Spring Break
Faculty might wait to retire
Staff consider alternate ideas
HAYLEY PETERSON
Issue date: 10/27/08 Section: News
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Another retirement option exists, said Scott Brown, department head of Small Animal Medicine, but state legislation prevents teachers from transferring plans.
Brown said 19,000 teachers in the University System - including 1,900 from the University - are enrolled in the Optional Retirement Program, which bases retirement funds on market investments.
The recent downturn in the economy crushed many retirement accounts, leaving some faculty and staff uninsured for the future - including University President Michael Adams.
Thomas Gausvik, associate vice president for human resources, said on Friday that Adams told him in a telephone conversation Wednesday that he may be working until he is 92.
"I don't think anyone realized this would happen, whether it's Joe the Plumber or Alan Greenspan [chairman of the U.S. Federal Reserve Board]," Gausvik said.
Brown is rallying for a resolution to the problems, but he said he is struggling to gain Georgia legislators' recognition of the issue. West Virginia and Tennessee recently passed bills to resolve their retirement problems, he said.
He petitioned the University Council Benefits Committee for help at a meeting Friday.
One resolution, he said, would enable the plan's members to transfer to a tenure- and salary-based retirement plan, the Teacher's Retirement System.
Gausvik said under the state-controlled TRS plan, "for 30 years of service, you get 60 percent of your salary."
Current legislation requires University faculty to make a one-time, irrevocable decision between the ORP and TRS within the first 30 days of their employment.
"The ORP was intended to provide a retirement plan equal to the TRS," Gausvik said. "There were high expectations for the ORP as an alternative. That hypothesis has not come true. Now we have an unequal situation."
Brown said he was advised to file a class-action lawsuit, if his petition for a bill continued to go unnoticed.
But Gausvik advised him against filing a lawsuit.
"Once you go legal, the bridges go up and everyone takes their position."
He said Brown should keep trying to engage legislators and University officials in an active dialogue to solve ORP problems.
From a business perspective, Gausvik said Brown's proposal is attractive because productivity among faculty who must postpone retirement may deteriorate.
Brown said, "I will be hard to find at 10 a.m. if I'm still here at 73."
Gausvik also said University graduates would feel the effects of gouged retirement funds when searching for a job.
"Employers will not have as many openings because people are not retiring," he said.
On other matters, the Benefits Committee discussed the administration's postponement of gender equity and child care benefits studies due to budgetary issues.
Sarajane Love, a Law professor, said she wants to consider applying "gentle pressure" to the provost to resume these studies.
Viewing Comments 1 - 10 of 21
Yougottabekiddingme
posted 10/27/08 @ 7:50 AM EST
Let me get this right. You chose the Optional plan instead of TRS because you wanted a bigger return. Remember, bigger reward, bigger risk. Now that the market has turned down, your want your money back? How much money would you have given back if the market was up 30% a year? Are you call yourselves educated people. (Continued…)
aprof
posted 10/27/08 @ 8:30 AM EST
I'm on the ORP plan and have lost quite a bit of money during the market downturn, but I still wouldn't switch to TRS. I suspect that at some point in the future, states will follow the private sector and switch to a "cash balance" plan in TRS for employees with fewer than X years in the system. (Continued…)
sympathetic
posted 10/27/08 @ 10:42 AM EST
Many of the University employees who selected the ORP did so because their initial employment was expected to be short term, far below the ten years required to become vested in TRS. (Continued…)
More facts
posted 10/27/08 @ 11:53 AM EST
Yes, it's important to remember that the two plans aren't equal at the outset -- with TRS you are only guaranteed to fully recoup the University's contribution if you stay in for 10 years. (Continued…)
Sheba
posted 10/27/08 @ 1:33 PM EST
I agree with yougottabekiddingme. As a staff member, I didn't get the choice of ORP vs. TRS, and I won't get vested until I have been here 10 years. But live by the sword and you might die by it -- you chose to put your investment on the market, and it can reward or punish you. (Continued…)
Frank
posted 10/27/08 @ 3:50 PM EST
You're joking right. If you have put yourself in a position that you are 'forced' to work until your 92 because your portfolio dropped in value then you had the WRONG asset allocation. (Continued…)
ugaprof
posted 10/27/08 @ 4:27 PM EST
The stock market went up dramatically in the 1990s, but since 2001 it has bobbed around randomly, and not everyone has realized that the bull market of the 1990s ended quite a while ago. (Continued…)
Winfield J. Abbe
posted 10/27/08 @ 11:58 PM EST
The state legislature must not change the rules and now permit those who chose the ORP to switch to the TRS unless they pay some huge amount into TRS that would compensate that system for losses to it. (Continued…)
Online assignment
posted 3/11/09 @ 8:23 AM EST
There should be a scheme for faculty who are not retiring or make some for PhD students to come to teaching field.
courseworks
posted 3/11/09 @ 8:24 AM EST
You're joking right. If you have put yourself in a position that you are 'forced' to work until your 100 :)
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