Ohio University released details of its proposed buyout plan today, and officials said the university expects to save $8.7 million annually as a result.
The buyouts are projected to cost OU roughly $9.7 million up front if about 20 to 22 percent of eligible faculty and staff members accept one of the plan's many options, said Stephen Golding, vice president for Finance and Administration. It would take about 13 months for savings from the buyout plan to meet costs, he added.
About 700 OU faculty and 419 staff are eligible for buyouts, said Director of Benefits Greg Fialko at last night's Faculty Senate meeting.
"There were great pains taken to make certain that the plan was fair and equitable to as many employee groups as possible," said Linda Lonsinger, OU's chief human resource officer. "A lot of care was taken here to do the right thing for the institution as well as the employees."
OU has offered staff members and administrators early retirement incentives three times since 2003, but the university has never in recent memory implemented a faculty buyout plan, Lonsinger said. OU offered administrative and classified employees early retirement options as recently as 2009 to help decrease the number of layoffs that year.
The university is currently preparing for a $27 million reduction in state funding for next year as a result of Ohio's projected $8 billion budget shortfall. The buyouts are one way for OU to save money, Golding said.
"What we are doing is developing a series of approaches that will alleviate the loss of those funds in ways that try to minimize the impact on the teaching and service mission of the university," Golding said.
Deadlines for accepting a buyout offer range from June 30 this year to June 30, 2012, according to OU documents.
The plan contains different options for each group of faculty members, including incentives such as: cash bonuses, a one-year service credit and payouts for sick leave and vacation time. Bonuses, which will be paid over a two-year period, range from $25,000 to $80,000, and plans that do not include bonuses leave faculty the option of retaining their early retirement plan, which would allow them to return and teach after they retire.
Despite the university's current hiring freeze, OU plans to bring in professors to fill some of the vacancies left by those who opt to accept a buyout, said Executive Vice President and Provost Pam Benoit.
"We'll need to find alternate ways to cover those classes. ... We need to be thinking about where those faculty would come out and how do we put people back into (OU's) workforce," Benoit said. "We may have faculty members who have lower seniority, but that does not necessarily mean that they aren't very good teachers."
The plan offers separate options for administrative, classified and union employees. The options include payouts for sick and vacation leave, and a $5,000 cash bonus for employees who sign up for a buyout option by May 1 and resign by June 30. Members of the Ohio Public Employee Retirement System can also receive a one-year service credit.
"While departures of personnel under these programs will pose challenges, they will also introduce opportunities for faculty and staff to exercise creativity in how we teach our students and carry out our operations," said Benoit and Golding in the letter to the Board of Trustees.
"To maintain our direction as an institution, we must work together to design and implement more efficient configurations of our people, programs and practices to meet the changing needs of our students in an environment where resources are constrained and shrinking."
OU's Board of Trustees will review the plan and vote on whether or not to approve the early retirement and voluntary separation options at its meeting this Friday.
Wright State University, Kent State University and Bowling Green State University already offer employees voluntary buyout programs.
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