Harvard To Offer Retirement Incentives Next Week

Early retirement program could presage layoffs

CORRECTIONS APPENDED

Eligible University staff will receive retirement incentive packages as early as next Tuesday, kicking off a process that officials acknowledged could culminate in layoffs as Harvard seeks to cut costs.

Staff will have 45 days to accept or decline the offers, after which the University will reassess budgets before beginning any discussions about layoffs with the Office of the General Counsel and human resources officials.

The information was relayed to department administrators in the sciences division of the Faculty of Arts and Sciences yesterday, according to individuals in attendance at the briefing. The individuals, who shared their own notes from the proceedings, requested anonymity in order to preserve their relationship with FAS administrators.

"I expect that there will be a very careful review of staffing levels... then we’ll have to begin layoffs," FAS Associate Dean of Administrative Resources Geoffrey M. Peters told the assembled administrators, according to the individuals.

Peters repeatedly warned administrators to give no guidance on whether to accept the package, no matter how deeply they suspected that a staffer would be laid off after the early retirement window closed. According to Peters, any guidance suggesting knowledge of future employment status could pose legal problems for the University, because "then the entire program could be seen as involuntary."

"There’s one answer that can be given to that," Peters said of staff requests for guidance, according to the individuals’ notes. "'I don’t know, and the lawyers will kill me if I try to answer that.'"

The University announced its early retirement plan Tuesday as a way for eligible staffers—those over 55 years of age who have worked at the University for at least 10 years as of this June 30—to voluntarily choose early retirement, relieving pressure on the University’s dwindling resources. Harvard officials said yesterday that each incentive package would likely consist of a lump-sum payment.

Harvard’s endowment, valued at almost $37 billion last June, lost roughly 22 percent of its value by the end of October, and amid subsequent belt-tightening measures—including a November hiring freeze on FAS staff—some staff have expressed concerns about the potential for layoffs.

That fear may be realized if the incentive package does not sufficiently reduce staff, said Brett C. Sweet, FAS dean for finance, adding that "on the very painful end of this [process] are staff reductions, layoffs."

"None of us are looking at layoffs until we see the outcome of the retirement package and whether it’s successful at reducing numbers to a point where we may not have to reduce further," said one meeting attendee, who asked to remain anonymous.

The University, which plans to release the details of the early retirement program on Friday or Tuesday, is currently waiting for financial consultant TIAA-CREF to finish tailoring each package to its potential recipient. Of the University’s 3500 staffers, approximately 1000 are eligible for the retirement package—700 of whom work in FAS. [SEE CORRECTIONS BELOW]

Once committed to the program, an acceptor cannot rescind his decision, but those who initially reject the offer will have seven days to reconsider. Employees who take the package will likely have to leave the University by June 30, Peters said, according to the individuals.

FAS, together with Harvard Medical School and the Harvard School of Dental Medicine, will participate in the initial launch of the incentive packages this month. The other schools will follow suit in March.

During a less severe economic recession in 1991, the University created a similar early retirement incentive program for all non-faculty employees over the age of 55 with at least 10 years of service.

According to Bill Jaeger, director of the Harvard Union of Clerical and Technical Workers, his outfit is reaching out to administrators across schools to allay the possibility of job cuts.

"We are working with all sections of the University to make sure that layoffs are last resorts and that we save every dollar we can in ways that don’t hurt people and programs," Jaeger added. "We’re still hopeful about that."

—Staff Writer Esther I. Yi can be reached at estheryi@fas.harvard.edu.

CORRECTIONS

The Feb. 12 news article "Harvard To Offer Retirement Incentives Next Week" incorrectly stated the total number of University staffers, the number of staffers eligible for early retirement packages, and the number of eligible employees falling specifically within the Faculty of Arts and Sciences. In fact, packages were offered to 1,600 staff members, not 1,000; 515 of those worked in FAS, not 700; and Harvard has many more staff members than the 3,500 reported in the article.