Retirement Incentives Policy | Davis Technical College

Purpose
1. The purpose of the Retirement Incentives Policy of the Davis Technical College (hereafter “College”) is to (1) provide incentives to eligible employees who elect retirement or voluntary separation from College employment, and (2) to encourage some measure of staffing flexibility, consistent with overall College needs.
References
1. Older Worker Benefit Protection Act (“OWBPA”)
2. Davis Technical College Sick Leave Policy
3. Davis Technical College Vacation Leave Policy and Procedures
4. Davis Technical College Retirement Programs Policy
Definitions
1. Creditable Full-time Service – Creditable Full-time Service means periods during which an employee is employed by the College in a position designated by the College as Full-time. Periods of employment in Part-time, temporary, adjunct, seasonal, intermittent, student, or other non-Full-time positions shall not constitute Creditable Full-time Service and shall not be included in determining eligibility under this policy.
  1. Creditable Full-time Service shall be measured from the employee's Full-time hire date and shall accrue continuously during eligible Full-time employment. An employee shall complete one month of Creditable Full-time Service on the monthly anniversary of the employee’s Full-time hire date and one year of Creditable Full-time Service upon completion of twelve (12) months of Creditable Full-time Service. For purposes of determining eligibility under this policy, Creditable Full-time Service shall be expressed in completed years derived from completed months of service. Partial years shall not be recognized as fractional years and shall not be converted to decimal or other fractional-year equivalents.
  2. A break in Full-time employment (hereafter “break in employment”) shall terminate the accrual of Creditable Full-time Service. A break in employment occurs whenever an employee separates from employment with the College or changes from a Full-time position to a Part-time position. Approved leaves of absence shall not constitute a break in employment unless otherwise provided by law or separate College policy.
  3. Periods of eligible Full-time employment completed before and after a break in employment shall be aggregated when calculating an employee's Creditable Full-time Service under this policy. All completed years and completed months of eligible Full-time employment shall be combined across such periods of service. Accumulated completed months shall constitute additional years of Creditable Full-time Service upon completion of each twelve (12) months of service, consistent with Section 3.2. No Creditable Full-time Service shall accrue during a break in employment, and no service credit shall be granted for periods during which an employee is employed in a Part-time, temporary, adjunct, seasonal, intermittent, student, or other non-Full-time position.
  4. For purposes of eligibility under this policy, only completed months of Creditable Full-time Service shall be counted. Partial months shall not be counted or rounded. Twelve (12) completed months shall equal one year of Creditable Full-time Service.
  5. The College, through Human Resources, shall make the final and binding administrative determination regarding an employee’s Creditable Full-time Service, Rule of 75 eligibility, and eligibility for benefits under this policy.
2. Rule of 75 – To satisfy the Rule of 75 means that the employee's completed age in whole years plus completed years of Creditable Full-time Service with the College equal or exceed seventy-five (75). Partial years of age shall not be counted. For example, an employee who is age fifty-five (55) who has twenty (20) years of Creditable Full-time Service would satisfy the Rule of 75 (55+20=75).
3. Unreduced Social Security Benefits – shall mean eligibility for full retirement benefits under the Social Security Act without actuarial reduction.
Policy
1. Retirement Incentives – The College offers three retirement incentive options: (1) a lump sum retirement incentive plan, (2) a health insurance bridge, and (3) an early retirement incentive plan for those employees hired prior to 2009. All incentives and benefits under this policy are subject to the availability of funding and any required approvals of the College.
2. Right to Amend or Terminate Program - The Board reserves the right to amend or terminate the retirement incentives programs at any time, but no amendment or termination shall affect any participant who has already retired under its provisions.
3. Compliance with Law and Governing Documents - This policy shall be administered in accordance with applicable federal and state law. To the extent any provision of this policy conflicts with applicable law, regulation, retirement plan document, insurance plan document, carrier agreement, summary plan description, governmental requirement, or other controlling benefit plan document, those authorities shall control.
