FAS Considers Retirement Package

In an effort to reduce personnel costs while avoiding immediate layoffs, the University will likely finalize plans by the end of the month to offer an incentive package for early retirement of staff workers across all schools.

The plan—which has been on the table since the University increased budgetary scrutiny in the fall—would allow staffers to voluntarily choose early retirement instead of facing the risk of layoffs, said Sara Oseasohn ’74, associate dean of the arts and humanities in the Faculty of Arts and Sciences.

Harvard’s endowment, valued at almost $37 billion last June, was buffeted by current financial conditions, losing roughly 22 percent of its value by the end of October and sending the University scrambling to find ways to trim costs. Amidst subsequent belt-tightening measures—including a hiring freeze on FAS staff announced in November—the specter of possible layoffs has loomed over some staffers worried that their jobs may be in jeopardy.

“What we’ve been trying to do all along with the budget reductions is to think of all the possible ways [to cut] without affecting people,” Oseasohn said, calling an early retirement “a less painful thing than saying we’ve got to let somebody go.”

As part of a quarterly financial review process, FAS financial officers met yesterday with department administrators from the FAS division of social sciences and will be meeting with members of the other divisions later this week.

Though the early retirement plan has yet to be finalized, the budgetary planning process is proceeding in these meetings with the expectation that an incentive package will be implemented, according to Oseasohn.Even if the early retirement proposal were realized, Oseasohn said she would not rule out the possibility of layoffs, deferring a complete determination until April, when budgetary planning will be finalized and units will know if they need more cuts.

It also remains possible that retiring now in the midst of a bleak financial climate may not be an appealing option for many staffers—even with increased pension benefits.

“Obviously in today’s economy, people aren’t going to rush into [retiring],” Oseasohn said. “To tell you the truth, even if the University decides to do it, it’s not clear that it’s going to make a huge difference in the budgets.”

Bill Jaeger, director of the Harvard Union of Clerical and Technical Workers, said the incentive package could increase the financial security of the union’s longer-term members—especially those who are nearing retirement anyway.

“We would welcome it,” Jaeger said. “We would be very much looking forward to working with the schools to make good use of the program and make sure that people don’t lose their jobs unnecessarily.”

If the retirement incentive plan comes to fruition, it will not be the first time Harvard has offered to increase pension benefits for staffers who retire early. During an economic recession in 1991, the University created an early retirement incentive program for all non-faculty employees over the age of 55 who had worked for the University for at least 10 years.

Oseasohn compared Harvard’s plans for retirement packages with an early retirement incentive plan announced by Dartmouth in December, calling the Dartmouth plan “remarkably similar to the kinds of things that are happening here.”

Dartmouth’s plan is nearly identical to Harvard’s plan from 1991—all employees over the age of 55 who have been Dartmouth employees for at least 10 years qualify for the program.

—Staff writer Bonnie J. Kavoussi can be reached at kavoussi@fas.harvard.edu.
—Staff writer Esther I. Yi can be reached at estheryi@fas.harvard.edu.