DID YOU KNOW why there is a Sick Leave Bank for Faculty Members? Faculty Members accrue 15 days of sick leave each year up to a maximum accumulation of 300 days and they can use their accumulated sick leave when they can’t attend to duties because of illness or injury or related events. But sometimes Faculty Members don’t have enough accumulated sick leave to cover an absence — that’s where the Sick Leave Bank comes in.
Article 17.3 of the CBA states that the University will provide a Sick Leave Bank, maintained at 300 days, for use by Faculty Members who have run out of accumulated sick leave. The Bank always has 300 days; it is refreshed as it is used. It can be used only when there is a foreseeable end date for the absence and can be used by a Faculty Member for no more than 150 days in any 18-month period and/or for the same or related illness (unless approved by the Vice-Provost for Academic Personnel and the AAUP). The Sick Leave Bank can be a life saver, or more accurately a saver from financial disaster, especially for Faculty Members too early in their careers at UC to have accumulated much sick leave or for more established Faculty Members who already may have had to use their accumulated sick leave.
The Sick Leave Bank sounds almost too good to be true. Why does it exist at UC? The answer lies in the wisdom, many years ago, of AAUP leaders and UC administrators who realized that by creating the Sick Leave Bank and by limiting, to 300, the number of sick leave days that any individual Faculty Member could accumulate, they could do something of benefit to both sides.
I don’t have a Finance background, so please forgive if my explanation is simplistic. Before the Sick Leave Bank appeared in the CBA, Faculty Members could accumulate sick leave with no limit; if unused or little used, it was possible for a Faculty Member to accumulate 450 or more sick leave days. But the University was required to account for those accumulated (but unused) days as a liability and so they had to be balanced, on the books, by University assets. By limiting Faculty Member accumulation of sick leave days to 300, the University’s financial obligations were eased. In exchange, by establishing the Sick Leave Bank, Faculty Members were not negatively affected by limiting sick leave accumulation while those without enough leave to cover an absence could be absent without also having a financial disaster.
DID YOU KNOW that if you are currently deferring compensation by contributing to a 403 (b) retirement account and you are reaching the limit of what you can contribute annually, you may be able to increase your contributions up to twice the amount by also establishing and contributing to a 457 (b) account? IRS regulations allow public employees to contribute equally to 403 (b) accounts and state government established 457 (b) accounts. In Ohio, the latter is referred to as “Ohio Deferred Compensation” which is a public, non-profit organization created by Ohio legislation. Ohio Deferred Compensation is managed by a 13-member Board composed of public employees, retirees, and appointed investment experts which govern the program in accordance with the provisions of Ohio Revised Code Chapter 148.
Current (for 2021) IRS annual contribution limit by the employee for 403 (b) plans is $19,500 plus an additional $6,500 if the employee is age 50 or older. The IRS annual contribution limit for 457 (b) plans is the same as those for 403 (b) plans and an individual may contribute to both up to the IRS limits! The UC payroll system monitors the limits for employees who are contributing to a 403 (b) or 457 (b) through UC to ensure that they do not exceed the IRS limits.
If you are interested in contributing to Ohio Deferred Compensation, you will have to contact Ohio Deferred Compensation to establish an account and UC Human Resources /Benefits to arrange for the additional withholding from your salary.
If you are planning for your retirement, you can defer all or a portion of your sick and/or vacation payout to either your 403 (b) account or 457 (b) account or you can divide it between both. If you do not have a 457 (b) account and want one, remember to allow enough time to establish one well in advance of your retirement. Also feel free to contact UC’s Benefits Department (email@example.com) if you have questions about deferring compensation.
There is no simple answer to that question. There may be many factors that play into determining the best time of year to retire and individuals may have to consider circumstances very specific to them. However, there are some general facts that all of you should know and that should be helpful in determining what the best time of year is for you to retire:
- If you are 12-month faculty, you earn your base salary monthly as you work for it. You get paid at the end of each month for the work that you have provided during that month. Base payment for you is always up to date.
- If you are two-semester faculty, your annual base salary is paid out evenly over 12 months but you earn that salary by providing services during two semesters — usually, but not always Fall and Spring. Regardless of when you retire, the University must make you whole. You must be paid out for all salary that you have earned.
- If you retire under a traditional STRS (State Teachers Retirement System) or OPERS (Ohio Public Employees Retirement System) retirement plan, your first retirement benefit check is deposited around the 1st of the month immediately following your last day of work.
- If you retire under a traditional STRS or OPERS retirement plan, depending on number of years of service, you may have access to System provided/subsidized health insurance (STRS) or System subsidized health insurance (OPERS).
- If you retire under the ARP (Alternative Retirement Plan), there is no System provided and/or subsidized health insurance available to you. You will have to get health insurance on the private marketplace.