4. Separation Agreement Required - As a condition of receiving any retirement incentive or VSIP benefit, the employee shall be required to execute a separation agreement and release of claims in a form approved by the College. Any such agreement shall comply with applicable federal and state law, including the OWBPA where applicable.
5. Severability – If any provision of this policy is determined to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
6. Election of Retirement Incentive Program - Employees who are eligible for more than one retirement incentive program offered under this policy shall designate their selected retirement incentive program in their application for retirement benefits. Election of one retirement incentive program constitutes a permanent waiver of participation in all other retirement incentive programs offered under this policy. No employee may receive benefits under more than one retirement incentive program under this policy.
7. Application for Incentives - Employees seeking participation in any retirement incentive program or Voluntary Separation Incentive Plan (VSIP) offered under this policy must submit a completed application at least forty-five (45) calendar days before the proposed retirement or separation date. The notice period is intended to provide the College adequate time for operational, staffing, and budgetary planning. Failure to provide the required notice may result in denial of the application or approval of a retirement or separation date later than the date requested by the employee. The College may waive, shorten, or extend the notice requirement when it determines such action is in the best interest of the College.
Lump Sum Retirement Incentive - An employee who satisfies the Rule of 75 and has a minimum of ten (10) years of Creditable Full-time Service is eligible to apply for a one-time Lump Sum Retirement Incentive payment. Receipt of the payment is contingent upon approval of the employee's application by the College.
1. The Lump Sum Retirement Incentive payment shall be equal to fifty percent (50%) of the employee's annual base salary in effect on the employee's separation date, not to exceed fifty thousand dollars ($50,000). The Lump Sum Retirement Incentive payment provided under this policy is a retirement incentive and not compensation for services rendered. The Lump Sum Retirement Incentive payment shall not be included in compensation for purposes of determining retirement benefits, retirement contributions, service credit, or any other benefit calculation under Utah Retirement Systems (URS), any College-sponsored TIAA retirement plan, or the College's Social Security Replacement program. No employer contributions and no employee contributions shall be made on the stipend payment under any such program.
2. The payment shall be made in a single lump sum following the employee's separation from employment and in accordance with applicable payroll, tax withholding, and reporting requirements.
3. An employee approved for the Lump Sum Retirement Incentive may irrevocably elect, on forms approved by the College, to have all or a portion of the incentive deposited as an employer contribution into an existing College-sponsored retirement account maintained by the employee. Such contributions are subject to the terms of the applicable retirement plan and any contribution limits imposed by federal or state law. To the extent the elected contribution exceeds applicable legal or plan limits, the excess amount shall be paid directly to the employee and shall be subject to applicable tax withholding and deductions.
4. No employee shall have a vested right to receive a Lump Sum Retirement Incentive unless and until the College approves the employee's participation and all requirements established under the applicable retirement incentive offering have been satisfied.
Health Insurance Bridge Program - An employee who satisfies the Rule of 75 and has at least ten (10) years of Creditable Full-time Service is eligible to apply to participate in the Health Insurance Bridge Program. Participation is contingent upon approval of the employee's application by the College.
1. Medical and Dental Insurance - Employees who receive approval to participate in the Health Insurance Bridge Program will continue to be enrolled in College-sponsored medical and dental benefit plans subject to the eligibility and termination provisions of this section, for a period not to exceed ten (10) consecutive years following retirement. The College will contribute toward insurance premiums for participating retirees in the same amount it contributes for active employees. Continued enrollment is contingent upon the retiree contributing the balance of the premium not covered by the College for the first five (5) years and the full early retiree premium for the following five (5) years.
  1. Retirees may also elect to continue medical and dental coverage for eligible dependents through the College's group insurance plans, subject to the eligibility requirements, enrollment rules, and other terms of the applicable benefit plans, insurance contracts, and governing plan documents. The retiree shall be responsible for any portion of dependent coverage premiums not paid by the College under this policy.
