133 at YSU to retire under incentive

The program will save the university $2.6 million a year in salary costs.

By HAROLD GWIN

VINDICATOR EDUCATION WRITER

YOUNGSTOWN — A Youngstown State University early retirement incentive program developed in employee contract negotiations three years ago hasn’t paid off quite as well as expected, but President David C. Sweet is still pleased with the results.

Initial projections estimated that as many as 185 university employees might take the early retirement. Should that number leave, the university projected it could realize an annual salary base savings of $3.6 million.

The window of opportunity closes as of Saturday and the final numbers are a bit lower.

A report to the YSU Board of Trustees on Thursday showed that only 133 employees opted to take the deal, netting the university a projected $2.6 million annual base salary savings.

“I’m very satisfied,” Sweet said, pointing out that the original estimates were based on the number of employees eligible. No one was forced to take the early retirement incentive and some chose not to, he said.

That $2.6 million can be invested in other university initiatives, he said.

Trustee Scott Schulick said he wasn’t comfortable with the plan when it was originally proposed and still has some doubts about its effectiveness.

He questioned whether the savings are worth the loss of highly experienced staff in various departments who took the retirement incentive, leaving the university to find qualified people to fill their posts.

The loss does provide opportunities for new people, but there are “growing pains” encountered, particularly with such a large number of people leaving all at once, he said. Of the 133 who took the package, 39 are retiring effective Saturday.

Sweet said having senior staff leave was part of the strategy to produce salary savings by bringing in new people at lower wages, thereby creating the annual savings.

YSU has a very low employee turnover rate and the retirement offer provided the incentive for some senior people to leave, Sweet said, adding that it is always good to have some turnover in an organization.

Schulick asked if the annual base savings would be eroded as the new people move up the salary scale, but was assured that the savings will remain.

The $2.6 million will be there, said Beth Kushner, planning and administration officer in the office of vice president for administration. It will be money the university can allocate elsewhere, she said.

Under the plan, the university bought up to two years of service time to allow employees to retire early or retire with larger pensions. YSU paid about $5.5 million to the Ohio Public Employee Retirement System to make the buyouts.

Retirees were also eligible to cash in their unused sick time at the rate of 50 percent. That bill came to about $470,000.

gwin@vindy.com