Skip to Content - Skip to Navigation

Frequently asked questions about the Voluntary Retirement Incentive Program

What is the Voluntary Retirement Incentive Program (VRIP)?

The VRIP provides a one-time incentive to retirement eligible employees who elect to participate in the program and enter into a Release and Settlement agreement ending their PASSHE employment.

Is there a prescribed time frame for this incentive?

  • Faculty: The VRIP is offered between March 1, 2013, and March 29, 2013.
  • Non-Faculty Athletic Coaches: The VRIP is offered between March 1, 2013, and April 26, 2013.

Is the VRIP an early retirement program?

No. The VRIP is available only to employees who currently are eligible based on age and/or years of service and eligibility for majority paid health insurance. The one-time incentive payment does not impact the level of compensation against which retirement payments are calculated.

How do I know if I am eligible for majority paid annuitant health care coverage?

The eligibility criteria for majoriy paid annuitant health care coverage are as follows:

Hired before July 1, 1997

  • Age 60 or older with at least 10 years of credited service
  • Any age with at least 25 years of credited service
  • Any age with an approved disability and at least five years of credited service

Hired July 1, 1997–June 30, 2004

  • Age 60 or older with at least 15 years of Commonwealth/PASSHE service
  • Any age with at least 25 years of Commonwealth/PASSHE service
  • Any age wth an approved disability and at least five years of Commonwealth/PASSHE service

Hired on or after July, 1, 2004

  • Age 60 or older with at least 20 years of Commonwealth/PASSHE service
  • Any age with at least 25 years of Commonwealth/PASSHE service
  • Any age with an approved disability and at least five years of Commonwealth/PASSHE service

Upon submission of the Intent to Retire Notice, the Office of Human Resources will notify the participant of his/her eligibility status.

If an employee does not meet the age and/or years of service requirements of the VRIP based on their employment at a PASSHE institution, can they include prior service in a Commonwealth agency or the military?

“Credited Service” under the Annuitant Health Care Program (AHCP) is defined as follows:

  • For faculty and coaches hired prior to the Fall semester 1997 and July 1, 1997, respectively, credited service is service as defined by the State and/or Public School Employees’ Retirement Systems. For the Alternative Retirement Plan (ARP), credited service is Commonwealth/PASSHE and/or public school service.
  • For faculty and coaches hired in the Fall semester or on or after July 1, 1997, respectively, credited service is actual service with PASSHE or the Commonwealth and does not include other types of service purchasable for retirement credit.

Can an employee continue to work part-time or full-time after they elect to participate in the program?

Generally not. However, the SERS, PSERS, and ARP rules and collective bargaining agreement language will be followed.

May an employee, who has previously submitted a retirement notice, rescind the notice to take advantage of the retirement incentive program?

Perhaps. If the employee has received final retirement documents from the retirement provider, he or she may not be able to change their retirement date. The employee should contact SERS, PSERS, or their ARP.

When will the employee receive the incentive payment?

For faculty, incentive payments will be paid on or before June 28, 2013, but preferably with the final pay of the 2012-2013 AY on June 14, 2013. Incentive payments for non-faculty athletic coaches will be paid on or before July 26, 2013, preferably with the final pay of July 12, 2013. These dates are contingent on the employee’s right to revoke the executed release and settlement agreement within the prescribed timeframes.

Since the VRIP for faculty and non-faculty athletic coaches has established retirement dates of May 31, 2013, and June 28, 2013, respectively, when is the last day the release and settlement agreement can be provided?

For faculty, the last day to provide the faculty release and settlement is April 5, 2013. For non-faculty athletic coaches, the last day to provide to the coaches the release settlement agreement is May 3, 2013.

Is the 45-day requirement for the release and settlement agreement business days or calendar days?

It is 45 calendar days.

When do the eight days to revoke the 45 calendar days waiting period begin?

The eight days begins after the employee signs two copies of the release and settlement agreements.

Will the eligible non-faculty coaches that are currently in SERS who retire on June 28, 2013, have the incentive applied to the next quarter?

No. The incentive is not eligible for the retirement contributions.

Will the incentive be taxed at 25 percent for federal income taxes?

Yes.