2. Termination of Coverage - The retiree's separation agreement shall specify the date bridge coverage terminates. Unless otherwise specified in the separation agreement, bridge coverage shall terminate upon the earliest of: (a) the retiree becoming eligible for Medicare; (b) the expiration of ten (10) consecutive years following retirement; or (c) the retiree's voluntary termination of coverage.
3. Death of Retiree - Upon the death of a retiree prior to becoming eligible for Medicare, medical and dental coverage may continue for up to six (6) months for a spouse or dependent who was enrolled in the applicable plan immediately prior to the retiree's death. During such continuation period, premium contributions shall remain subject to the same cost-sharing arrangement that applied immediately prior to the retiree's death unless otherwise determined by the College.
4. Continued Availability of Coverage – Coverage under this section remains subject to the continued availability of the applicable benefit plans, carrier participation, and compliance with applicable law.
Pre-2009 Retirement Incentive Plan
1. Eligibility - Participation in the Pre-2009 Retirement Incentive Plan (hereafter “Plan”) is subject to administrative approval. The College may approve, deny, limit, defer, or condition participation based upon institutional, operational, financial, workforce planning, or other legitimate business considerations. Employees are eligible to apply for participation in the Plan if they:
  1. were hired prior to December 1, 2009;
  2. are employed in a Full-time (40 hours per week) College position for nine (9) months or more during a fiscal year;
  3. have at least ten (10) years of Creditable Full-time Service;
  4. retire prior to becoming eligible to receive Unreduced Social Security Benefits; and
  5. satisfy one of the following age and service requirements:
    - Age 62 with at least 10 years of Creditable Full-time Service; or
    - Age 60 with at least 20 years of Creditable Full-time Service; or
    - Any age with at least 25 years of Creditable Full-time Service.
2. Participation in the Plan is neither an entitlement nor a right automatically available to all persons who meet the eligibility criteria. The College reserves the right to limit the total number of participants in the program in order to preserve the viability of the College’s basic programs and the integrity of its financial resources.
  1. Ineligible Employees - The following employees are not eligible for participation in the Plan:
    - Any employee who has received a written notice of termination.
    - Any employee who is retiring under the disability provisions of the Utah State Retirement Act.
    - Any employee who has previously received an early retirement incentive from the College or is currently receiving Utah State Retirement System benefits.
    - Any employee hired into a Full-time (40 hours per week) position after December 1, 2009.
3. Employee Responsibility - Employees should consult with qualified attorneys, accountants, or financial advisors of their own choosing before making retirement decisions.
4. Retirement Contribution - Retirees who receive approval to participate in the Plan will receive a contribution of fifteen percent (15%) of their annual wages per year into the employee’s 401(k) or 403(b) account, or to a qualified Health Savings Account (HSA), (not to exceed the level legally permissible under prevailing tax law) for three (3) years or until they become eligible to receive Unreduced Social Security Benefits, whichever occurs first. The contribution will be prorated for eligible periods of less than a full year or years.
5. Purchasing Additional Service Credit - Approved employees may voluntarily authorize the College to purchase additional service credit for them in Utah Retirement Systems by applying some or all of their eligible early retirement incentive contribution on a one-time lump sum basis. Eligible employees shall notify the Payroll Office in writing of such a request no later than the early retirement notification deadlines as indicated in this policy.
6. Payment Timing – The first payment shall occur within 180 days of retirement from the College. The second payment shall occur in February of the first year following a complete calendar year without contributions to the URS or TIAA retirement account for the original position from which the employee retired. The third payment shall occur the following February.
7. If the retiree dies, the amount remaining to be paid under the Retirement Contribution section of this Plan shall be paid to the retiree's designated beneficiary.
