When Assistant Director of the Media Fellows Program Marilyn Culler opened her email ahead of the recent Honors and Fellows weekend, she was planning on hearing from prospective students. Instead of recruiting for the future of DePauw, she came across an email that put her own future in question.
Culler along with nearly 200 faculty and staff were offered early retirement packages. With a deficit in DePauw’s operating budget, the administration is taking steps to reduce spending in all areas. One way they are doing so is by offering voluntary early retirement packages.
Culler, who has been at DePauw since 1995 and never experienced something like this, was immediately concerned–it caught her off guard.
“One of the first emails was about being offered early retirement, and I was in the mode of thinking about recruiting students for DePauw, and all of a sudden, I’m offered early retirement with no information about it,” Culler said. “I had to wait until Monday to find out any details. I thought it was really weird that they asked you to pick up the packet and gave you the complete address where the Human Resources Department was–including the zip code–we’re not that big of a community.”
Director of Human Resources Amy Haug defended the decision to send notices out on Saturday. “It’s kind of a double edged sword. It’s work related, but you want people to be able to have a moment to think about it away from work, and knowing that people are pretty much connected 24/7 it just gave people an opportunity to read through that when they weren’t at work, or weren’t on the job,” Haug said.
Culler was forced to focus on her work, rather than her looming future. “I really just had to put it all out of my head after picking up this first packet glancing at it, and setting it aside until Tuesday when I hadn’t had a chance to really look at it in preparation for Honors and Fellows weekend,” Culler said. “It was just unsettling, because of the timing. I had to decide whether I was going to continue explore, or say no, or yes in two weeks.”
On February 27, staff members could begin picking up their notice packets in-person at the Human Resources office. On March 14, staff members had to decide, sign, and return their packets declaring what option they had chosen.
However, there were other members of the faculty and staff who were less alarmed. “To me it didn’t raise any red flags, I was just like ‘oh well it’s about time,’” said Douglas Harms, professor of computer science. “But it was the first time I have received an offer, so I was a bit depressed about that because I’m not ready to retire.”
Kelsheimer insisted that these packages are fairly normal in the long run of Universities budgets, so there was not much need for concern. The last time DePauw offered these packages in the 1990s. However, DePauw administrators were unable to give reporters information about previous retirement packages.
“Often times I think it happens when there are some financial issues, and senior faculty members get paid more than junior faculty members and one way to reduce the salary budget is to encourage senior faculty members to retire,” Harms said. “It doesn’t mean that we are in financial straits, it’s not an uncommon thing to do every ten or twelve years or fifteen years.”
Kelsheimer agrees with Harms. The voluntary retirement packages include some incentive for staff and faculty who are around the age of retirement from DePauw, and he said that they wanted to find the right amount of money to offer for retirement.
According to Haug, finding both eligible faculty and staff was formulaic. Ordinarily, DePauw allows employees to accept retirement benefits when the sum of their age and years of full-time service equals eighty. However, upon accepting the package employees can lower the target number to seventy.
“Essentially [with] this package they give you an extra year salary, so there is some financial motivation to retire. If I were thinking about retiring in a year or two I might be like ‘hey if I retire now I get extra money,’ whereas if I wait two years I would just retire and not get any extra,” Harms said. “So I suspect that faculty and staff who are thinking of taking the offer, they are probably thinking of retiring anyway this might just be that extra push to do it sooner than later.”
Currently, faculty and staff salaries make up 60 percent of DePauw’s annual operating budget. “We really don’t have a target [number of faculty to cut], we have some estimates,” Kelsheimer said. “We specifically didn’t say we have a direct target, we wanted that flexibility because I think the pieces fit together. It’s impossible to set a target.”
Kelsheimer made it clear that there are no plans to cut staff or faculty if there is too little money made. “There’s a zero percent chance that if we don’t hit a number, then we’re going to have an involuntary layoffs. There’s never been one second of discussion about that,” Kelsheimer said. “Outside of Higher Ed oftentimes that [layoffs] does happen, you’ll have an early retirement and then you’ll have [layoffs] that’s not been in any discussion, so that’s important for people to know.”
The administration views these voluntary retirement packages not only as a way to decrease the overhead in the budget, but also as a way to help people who are near retirement. “It is an opportunity to address our biggest line item,” Kelsheimer said. “We wanted to do it in a way that could help those who were already in that place where they would want to retire.”
Kelsheimer did add that the administration would hold back for sometime before hiring replacements for faculty and staff who take the packages, in order to decrease University spending. The tasks of those who take the packages would be delegated into their respective departments giving faculty and staff slightly more work to do.
“We looked at our pool and said ‘how many people do we have that are close to retirement, where this for them would be a good’ but it would also give us an opportunity to say okay well if I leave would there be an opportunity to replace me from within and find a way to share the duties of that person,” Kelsheimer said.
There is not much worry about the offer being taken by faculty who are not yet ready to retire; however, staff members might be more inclined to take the package if they want to start a new career path.
“Frankly it’s not attractive enough that people who weren’t thinking about retirement would take but now on the staff side if we dip the opportunity to take it down low enough, there are some people who might take it,” Kelsheimer said. “If somebody doesn’t want to be here that’s okay, but it would be really bad if someone who really enjoys their work here thought, ‘oh they must want me to take it’ that was not the intent.”
Faculty contracts are tenure based tracks, which means that after a certain amount of time at DePauw, faculty will have more secure jobs at the University for longer periods of time. Staff contracts however, are done on a year to year basis. Staff contracts expire June 30 and are renewed on July 1.
“I had heard a rumor it was happening, but it just didn’t register with me,” Culler said. “I just felt like to send something out on a Saturday morning with no information that would affect your whole future was unsettling.”
However, both Haug and Kelsheimer insist that faculty offered early-retirement packages have nothing to worry about.
“This is voluntary, no one should feel pressured, no one should feel unrest by being presented with this,” Haug said. “Obviously, I can’t gauge how people would react to an offer, but my big thing is to make sure people felt comfortable.”
About one half of the group of staff members who have been offered these packages have shown interest in taking these retirement packages. The deadline for faculty to make it known that they want to pursue the voluntary early retirement packages is April 21.