impose a Phased Retirement agreement on a staff member. Phased Retirement enables the staff member’s department to retain the knowledge and skills of the staff member during a period of transition while also aiding the staff member in meeting their personal goals/obligations.

414.2 ELIGIBILITY

To be eligible for Phased Retirement, a staff member must be eligible for retiree health benefits under the University's Health and Welfare Plan for Retirees and Disabled Employees by meeting the age and service requirements under that plan, as follows:

General rule: The general rule is that a staff member is an eligible retiree if he/she meets the "Rule of 75"—that is, the sum of the staff member’s age and years of service totals at least 75—and the staff member (i) has attained age 55 and completed 15 years of full-time and continuous service or (ii) has attained age 62 and completed ten years of full-time and continuous service.
Special rule for certain "grandfathered" staff members: Even if the staff member does not meet the Rule of 75 described above, he/she meets the eligibility requirements if, as of December 31, 2008, the staff member (i) has attained age 55 and completed 15 years of full-time and continuous service or (ii) has attained age 62 and completed ten years of full-time and continuous service.

The rules under the University’s Health and Welfare Plan for Retirees and Disabled Employees, including the rules that apply for purposes of calculating years of service, apply for purposes of the above eligibility requirements.

Staff members who are part of collective bargaining agreements are not eligible for Phased Retirement.

IMPORTANT: The existence of the Voluntary Phased Staff Retirement Program does not give staff members a contractual right or entitlement to Phased Retirement or continued employment. The University has sole discretion to approve or deny any request for Phased Retirement or terminate such arrangement at any time for any lawful reason.

414.3 TERMS OF PHASED RETIREMENT

Subject to the University's specific agreement to the terms of a particular Phased Retirement appointment, a Phased Retirement shall be subject to the following terms and conditions:

Duration: Phased Retirement may continue for a period of up to two years at which time the staff member will have to retire as agreed. The Phased Retirement arrangement should be reviewed every six months for continued appropriateness (though it may be reviewed at any time by either Human Resources or the department). If the arrangement is no longer meeting the needs of the department, the staff member may choose to retire or return to work on a full-time basis in the same or an equivalent position with equivalent pay, benefits, and other terms and conditions of employment. If the arrangement is no longer meeting the needs of the staff member, he/she may choose to retire or discuss alternative arrangements with the department; based on business needs, the department will make the final decision on alternative arrangements, if any.
Reduction in Work Schedule: Phased Retirement involves a reduction in work schedule. The reduced work schedule shall not be less than 60% of the staff member’s prior work schedule.
Salary: A staff member's compensation during Phased Retirement shall be reduced in proportion to the reduction in level of work (e.g., the compensation of a staff member working full-time and goes to a 60% Phased Retirement schedule would be 60% of the staff member's full-time compensation). During the period of Phased Retirement, staff members in Phased Retirement shall be eligible for promotional, merit or other compensation changes based on the reduced compensation.
Benefits: With a few exceptions as described below, if a staff member is approved for Phased Retirement, the staff member will be eligible for all University benefit plans and policies just the same as if the staff member were a full-time staff member. The exceptions are as follows:
1. If a benefit plan requires a certain amount of service in order to receive a benefit (e.g., the Retirement Allowance Plan requires 1,000 hours of service in a 12-month period to accrue a year of service), a staff member will not receive a benefit under that plan unless the staff member satisfies the applicable service requirement.
2. If a benefit plan provides a benefit based upon the amount of a staff member's compensation (e.g., life insurance benefits are based upon benefits base compensation), the staff member's benefit will based on the staff member's lower compensation during the period of Phased Retirement.
3. If a leave policy plan requires a certain amount of service (e.g., eligibility for benefits under the Family and Medical Leave Act requires 1,250 hours of service in a 12-month period), a staff member will not be entitled to receive leave under that policy unless the staff member satisfies the applicable service requirement.
4. Paid time off (including sick leave and holidays) will be prorated based on the staff member’s reduced schedule.

Refer to Section 414.4 Benefits During Phased Retirement.

Retirement: The staff member agrees to retire from his/her current position at the end of the Phased Retirement period. The staff member will not be eligible to be rehired into the same Penn school/center/department for at least two years following the end of the Phased Retirement period.
Not Eligible for Other Termination Benefits: Staff members who have entered into Phased Retirement shall not be eligible for other termination benefits under any other University plan, policy, or arrangement. However, the staff member may be entitled to benefits under the University's Position Discontinuation and Staff Transition (PDST) Policy if the staff member's position is discontinued under the PDST Policy during the Phased Retirement period due to budgetary or other reasons unrelated to the Phased Retirement arrangement. Pay continuation benefits under the PDST Policy will be based on the staff member’s regular base pay prior to Phased Retirement, if the position discontinuation occurs within the first six months of the Phased Retirement period. If the position discontinuation occurs after the first six months, pay continuation benefits will be based on the staff member’s reduced base pay at the time the notice of the position discontinuation is given.
Not Grievable: The Staff Grievance Procedure (Policy 620) does not apply to any decisions regarding Phased Retirement requests. Also, Phased Retirement decisions are not subject to review in the benefits appeal process.

414.3 APPLYING FOR PHASED RETIREMENT

The staff member must apply for Phased Retirement. The focus of this application process is for the staff member and the University to engage in a discussion about whether a staff member is an appropriate candidate for Phased Retirement, and, if so, how the staff member’s job duties will change during the period of Phased Retirement to meet the needs and interests of both the staff member and the University.

