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Wednesday, September 08, 2010
UNM Plan for Buyouts Aborted
By Olivier Uyttebrouck
Journal Staff Writer
A proposal to rejuvenate the faculty at the University of New Mexico by offering an attractive retirement program for older employees died this year after UNM leaders raised legal and financial concerns, officials said.
Faculty leaders last year proposed that UNM offer an annuity equal to one year's salary for those who agreed to retire by last June.
The intent was to encourage large numbers of older faculty to retire and allow UNM to hire promising young professors who are having trouble finding work in a time of tight university budgets, said Richard Wood, president of the UNM Faculty Senate.
"UNM faces a brief opportunity to hire terrific young professors, including some from under-represented groups — if and only if we can free up resources for such hires within a difficult budget environment," Wood wrote in a 2009 letter to UNM President David Schmidly.
Under a current buyout plan, UNM pays a tenured faculty member a lump sum that equals up to 40 percent of annual salary, said Richard Holder, a UNM associate provost. In exchange, the faculty member retires and surrenders tenure to UNM, he said.
"We basically give them a check, and they give us their tenure," Holder said. Although the buyout has been infrequently used in the past, four professors agreed to retire June 30 under that program, which will cost UNM $150,000, he estimated.
To qualify for a buyout, faculty members must be eligible for retirement under the state's educational retirement system, he said.
Wood co-chaired a task force that in February proposed the retirement-incentive plan. It would have paid a tax-deferred annuity worth from 50 percent to 100 percent of a professor's annual salary, up to $125,000, UNM records show.
The plan was "front-loaded" to pay faculty a higher percentage if they agreed to retire promptly, Wood said. The intent was to get younger faculty on board quickly, he said.
But the proposal died because UNM deans feared it would cost more money than it saved, at least in the short term, he said.
In addition, Holder said, UNM attorneys raised concerns about the legality of offering professors tax-deferred annuities.
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