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June 12, 1997

Group hopes to finalize faculty early retirement proposal June 13

The ad hoc committee that has been working since January on a new early retirement plan for tenured faculty hopes to finalize its proposal at a meeting tomorrow, June 13.

If that happens, committee members said, they will forward the plan to Chancellor Mark Nordenberg ASAP.

Nordenberg told Senate Council on Monday that he will review the proposal "as expeditiously as I can. I understand that people are waiting to make decisions about their lives." Interim Vice Chancellor for Finance Art Ramicone, who chairs the ad hoc committee, said the report to Nordenberg will include an analysis (not necessarily an in-depth one) of the plan's potential financial impact.

"You can tumble these numbers until the cows come home and make assumptions until you're bleary-eyed, but I think there's some basic logic that you can follow on all this, and I'm going to transmit that logic in the report" to the chancellor, Ramicone said at the June 6 meeting of the University Senate budget policies committee.

On June 3, Faculty Assembly endorsed a draft plan that was presented to the Assembly by James Holland, one of the faculty members who serves on the early retirement committee.

The document detailed three early retirement scenarios. The plan, as presented by Holland, would be limited to full- and part-time tenured faculty members; full- and part-time faculty librarians whose contracts provide the expectation of continuing employment; and full-time administrators who have tenure. The plan would exclude medical school faculty and any employee who receives all or part of his or her contract salary from a clinical practice plan, a practice corporation, a University of Pittsburgh Medical Center hospital or any other reimbursable source.

Holland presented the document as a nearly final draft that the full committee had endorsed at its most recent meeting. Holland said he put the finishing touches on the document himself by plugging in some numbers and wording that the committee had agreed to.

But following the Assembly meeting, Vice Provost Robert Pack — one of the administrative representatives on the early retirement committee — suggested that the full committee had not, in fact, endorsed the contents of the document that Holland presented.

In response, Holland pointed out that Pack had not attended the committee meeting in question. And Holland insisted that the document he presented to Faculty Assembly represented a consensus of early retirement committee members.

Professors and administrators have been haggling over a new early retirement incentive plan since 1995, when then-Chancellor J. Dennis O'Connor appointed a group of faculty and administration members to make recommendations on Pitt retirement policies. Economics professor Jack Ochs chaired the group, which came to be known as the Ochs Committee.

In February 1996, the Ochs Committee submitted its final report. By then, O'Connor had resigned and been replaced by Mark Nordenberg.

The Ochs Committee report did not propose details of a new plan. Rather, it made a number of general comments and recommendations, including a key recommendation that Pitt should adopt a permanent plan and not just a "window" plan with a limited enrollment period.

During the rest of 1996, Pitt's administration conferred with lawyers and consultants in an attempt to resolve legal and financial concerns about an early retirement plan.

Age discrimination was one of those concerns. Since Jan. 1, 1994, federal law has forbidden mandatory retirement ages for faculty. A plan that offers financial incentives based on a faculty member's age could be interpreted as being discriminatory.

Last January, Chancellor Nordenberg appointed the current faculty-administrator committee on early retirement and asked the group to draft a plan.

Nordenberg has made it clear that he will approve an early retirement plan only if it serves the good of the University, makes economic sense and meets legal requirements.

Nordenberg told Senate Council this week: "There's almost something counter-intuitive about investing your money in people who are not going to be here doing work. But we know that carefully crafted plans do, in fact, advance institutional interests. And the question is, how do the financial balances work out in the plans that will be considered?" The chancellor said he is wary of a permanent plan because it would commit the University financially for decades to come. "If, for example, a quote 'permanent' plan had been implemented during my early days as a faculty member here, it could not have taken account of the fact that mandatory retirement ages would be done away with [in 1994]. It really couldn't have assessed what people are concerned with now in terms of the general supply of academicians and what that means in terms of the degree of turnover you want," Nordenberg said.

Faculty representatives on the early retirement committee estimate that, based on normal Pitt patterns, at least 100 professors have put off retiring during the last two years, waiting to see what kind of deal they can get through a new early retirement plan.

Assuming those professors earn an average salary of $60,000, that's a total of $6 million — minus the salaries of replacement faculty (who would tend to be younger and lower-paid) and the costs of the plan itself — committee member Herb Chesler told Faculty Assembly last week.

"And it's not only money that is being lost" through the delay in approving a plan, Chesler said. "What's most important is that the [faculty] rejuvenation process has been held in abeyance." Following Nordenberg's comments at Senate Council this week, Council member Paul Hammond vented some of the frustration that other professors have been expressing privately about delays in implementing a new early retirement plan.

Hammond, a professor in the Graduate School of Public and International Affairs, admitted he hasn't been involved in drafting the plan. But he noted that his professional specialty is studying what he called "the behavior of large organizations that distribute huge amounts of money." "It is my impression, and I believe that this will be confirmed by [early retirement committee] members and observers, that the chancellor is losing credibility over the mixed signals that have come from his office about this" issue, Hammond told his fellow Senate Council members. A strong leader such as Franklin Roosevelt would lock warring officials in a room together until they reached agreement, Hammond said.

Looking directly across the meeting table at Nordenberg, Hammond said: "It's not enough to say that you're waiting, Mark, for the outcome of this [early retirement] committee…The fact is that the delays of this committee have had something to do with mixed signals from your office and between you and the provost. Sir, you are using up more credibility than you should be on this matter."

— Bruce Steele

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