Iowa State leaders will share an employee retirement incentive option (RIO) proposal with the state Board of Regents when it meets next week in Des Moines. If the board approves the plan, the window for eligible employees to express interest would open Aug. 3 and close March 1, 2021. Approved participants would need to retire from Iowa State by June 30, 2021.
The proposed RIO program is part of a broader strategy to trim operating budgets in the face of reduced state appropriations and tuition revenue. It is a voluntary program open to employees eligible for medical benefits who meet age and service requirements.
Resources, including instructions for expressing interest in the program, are on a project website.
The university most recently offered a series of retirement incentive options in 2009 and 2010 as the university responded to a $24.5 million mid-year state appropriation reversion.
Participants in this year's RIO would choose from three incentive options:
- Two years of monthly employer's retirement contributions, plus health and dental coverage* (employer and employee costs) up to the self and spouse/partner level
- Three years of retirement contributions
- Three years of health and dental coverage*
*Requires five years of continuous participation in ISU medical/dental plans prior to retirement
To apply, employees would need to meet a rule of 70 (age and continuous length of university service) and be at least 60 years old at the time of retirement. In addition, an applicant:
- Should not already have been accepted for another ISU retirement program, such as phased retirement.
- Should not have received approval to retire or resign prior to the announcement of the RIO program.
- Agrees to fully retire no later than June 30, 2021, but also on a timeline that assures a smooth transition of duties.
University leaders estimate about 1,200 faculty and staff would be eligible for the RIO program, but actual savings to the university would depend on the number of approved participants. Not everyone who qualifies may be approved for the retirement incentive option. Division leaders, who make final decisions, will look for demonstrated cost savings as they review requests.
The cost of each of the three incentives also would range with the program selected and the individual participant, including variables such as salary or current medical and dental plans. Leaders conservatively estimated an incentive cost of $17,625 annually. The combined annual salary and fringe benefit cost averages for the eligible group is about $113,000.
Employees approved for the RIO program could not be rehired at the university during the incentive period they choose (two or three years). Any exceptions to rehiring would require an employee to repay the value of the incentives they had received.