|Making a Gradual Transition to Retirement
January 26, 2010,
Volume 56, No. 19
Today’s uncertain economy has many of us rethinking our plans for the future, especially those nearing retirement age. From financial concerns to family obligations, there’s a lot to consider when deciding on the best time to retire. For some individuals, a gradual transition into retirement may make things a bit easier—and Penn can help.
Beginning February 1, 2010, eligible full-time staff members will be able to take advantage of a new Voluntary Phased Staff Retirement Program. This program provides a gradual transition into retirement for staff who are eligible to retire but aren’t ready to stop working entirely. This way, you can gradually reduce your workload while still being employed with benefits, and the University can reduce payroll costs while still retaining the expertise of qualified staff. Phased retirement also gives departments adequate time to plan for filling or restructuring the staff member’s position.
To participate in the Voluntary Phased Staff Retirement Program, you must be eligible for Penn’s retiree health program. This means that your age plus your years of service with Penn must total at least 75 with a minimum of age 55 and 15 years of service, or age 62 and 10 years of service. If you’re eligible, participation in the Phased Retirement Program also depends on the business needs of your department.
If you’re approved to participate, you’ll work reduced hours but still receive the same benefits that you receive as a full-time staff member.
Keep in mind that benefits based on your salary, such as the Tax-Deferred Retirement plan and life insurance, will be based on your reduced salary. Also, your time off (including sick leave and holidays) will be pro-rated based on your reduced schedule. And you’ll need to work enough hours to qualify for any benefits that require a certain amount of service, such as Family and Medical Leave.
The details of your arrangement must be approved by your supervisor and your school/center, but some of the basic provisions include:
· Your phased retirement period cannot last more than two years. At the end of the agreed-upon period, you will officially retire and be entitled to Penn’s retiree health benefits.
· Your work schedule must be no less than 60% of your current full-time schedule.
· The arrangement should be reviewed every six months by you and your supervisor/department head to determine if it meets everyone’s needs. If it doesn’t, you can choose to return to work on a full-time basis or retire.
If you’re interested in taking advantage of the Phased Retirement Program, you should first contact the Retirement Office in the Division of Human Resources to confirm that you’re eligible. Then, talk with your supervisor to see if this arrangement would be possible.
Before you make a decision on retirement, we encourage you to speak with your financial advisor, consult the Social Security Administration, and/or make an appointment for individual counseling with one of Penn’s retirement vendors (TIAA-CREF and The Vanguard Group).
Please visit the Human Resources website at www.hr.upenn.edu/benefits/Retiring for more information, including a detailed Q&A. You can also contact firstname.lastname@example.org for more information.