On Monday, August 27, 2018, the Foothill-De Anza Board of Trustees – as part of an overall budget reduction strategy – passed a resolution authorizing the District to offer a PARS Supplemental Retirement Plan (SRP) to eligible employees . You will find the full resolution is here.
The intent of the incentive is that fiscal savings would be achieved by replacing an outgoing retiree, where appropriate, with someone at a lower pay rate on the salary schedule. The analysis completed by the District assumes that retiring classified will be replaced with a temporary replacement (for one year) in order to achieve cost savings and or reduce costs. Additionally, faculty will be replaced by adjunct faculty initially, and filled with full-time faculty, where appropriate, after the third year.
Plan requirements will be mailed to each eligible participant the week of September 4, 2018 and will include comprehensive plan details and a projected benefit illustration for each eligible person. Below is the short version of the proposed plan.
- Eligible classified employees would receive a monthly benefit (taken in fixed term or lifetime payments) that equate to 60 or 65% of pay. The percentage will be finalized once a total cost analysis is conducted based on the actual SRP applicants.
- Eligible faculty would receive a monthly benefit (taken in fixed term or lifetime payments) that equate to 75% of pay.
Why is there a difference? All the cost savings comes from faculty. It is simply cheaper to replace full-time faculty with adjuncts, who make less to teach the same course. In addition, due to the high cost an adjunct would have to contribute towards health benefits only 10% elect to take them, saving the District tens of thousands each year. Classified have no equivalent to adjunct –and no similar cost savings – when replacing permanent employees other than the use of temporary ones and the California Education Code places restrictions on their use.
Not a guarantee: The retirement incentive must meet the District’s fiscal and operational objectives in order for the plan to go into effect and must receive final approval by the Board of Trustees following District review of the PARS analysis of the applications submitted. If these goals are not reached, the District may withdraw the retirement incentive.
- CalPERS retirement eligible (age 50 with 5 years of CalPERS service credit);
- Five (5) years of District service by June 28, 2019;
- Resigned from District employment effective no later than June 28, 2019; and
- Submitted all required SRP enrollment materials and an irrevocable Letter of Resignation by November 2, 2018 (which is only effective if the plan is approved by the Board of Trustees at their December 10, 2018 meeting).
Questions: The plan material will be distributed by human resources to eligible employees the week of Sept.4, 2018. Please wait to ask questions until AFTER you have received the information. It will provide details on next steps, information sessions to get your questions answered, and anything else an employee would need to consider if they choose to take advantage of this SRP.
Watch your mail for full details.