- If you retire under a Grandfathered Plan (for faculty hired prior to July 1977), there is a University health care plan available to you but it is costly. It may be more cost effective for you to get health insurance on the private marketplace.
Keeping those 6 points in mind, here are some generalizations about the best time of year to retire:
Faculty Members with 12-month appointments can retire anytime during the year — for considerations of pay and health insurance, it doesn’t matter when and it doesn’t matter what retirement plan you are under. When you retire, you will already be paid up to date and you will need to have health coverage ready immediately upon retirement.
The situation for Faculty Members with two-semester appointments is more complicated. Because they provide service on a semester basis, they typically retire at the end of the Fall Semester or at the end of the Spring Semester or anytime between the end of the Spring Semester and the end of the Academic Year in mid-August. Which is best may depend on the interactions among University pay, retirement system benefits, and health insurance.
All else being equal, two-semester faculty (with Fall and Spring assignments) who participate in the traditional STRS or OPERS retirement plans are generally better off retiring at the end of the Fall or Spring Semesters rather than at the end of the Academic Year in August. If you retire at the end of the Fall Semester in December, you will have earned ½ of your annual base salary. Since you will already have received University paychecks in September, October, and November, the University still owes you three more paychecks. You will be paid out for all three (December, January, and February) at the end of December. In addition, you will get your first retirement check at the beginning of January. Further, you can have STRS provided/subsidized or OPERS subsidized (however OPERS has recently and significantly reduced the size of its subsidy) health insurance in place for January 1st. If you retire at the end of the Spring Semester, at the end of April, you will have earned your entire annual base salary. Since you will have already received seven University paychecks (September – March), the University still owes you five more (April – August). You will be paid out for all five at the end of April. In addition, you will get your first retirement check at the beginning of May and you can have STRS provided/subsidized or OPERS (subsidized) health insurance in place for May 1st. If you wait until the end of the Academic Year in August to retire, you will not have received any more annual base salary than if you had retired at the end of April, but you will have lost out on retirement benefit checks for May, June, July, and August!
All else being equal, two-semester faculty who retire under the ARP or Grandfathered plans are generally better off retiring at the end of the Academic Year in August. Their retirement income is not coming from a state government related system but rather from whatever they decide to withdraw from their retirement accounts. They also are not eligible for System provided and/or subsidized health insurance. By waiting until August to retire, they can continue to be covered through the end of August by the health insurance provided as a benefit of the UC/AAUP Collective Bargaining Agreement, thus maximizing that benefit and putting off the need to be covered by private insurance until September 1st.
***Please keep in mind that we are not professional retirement advisors. You should discuss retirement options with UC Human Resources/Benefits and/or a representative of your retirement system and/or your personal financial advisor before deciding the best time to retire for you.
DID YOU KNOW…..if you are planning retirement, how and when you should ask for Emerita/Emeritus status?
Many Faculty Members who retire are interested in having Emeritus/Emerita status after retirement. That status is not automatic upon retirement. It is something that must be asked for and then granted via recommendation of your departmental colleagues and approval by Administration. While there are some benefits that apply to all retired Faculty Members, there are some additional ones that apply only to Emeriti. The most significant are continued provision of University email access and, if you were paying for University parking before retirement, free parking at the University parking facility you were using prior to retirement.
The Rules of the Board of Trustees include a definition of Emeritus/Emerita status and the mechanism for attaining it. Several years ago, we incorporated those basic provisions into the Collective Bargaining Agreement as Article 18.5. “’Emeritus rank’ is defined as a non-salaried academic title of honor of a retired or retiring Faculty Member or academic officer of the University, usually corresponding to the rank or title held by the Faculty Member during his/her last period of active academic service to the University.” The process for appointment to Emeritus/Emerita status is similar to the process for new faculty hires. The retiring Faculty Member, after notifying the University of his/her intent to retire, initiates the process by written request to the Academic Unit Head. The request then requires Academic Unit recommendation (often by vote of the departmental faculty) followed by concurrence of the Dean, Provost, and Board of Trustees.
The appointment process can take some time, especially at the first and last steps. Complicating the last step is the fact that the Board of Trustees may meet only once every other month, or even less frequently than that. If the timing is bad, the process may take a couple of months or more just to get Board approval. If Board approval comes before your effective retirement date, email access will continue without interruption. If Board approval comes after your effective retirement date, your email access will be terminated upon retirement. With some effort, it can be reinstated after Board approval of Emeritus status. For this reason, while you can have Emeritus/Emerita status approved either before or after your retirement, we recommend that Faculty Members ask for that status at the same time that they give notice of intent to retire, preferably at least 4 to 6 months prior to the intended retirement date. That way you can have Emeritus/Emerita status effective immediately upon retirement and without interruption of your University email.