The Arizona Board of Regents Phased Retirement Program for Optional Retirement Plan Participants
Overview
This program enables eligible Optional Retirement Plan participants to reduce their workload and hours, remain employed for up to three years, and concurrently access their Optional Retirement Plan retirement account.
An eligible individual's participation is entirely voluntary, is subject to negotiation with and approval by the applicable dean/vice president, and is established by a binding written legal agreement. The dean/vice president retains the authority to balance college/division business continuity needs with requests for phased retirement. The Provost grants final approval.
Eligibility
To participate in the Phased Retirement Program, Optional Retirement Plan participants must 1) be at least 62 years old, 2) be fully vested in the Optional Retirement Plan and 3) enter into a written Phased Retirement Agreement with the University.
The Written Agreement and Duration of the Phased Period
The Arizona Board of Regents and General Counsels for each Arizona University are developing a standard written Phased Retirement Program Agreement to be used in every case. The Agreement records the specific terms of each participant's phased retirement period, workload, FTE, salary, and retirement date
The maximum duration of a participant's phased retirement period is three (3) years. A period less than three years may be requested by the participant.
Once the phased retirement period has begun, participants may choose to accelerate retirement, but may not extend retirement past the date in the participant's written Agreement. Any plans for accelerated retirement will be shared as early as possible with the applicable dean/vice president to accommodate college/division business continuity needs. This allows for unforeseen circumstances, such as a participant's illness, that may prevent a participant from fulfilling the negotiated phased retirement period.
Reduced Workload and Reduced Hours
A Phased Retirement Program participant's FTE, salary and workload will be reduced at the beginning of the phased retirement period. The specific amount of reduction is subject to negotiation between the participant and the applicable dean/vice president.
Unless otherwise requested by the participant in writing, the FTE will be no less than .50 (20 hours/week) allowing the participant to retain University and Arizona Department of Administration benefits eligibility.
Tenured Faculty and Individuals with Continuing Status
A tenured faculty member or professional with continuing status irrevocably relinquishes all status rights at the end of the phased retirement period.
University Handbook for Appointed Personnel
Chapter 3.11.06, Effect of Retirement, Resignation and Part-time Employment on Tenure
Chapter 4.10.07 Effect of Retirement, Resignation and Part-time Employment on Continuing Status
Year-to-Year Professionals
Year-to-Year professionals continue to be subject to annual employment contract renewals during the phased retirement period. Participation in phased retirement by non-tenured/non-continuing personnel does not create a guarantee or implied agreement of continuous employment during the phased retirement period.
Access to Optional Retirement Plan Accounts During the Phased Retirement Period
Participants may withdraw funds from vested Optional Retirement Plan account(s) as desired during the phased retirement period.
Contributions to Optional Retirement Plan Accounts During the Phased Retirement Period
Both employee and employer contributions to the Optional Retirement Plan continue through the participant's retirement date in accordance with Arizona Revised Statutes 15-1628C and the Optional Retirement Plan.
Phased Retirement Agreement
- Q: May the terms of an executed Phased Retirement Agreement be changed?
- A: The terms of a Phased Retirement Agreement are irrevocable, unless the participant chooses to accelerate retirement due to an unforeseen circumstance such as a change in health or ability to fulfill the responsibilities of the negotiated phased retirement period.
Benefits
- Q: Does participation in the Phased Retirement Program affect a participant's annual leave accrual rate?
- A: Phased Retirement Program participants who are otherwise eligible to accrue annual leave will continue to accrue the leave pro-rated by the reduced FTE level.
- Q: Does participation in the Phased Retirement Program affect a participant's paid sick time accrual rate?
- A: Phased Retirement Program participants who are otherwise eligible to accrue paid sick time will continue to accrue the time pro-rated by the reduced FTE level.
- Q: Does participation in the Phased Retirement Program affect a participant's eligibility for group insurance benefits?
- A: Benefits eligibility is defined by the Arizona Department of Administration. To remain benefits eligible, the Phased Retirement Program participant must be employed at least half time, or .50 FTE.
- Q: Does participation in the Phased Retirement Program affect a participant's eligibility to participate in the Tax Sheltered Annuity 403(b) Plan or the Deferred Compensation 457 Plan?
- A: No.
- Q: Does participation in the Phased Retirement Program affect participation in the supplemental life insurance provided by the Standard Insurance Company or Aetna Life Insurance?
- A: Supplemental Life insurance coverage is based on the insured's annualized salary and FTE. When an insured experiences a reduction in FTE or salary, the life insurance coverage is reduced on a pro-rated basis.
Optional Retirement Plan
- Q: How does a Phased Retirement participant begin withdrawing from an Optional Retirement Plan account?
- A: Confirm with the departmental business office that the Phased Retirement Agreement has been received by Human Resources, and allow ten (10) business days for the investment company to be notified of participation in the Phased Retirement Program. Then, contact the Optional Retirement Plan investment company to begin withdrawals.
- Q: Why do Phased Retirement participants have to continue to contribute to the Optional Retirement Plan?
- A: Continued employee and employer contributions to the Optional Retirement Plan are mandated by Arizona Revised Statute 15-1628C. All contributions will stop after the participant's retirement date.
Arizona State Retirement System Distributions
- Q: Before joining the Optional Retirement Plan, the participant had contributed to the Arizona State Retirement System (ASRS). Does participation in the Phased Retirement Program affect the ASRS account?
- A: No. ASRS participants (both for the frozen 'Plan' and the current 'System') may begin distributions from ASRS when the participant retires from all ASRS employers. In this case 'retires' means to sever employment from all ASRS-participating employers.
Return to Work after Retirement (Arizona State Retirement System Accountholders)
- Q: Before joining the Optional Retirement Plan, the participant had contributed to the Arizona State Retirement System (ASRS) and still has an active ASRS account. Does participation in the Phased Retirement Program affect this ASRS account?
- A: While a formal Phased Retirement Agreement does define the participant's formal retirement date, the ASRS account is administered according to specific ASRS rules regarding return to work after a formal retirement. Under current ASRS guidelines A phased retirement program participant will be able to access ASRS accounts after the participant's retirement date. For the most current return to work information, and information on a specific ASRS account, contact the ASRS directly at http://www.azasrs.gov/web/index.do.
Return to Work After Retirement (Optional Retirement Plan Participants)
- Q: How does participation in the Phased Retirement Program affect a participant's opportunity to return to work after retirement?
- A: The Phased Retirement Program Agreement is an executed contract between the participant and the University that formally defines the participant's retirement date; the participant and the hiring department may develop plans for the participant's to return to work after retirement without affecting the Optional Retirement Plan. However, there is no guarantee of future employment after the formal retirement date. If the participant does return to work, the participant may not rejoin the Optional Retirement Plan, and will not be eligible for tenure or continuing status.
- Q: Are there additional resources regarding retirement or retirement planning?
- A: Additional retirement information is available on the HR website under Retirement Resources.
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