8. Sick Leave Payout - Employees who retire prior to the time they become eligible to receive Unreduced Social Security Benefits, who receive approval to participate in the Plan and who had a sick leave balance as of June 30, 2004 may receive a payout of a portion of sick leave balances. Sick leave balances as of June 30, 2004 are available for use as sick leave, but if used as leave days, they are no longer available for a payout at early retirement. Further, sick leave days used from the June 30, 2004 balance cannot be replaced as days available for payout by unused sick leave days from subsequent periods. Employees approved for the Plan may select one of the following options for a sick leave payout:
  1. Option One - An amount paid as a lump sum employer contribution to the employee’s 401(k) or 403(b) account, or to a qualified Health Savings Account (HSA), (not to exceed the level legally permissible under prevailing tax law) equal to twenty percent (20%) of the value of the employee’s June 30, 2004 sick leave balance based on the employee’s current position on the pay schedule.
  2. Option Two - An amount equal to twenty percent (20%) of the value of the employee’s June 30, 2004 sick leave balance based on the employee’s current position on the pay schedule paid by applying some or all of the payment as a voluntarily purchase of additional salary service credit in Utah Retirement Systems. Eligible employees shall notify the Payroll Office in writing of such a request no later than the early retirement notification deadlines as indicated in this policy.
  3. Option Three - A credit equal to twenty percent (20%) of the value of the employee’s June 30, 2004 sick leave balance based upon the employee’s current position on the pay schedule to be applied toward the payment of health insurance premiums during retirement.
9. Post-Retirement Health and Dental Insurance - Employees who receive approval to participate in the Plan will continue to be enrolled in group medical and dental programs until they become eligible for Medicare, or for the ten (10) consecutive years following retirement, whichever occurs first. The College will contribute toward insurance premiums for participating retirees in the same amount it contributes for active employees. This enrollment is contingent upon the retirees contributing the balance of the premium not covered by the College for the first three (3) years and the full premium for the following seven (7) years. Retirees may also elect to continue medical and dental coverage for eligible dependents through the College's group insurance plans, subject to the eligibility requirements, enrollment rules, and other terms of the applicable benefit plans, insurance contracts, and governing plan documents. The retiree shall be responsible for any portion of dependent coverage premiums not paid by the College under this policy.
10. Application - To apply for the Plan, an employee must notify the Human Resources department in writing by submitting a completed application form at least forty five (45) days prior to their planned date of retirement. An employee may submit a written request to Human Resources to rescind the retirement request during the forty five (45) days. Unless the College grants the request to rescind, the retirement shall be considered final.
11. Official Forms - No verbal communications or letters of intent will be accepted as application for participation in the Plan. Without appropriate completion of the official application form no employee shall qualify for nor receive any of the benefits provided through the program.
12. Approval of Application - The application for the Plan shall be forwarded to the College administration. Benefits under this Plan shall be due to retiring employees only with administrative approval.
13. Program Non-coordination - Benefits of this Plan provided by the College are independent of Utah Retirement Systems and TIAA. Benefits of this Plan are not intended to be combined or coordinated with the early retirement provisions outlined in Utah Code section 67- 19-14.
14. Last Day Worked - For purposes of determining eligibility for the Plan, an employee’s eligibility to receive Unreduced Social Security Benefits shall be determined as of the employee’s last day worked. Paid leave occurring after the employee’s last day worked shall not be considered for purposes of determining eligibility for the Plan.
Voluntary Separation Incentive Plan (“VSIP”)
1. A Voluntary Separation Incentive Program (VSIP) may be offered by the College when authorized by the President or designee. The College may, at its sole discretion, establish a Voluntary Separation Incentive Plan (VSIP) when it determines that staffing levels should be adjusted due to enrollment, budgetary, operational, organizational, or strategic considerations. Participation in a VSIP is voluntary and subject to the eligibility requirements, application procedures, selection criteria, and other provisions of this policy. The College reserves the right to determine whether to offer a VSIP and the positions or employee groups eligible to participate. Any VSIP authorized under this policy is limited to the application period designated by the College and shall be administered in accordance with the terms and conditions established herein.
