7.14 Benefits for Retired Faculty Members
7.14.1 Early Retirement Incentive
An early retirement incentive is offered to teaching faculty on a regular or terminal appointment and administrators with faculty status who retire from employment at Calvin at age 62, 63, or 64 at the end of an academic year (August 31) and notify the provost or divisional vice-president by September 1 prior to the year of retirement. Eligibility for an incentive for faculty who retire at age 62, 63, or 64 during the academic year with less than one year’s notice is determined by the provost or divisional vice-president based on when the retiring faculty member’s position is filled.
The full benefit is available to those faculty with twenty or more years of full-time employment prior to retirement. Faculty with at least ten years but with fewer than twenty years of full-time employment accrue this benefit at the rate of 5% for each year of employment as a faculty member at Calvin. For example, a person with fifteen years of full-time employment prior to retirement is entitled to 75% of the benefits listed in the chart. Faculty with fewer than ten years of full-time employment prior to their retirement date are not eligible for this benefit.
The incentive is payable in twenty-four payments with the regular payroll. The payments are subject to all of the normal payroll taxes, including social security taxes. An alternative payment schedule may be arranged through the Payroll Office. Tax advice should be gathered before setting up a payment schedule.
Retirement
Date August 31, ____ |
Academic
Year |
Age |
Retirement
Incentive |
2006 |
2005-06 |
62-65
+ 8 months* |
40% |
2007 |
2006-07 |
62-65
+ 10 months* |
40% |
2008 |
2007-08 |
62, 63 or 64 |
40% |
2009 and beyond |
2008-09 |
62, 63 or 64 |
40% |
* "Normal " retirement age as specified by the Social Security Administration.
7.14.2 Medical Insurance
If a person has been employed full-time at Calvin for at least twenty years, the health insurance (medical, dental, and pharmaceutical), will be paid by Calvin (less an annual premium share) for the life of the employee and of his/her spouse. If employment was less than twenty years and more than ten years, the supplemental insurance program continues for as many years as the person was employed at Calvin. For retirees who were employed less than twenty years and who continue working part-time, the covered benefit is extended on a pro-rated basis. For example, if four additional years were worked at 50% FTE, the benefit would be extended for an additional two years.
The premium share for retirees is different than for active employees and was approximately 25% in 2004. You will receive a notice regarding the amount of this premium share when you retire and then at the beginning of each new calendare year. This may be paid monthly, quarterly, semi-annually or annually, whichever you prefer.
7.14.2.1 Group Health Insurance
Persons who retire prior to age 65 are continued under the regular group health insurance plan until the first day of the month of their 65th birthday. The same rule applies to the retiree's spouse if family coverage is in force. The college pays the premium except for the annual premium share expected of all retirees.
7.14.2.2 Social Security and Supplemental Medical Plans
All retired employees are expected to enroll in Medicare at their 65th birthday. At that time, Calvin enrolls the individual and his or her spouse, where applicable, in a supplemental medical insurance plan. Prescription and dental benefits remain the same with no changes from the coverage you had as an active employee. The college pays the premiums except for the annual premium share expected of all retirees.
Medicare has two components, Part A and Part B.
Part A is provided by the government and pays for hospitalization only. Part A is called "hospital insurance" and does not cost you anything.
Part B is purchased by you and is automatically deducted from your Social Security monthly check. In 2005 the cost for Part B is $78.20. Part B is called "medical insurance" and pays for office visits, lab tests, ex-rays etc.
For retirees, Calvin purchases a "medi-gap" or Medicare supplemental insurance policy. Because Medicare Part A and Part B pay 80% of the medical charges this insurance pays for the remaining 20%.
7.14.3 Amendments or Terminations
The Board of Trustees reserves the right to mend or delete any and all provisions of the retirement benefits policy, except that any such amendments or deletions shall not become effective until one year from September 1 following the date of the Board's resolution authorizing the change.
