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As a result of a Harvard plan to downsize its administrative staff and cut budget corners, more than 350 University employees have accepted an early retirement offer that will increase their pension benefits.
The University offered the plan over the summer to all staff members except teaching faculty as part of an across-the-board attempt to cut administrative sots. It is the first time the University has made such an offer.
It is unclear how much the offer will save the University in the long run, but some vacant positions will not be filled and others will likely be taken by younger, less-skilled, lower-salaried employees, according to Vice President for Finance Robert H. Scott, in an interview earlier this year.
"This program was offered to help the University deal with the pressures of cost-cutting measures," said Marianne L.Howard, associate director of the Retirement Programs Office. "The program will be a good opportunity for departments to reorganize without layoffs," Howard said.
The 878 employees who qualified for the plan were 55 years of older and had worked for the University for at least 10 years.
The 40 percent who accepted the offer must retire by December 31 to receive the benefits of the early retirement program. Pension plans for Harvard employees depend on age and number of years of service with the University.
For pension considerations, this plan adds five years to both the age of the employee and the number of years of employment with Harvard, thus increasing the retiree's pension check.
Under the plan, a 60-year-old employee with 30 years experience and a salary of about $20,000 would get $11,340 a year in pension as opposed to $6483 without the plan, according to figures quoted this fall by Howard.
The program made early retirement possible for many employees who had wanted to retire early but couldn't afford to, said Howard and Joan Bruce, director of benefits administration in the Office of Human Resources.
"The early retirement plan will help both the University and the employees," Bruce said. "This will help the University by reducing payroll costs and help reorganize the staffing."
There were several workshops that were held to help employees who were considering early retirement, Howard said.
"I hope that the program will help out the University and the employees," Howard said
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