2. Exclusions – The College may exclude positions, departments, programs, work groups, employee classifications, funding sources, or other categories of employees from a particular VSIP offering when necessary to address operational, budgetary, accreditation, workforce planning, succession planning, or other institutional needs.
  1. Employees who have received notice of termination for cause, are presently on an Employee Plan for Improvement (EPI) that could result in termination, or are otherwise ineligible under the terms of a specific VSIP offering may be excluded from participation.
3. Minimum Eligibility Requirements – To be eligible to apply for a VSIP, an employee must:
  1. Be employed in a Full-time position with the College on the eligibility date established by the College;
  2. Satisfy the Rule of 75 (see Definitions); and
  3. Meet any additional eligibility requirements established by the College for a specific VSIP offering.
4. Application and Approval - Eligible employees may submit an application during the period established by the College. Submission of an application does not guarantee acceptance, and the College may approve or deny participation based on institutional needs.
  1. The College reserves the right to approve or deny any application, in whole or in part, and to limit the number of participants based on institutional needs, financial considerations, operational requirements, workforce planning objectives, or other factors determined by the College to be in its best interests. In evaluating applications, the College may consider staffing needs, accreditation requirements, succession planning, retention of critical skills, operational continuity, budgetary considerations, and other legitimate institutional interests.
  2. The decision of the College regarding approval, denial, or acceptance of a VSIP application is final.
5. VSIP Benefits - Employees approved for participation in a VSIP may be eligible to receive benefits or incentives authorized by the College for the applicable VSIP offering. The College shall determine the nature, amount, duration, and conditions of any incentive or benefit provided under a VSIP.
  1. Benefits offered under a VSIP may include, but are not limited to:
    - Bridge Medical and Dental Coverage- The College may permit an approved VSIP participant to continue participation in College-sponsored medical and dental benefit plans for a period established by the College, subject to the terms and conditions of the applicable benefit plans and the specific VSIP offering.
    - If offered by the College, a bridge medical and dental benefit may permit an approved VSIP participant to remain enrolled in the College-sponsored medical and dental plans following separation from employment.
    - The duration of eligibility for bridge coverage shall be established by the College and communicated in the applicable VSIP offering.
    - The College may pay all or a portion of the premium costs associated with bridge coverage, as determined under the applicable VSIP offering.
    - Participation in bridge coverage is subject to the terms, conditions, limitations, and continued availability of the applicable benefit plans.
    - The College reserves the right to modify or discontinue bridge coverage to the extent required by changes in law, regulation, plan terms, carrier requirements, or other circumstances beyond the College's control.
    - Bridge coverage shall terminate upon the earliest of: a. Expiration of the bridge coverage period established by the College; b. The participant becoming ineligible under the applicable benefit plan; c. The participant's failure to satisfy required conditions of participation; or d. Any other event specified in the applicable VSIP offering.
6. Other Incentives - The College may provide additional incentives, including lump-sum payments, phased payments, or other benefits, as specified in the applicable VSIP offering.
7. No Vested Right - No employee has a vested or contractual right to any incentive, payment, subsidy, or benefit under a VSIP except as expressly provided in a written agreement approved by the College.

Effective Date: 01 January 2027

Approvals and Notes
Revised Board Approval: 24 September 2026
Revised President’s Council Approval: 21 September 2026-policy name changed from Early Retirement Incentives Policy to Retirement Incentives Policy
Revised Board Approval: 28 June 2018
Revised President’s Council Approval: 23 April 2018
Revised Board Approval: 26 March 2015
Revised Board Approval: 28 February 2013
Revised Board Approval: 28 October 2010
Revised Board Approval: 3 December 2009
Revised Board Approval: 26 October 2006
Revised Board Approval: 26 August 2004
Board Approval: 27 May 2004

Retirement Incentives Policy - Human Resources Policy and Procedures