UNIVERSITY OF WISCONSIN
PLATTEVILLE
VOLUNTARY SEPARATION
INCENTIVE PROGRAM
Presented by: Human Resources
John Lohmann, J.D., M.B.A. - Interim Director of Human Resources
Chris Buswell, M.P.A. – Assistant Director of Human Resources
Effective dates of separation will be determined by
the Chancellor in the best interest of the University.
After consultation with the Senior Review Team.
If you have a preferred date, please put it on your
application. Chancellor Shields said he will work with
people on the date.

55 years or older as of June 30

Start date at University of Wisconsin Platteville June 30th 2010 or
earlier.

Vested in WRS, entitle to receive annuity

All classes of employees except executive management, student
employees and rehired annuitants
ELIGIBILITY

Not eligible for rehire for two years if your application is approved
and you elect to participate.
Dates to Remember!
• Employees must submit completed applications
for consideration in the Voluntary Separation
Incentive program no later than May 20th.
• Chancellor Shields’ final decisions will be
communicated to applicants no later than June
6th.
Applying
for the
program does not
obligate you!
It
only requests that you
be considered.

The process goes like this:

1. Submit Application

2. Senior Review Team will consider the
applications and give recommendations to the
Chancellor.

3. Chancellor selects those who will be
approved.

4. At this point you are still not obligated.

5. Those approved will receive a separation
agreement. This is a contract.

6. You will have 45 days to consider the deal.

7. If you sign and turn in the contract, you still
have 7 days to change your mind.
IT IS ALL VOLUNTARY
You do not have to
participate in the plan.
There is no penalty to
decide not to!
The
deal only becomes final after the 7
day period expires after you sign the
separation agreement.
So
if you are not sure I encourage you to
consider applying to keep your options
open. You can decide not to take the
deal.
How to Determine Your Benefit Amount
 Your
benefit amount is arrived at by taking 50% of
your base pay, prorated for your FTE.
 LTE’s
are a little different.
 TENURED
faculty receive an additional incentive

Example: An employee at full-time rate of $80,000 who has a
.75% FTE would be eligible for $30,000

Full-time base rate of $80,000 x .75% FTE = $60,000 x 50% = $30,000

Benefit amount does not include:

Overloads

Winterim, Summer Service / Summer Session amounts

Overtime

Standby pay

Weekend, night, shift differentials, etc.
Example Classified Staff:
Adjusted Base salary =
$50,000
Standby Pay
+$
200
Overtime Pay
+$
650
Total Compensation = $50,850
Total Separation Incentive Amount = $25,000
Example Unclassified Staff:
Contract Base Salary (adjusted for FTE)
= $60,000
Overload
+ $ 1,500
Summer Session
+ $ 3,200
Total Compensation = $64,700
Total Separation Incentive Amount = $30,000
There are 2 methods for distribution:
1. Cash lump sum payout
2. WRS Actuarial Reduction Plan
The benefit amount to the employee is based on the
50% of salary prorated by FTE determination in both
choices.
If
you elect the ARP: If the cost of the
ARP is less than 50% of your salary (FTE
adjusted), you will be paid the
difference in a lump sum.
If
the cost of the ARP is more than 50% of
your salary (FTE adjusted) UW-Platteville
will “eat” the extra cost.
NOTE
Option 1:
Employee may choose a cash payout of
the Separation Incentive in a lump sum
payment at the end of their employment.
Points to consider:
• Consider changing your withholding exemptions.
• Complete a new W-4 and return the form to HR
• Work with HR on the date to use for your form.
• You are advised to speak to your tax advisor.
Option 2: Actuarial Reduction Payment (ARP)
If you have not reached “normal retirement age” you may wish to
consider selecting this option.
Normal Retirement Age:
General (Most workers): 65 or 57 with 30 years of service
Protective (e.g. Police): 54 or 53 with 25 years of service

Anyone retiring early (not at normal retirement age but vested in
WRS and over age 50) receives a reduction in their monthly
benefit amount. The reduction is determined based on the
number of months the retiree is below normal retirement age .

Current reduction for non-protective occupation participants:

0.4% per month between ages 55 and 57

0.001111% per month between age 57 and the normal
retirement age.
 The
ARP
ARP pays ETF/WRS to eliminate this reduction.
Option 2 : Actuarial Reduction Benefit (WRS)
Example: Rowen is Age 55
Estimate #1 (Based on retirement date of 8/1/2015)
Current salary: $68,000 per year
Estimate of Retirement Benefit: $ 338.36 per month
Estimate of Retirement Benefit
After ARP
: $ 527.05 per month
 Separation
 Cost
incentive payment: $
of ARP:
 Balance
to be paid to Rowen:
34,000
29,391
4,609
Remember that these are estimates.
OPTION 2: “ROWEN” CONTINUED

If Rowen lives for thirty more years to age 85:

Total cumulative value of the increase to her payment:
 $188.69
x 12 months x 30 years: $67,928

What if I invested that money instead?

Currently inflation is negative (slight deflation)

But let’s assume an average annual rate of inflation of 2%.

If you were to invest the cost of the ARP ($29,391) and you got 2%
per year, in 30 years your investment would be $53,338.
IS IT WORTH IT?
(TALK TO YOUR FINANCIAL ADVISOR!)
Option 2: ARP
Example: Ted is Age 62
Based on retirement date of 8/1/15
$18.71/hour ($38,913,000/year)
Separation incentive payment: $19,456.50
Estimate of Retirement Benefit:
$
1,274.69 per month
Estimate of Retirement Benefit
After ARP
:
$
1,340.16 per month

Cost of ARP: $ 9,407.86

Balance payable to Ted: $ 10,048.64

If Ted lives to 75:

Total cumulative value of increase to his payment:
 65.47
 If
x 12 x 13 = $10,213.32
you took the money that the ARP would cost
you and invest it for 13 years and got 2% interest
your investment would be: $12,170.07
Option 3 (continued):
Points to consider:
The closer you are to your normal retirement age, the lower the Actuarial
Reduction Benefit will be and the lower the Actuarial Reduction Benefit will
cost .
What you should do next:
1. Review your WRS estimates and the “Separation Incentive
Payments” summary in your packet
2. If you are interested in discussing the Voluntary Separation
Incentive Program, please call HR at 608-342-1176 to make
an appointment with our staff.
3. There are additional presentations this week. Feel free to
come to another one.
4. Complete and return your application if you want to be
considered.
-Please note if you have a desired separation date.
You are encouraged to contact
ETF, your tax advisor and/or
attorney if you have questions!
Dates to Remember!
• Employees must submit completed applications
for consideration in the Voluntary Separation
Incentive program no later than May 20th, 2015
• Chancellor’s final decisions will be
communicated to applicants no later than June
6th.
• Separation Agreements must be returned no later
than July 22nd.
Additional Resources:
Live Presentation: Watch your email for announcements. We will be requesting
ETF to present on campus if possible.
Webinars: ETF has many webinars scheduled. You can find them on their
website under the Webinar tab.
http://etf.wi.gov/member_education.htm#tab2
Group Appointments: ETF also has many group appointments for members
who have a retirement packet from ETF. It is listed under the Face to Face tab.
Questions?


If I am at or past regular retirement age do I
have to sign up for Medicare or do I just wait
until my sick leave conversion runs out?
When each of you reach age 65, each must
enroll for Medicare (both Parts A and B) to
continue state or local health insurance. We
will automatically mail you a reminder
before your 65th birthday. Your premiums
decrease when either of you become
enrolled in Medicare (both Parts A and B).



http://etf.wi.gov/faq/retirees.htm#3
QUESTIONS FROM
PREVIOUS SESSION