May an employee review the release and settlement agreement before indicating his/her intent to participate in the Voluntary Retirement Incentive Program?

No. The only way an employee receives the Release and Settlement Agreement is by completing the Intent to Retire form and after the Office of Human Resources verifies the employee’s eligibility for participation in the program. Upon providing the employee with two originals of the Release and Settlement Agreement, the employee’s 45-day period begins in which he or she can consult with counsel or a tax advisor to consider participation in the program.

What deductions are taken from the incentive payments?

All deductions with the exception of retirement are taken from the incentive payment.

  • If the deduction is a flat dollar amount deduction that has already been satisfied by the usual bi-weekly payroll, it will not be taken again from the incentive payment.
  • If the deduction is based on a percentage of pay, then it will be taken from the incentive payment.
  • If the incentive payment is processed as a supplemental payment, after the employee’s last regular check, then all current deductions (both flat dollar and percentage) except for most benefit-related deductions will be taken from the payment.

Are faculty who were on sabbatical for all or part of the 2012–2013 academic year eligible for the VRIP?

Unfortunately, we are prohibited from considering waiving the year of service post-sabbatical because the law forbids terminal sabbaticals. Specifically, 24 P.S. 1864.3 requires that the faculty member agrees in writing to return to his or her employment for a period not less than one year immediately following the expiration of such leave of absence. Thus, any faculty member who has taken a sabbatical for some or all of the 2012–2013 academic year is not retirement eligible on May 31, 2013, and, therefore, not VRIP eligible.

Is there an exception to the May 31, 2013, retirement date for those faculty members serving as acting managers with appointments to an acting manager position that extend beyond May 31, 2013?

No. A faculty member serving as an acting manager is a member of the faculty bargaining unit. Therefore, like all other terms and conditions negotiated for faculty, the terms of the VRIP program must be applied to faculty members serving as acting managers.

Are temporary faculty members eligible for the VRIP?

Yes, provided the faculty member meets the eligibility requirements.

For the purposes of calculating the amount of the VRIP monetary payment, what is the definition of “years of service”?

For calculating the amount of the VRIP payment, the definition of “years of service” is the same as that which is used to determine their eligibility for majority paid annuitant health care coverage. For example, if the employee was hired by PASSHE prior to the Fall semester of 1997 (if a faculty member) or hired prior to July 1, 1997 (if a coach), their years of service may include “credited service” as defined in the applicable collective bargaining agreements.

Are regular part-time faculty members and regular part-time coaches eligible for the VRIP?

Yes, provided the faculty member/coach meets the eligibility requirements.

If a faculty member/coach is on a full or partial approved leave of absence (other than sabbatical leave), is he/she eligible to participate in the VRIP?

Yes, the faculty member/coach is considered to be an active employee for the purposes of being a VRIP participant.

Is any portion of the Voluntary Retirement Incentive Program (VRIP) payment eligible for deferral into the 457 Deferred Compensation Plan administered by Great West?

No.

Is any portion of the Voluntary Retirement Incentive Program (VRIP) payment eligible for deferral into a Tax Sheltered Annuity (TSA) account?

The incentive payment cannot be tax deferred into a 403(b) plan.

Is the VRIP payment eligible for retirement contributions to the employee’s PASSHE retirement plan (SERS, PSERS, or ARP)?

No, the VRIP payment is not retirement-eligible earnings, and neither the employee nor the employer retirement contributions will be made based with regard to this payment. The VRIP payment will not be included in the calculation of the employee’s Final Average Salary (SERS and PSERS).

If I am participating in the VRIP, and I have completed and submitted the “Intent to Retire” notice as well as signed the “Release and Settlement” agreement, must I prepare and submit a separate “retirement letter” to the Provost, Dean and Chair?

No, if you have completed and submitted the “Intent to Retire” notice and signed the “Release and Settlement” agreement, it is not necessary to prepare a separate retirement letter.

  • Human Resources Office
  • Sutton Hall, Room G8
    1011 South Drive
    Indiana, PA 15705
  • Phone: 724-357-2431
  • Fax: 724-357-2685
  • Office Hours
  • Monday through Friday
  • 8:00 a.m.–4:00 p.m.