If a staff member determines that he/she is interested in Phased Retirement, the staff member should first contact Human Resources at 866-799-2329 to confirm that he/she meets the eligibility requirements for Penn’s retiree health program. The staff member should then make an initial Phased Retirement proposal to his/her immediate supervisor (see the "Phased Staff Retirement Proposal Template" at the bottom of this page). The initial proposal may be verbal or in writing, and should include a general description of the proposed work schedule during the period of Phased Retirement, the duration of the Phased Retirement period, and how the staff member’s job duties will be restructured in order to satisfy the needs of his/her position and the needs of the department during the Phased Retirement period. A Phased Staff Retirement Proposal template can be found here.

Following discussion of the initial proposal, if the staff member and his/her immediate supervisor agree to pursue the Phased Retirement, they should prepare a draft Phased Staff Retirement Agreement and a revised job description for approval by the appropriate senior administrator. Click here to download a sample Phased Staff Retirement Agreement.

The home department enters the request into Workday to "change job/phased retirement" and attaches the Phased Staff Retirement Agreement and revised job description to the request. Workday automatically routes the request to the next level of approvals, including Human Resources. The senior administrator or designee shall make the final (and binding) decision to approve or deny the staff member’s Phased Retirement application.

Copies of the signed Phased Retirement agreement should be given to the staff member and retained in the departmental files. Human Resources will place a copy of the agreement in the staff member’s official personnel file.

At the end of the Phased Retirement period, the staff member must retire and commence participation in the Retiree Health and Welfare Plan and any other University benefit programs that cover retired staff members (such as tuition benefits) see:

Tuition Assistance for Faculty and Staff - Policy 406, Tuition Benefit for Dependent Children Attending the University at Pennsylvania - Policy 407, Tuition Benefit for Dependent Children Attending Other Colleges and Universities (Direct Grants) - Policy 408 and Tuition Benefits for Spouses Attending the University of Pennsylvania - Policy 409).

414.4 BENEFITS DURING PHASED STAFF RETIREMENT

With the few exceptions as described in Section 414.3.4, if a staff member is approved for Phased Retirement, the staff member will be eligible for all University benefit plans and policies just the same as if the staff member were a full-time staff member.

Medical: Eligible for the University contribution toward the monthly premium cost of your existing coverage.
Dental: Eligible for University contribution toward the monthly premium cost of your existing coverage.
Vision: The full cost (based on University group rates) is paid by the staff member.
Life Insurance: $50,000 Basic Life Insurance policy paid by the University.
Supplemental Life Insurance: Up to five times base salary, the full cost (based on University group rates) is paid by the staff member.
Pre-Tax Expense Accounts: Eligible to contribute to the Health Care and Dependent Care Pre-Tax Expense Accounts
Short-Term Disability: Eligibility is the same as for regular full-time staff.
Long-Term Disability: Eligibility is the same as for regular full-time staff.
Sick Leave: Eligibility is the same as for regular full-time staff. Sick leave is accrued in hours and prorated based on scheduled hours.
Paid Time Off (PTO): Eligibility is the same as for regular full-time staff. PTO is accrued in hours and prorated based on scheduled hours.
Holidays: Prorated based on scheduled hours, time off with regular pay is granted in accordance with University policy for all holidays, including the special winter break between Christmas and New Year's Day, which fall on the staff member's regularly scheduled workdays. No additional payment is made for holidays which fall outside regularly scheduled workdays.
Leave with Pay: Eligibility is the same as for regular full-time staff. Prorated based on scheduled hours; jury duty and bereavement leave.
Leave without Pay: Eligibility is the same as for regular full-time staff.
Long-Term Care Insurance: The full cost (based on University group rates) is paid by the staff member.
Tuition Benefits: Eligibility is under the same terms and conditions as for regular full-time staff.
Retirement Savings Plan: Eligible to participate in the University's Basic and Matching Plans, subject to the terms and conditions of the Plans. Eligible to participate in the Supplemental Retirement Annuity (SRA) Plan.

414.5 UNIVERSITY STAFF WHO ARE COVERED BY COLLECTIVE BARGAINING AGREEMENTS

University staff members who are covered by collective bargaining agreements should refer to the appropriate contract article.

Phased Staff Retirement Proposal Template
This sample proposal lays out a plan for Phased Retirement implementation that should be acceptable to all affected parties (supervisor, staff member and colleagues).

Phased Staff Retirement Agreement Template
Once a proposal is approved, a signed agreement is required to help clarify for all involved parties the specifics and expectations of the arrangement.

Voluntary Phased Staff Retirement Frequently Asked Questions
These FAQs are intended to help clarify the information in the policy above.

Policy Number: 414
Effective Date: 02/01/2010
Revised Date: 06/01/2019
Last Reviewed Date: 10/09/2019

Applicability: All Regular Full-Time and Regular Part-Time Staff Members
Cross-reference: Staff Grievance Procedure - Policy 620, Tuition Assistance for Faculty and Staff - Policy 406, Tuition Benefit for Dependent Children Attending the University at Pennsylvania - Policy 407, Tuition Benefit for Dependent Children Attending Other Colleges and Universities (Direct Grants) - Policy 408, Tuition Benefits for Spouses Attending the University of Pennsylvania - Policy 409

Policy Manual Disclaimer