University of California
Irvine Campus
April 15, 2009

Voluntary Separation Incentive Program (VSIP)

1. Program Objective
2. Eligibility
3. Voluntary Severance Requirements
4. Severance Pay and Benefits
5. Health and Welfare Benefits Coverage
6. No Right to Continued Employment
7. Amendment and Separation
8. Definitions

1. Program Objective

The University of California, Irvine (UCI) is pleased to offer eligible employees an oppor­tunity to participate in the University of California, Irvine Voluntary Separation Incentive Program (the “Voluntary Separation Incentive Program”). The objective is to reduce spending and the workforce in order to minimize the need for involuntary layoffs. Defined terms shall have the meaning set forth in Section 8.

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2. Eligibility

All regular status (non probationary) career staff employees employed by the campus are eligible to participate in the Voluntary Separation Incentive Program (VSIP) except as identified below. 

• An employee in the Senior Management Group (SMG);
• An employee at the Management and Senior Professionals level MSP VIII-IX or equivalents;
• An employee in an office reporting directly to The Regents (including the Office of the General Counsel, Compliance/Audit.)
• An employee with an appointment of less than 50%;
• Temporary staff appointments (limited appointments, casual/restricted appointments, employment contract appointments, floater appoint­ments in UCI Campus Temporary Employment Services (CTES), and per diems);
• An employee receiving retirement income or who has received income either in regular installments or in a lump sum from the University of California Retirement Plan;  
• An employee who, prior to September 30, 2009, is entitled to separation or severance pay under another arrange­ment, agreement or settlement with the University that is not part of this Voluntary Separation Incentive Program;
• An employee with less than one year of service;
• An employee in sworn police service position;
• Other positions identified by the schools and coordinating points and recommended by the Voluntary Separation Incentive Program Compliance committee will be forwarded to the Executive Vice Chancellor and Provost for final approval.  Approval of additional exclusions from VSIP eligibility will be based on operational needs, including, but not limited to

• the inability to discontinue or redistribute the functions performed by the position
• the unique or highly specialized skills, knowledge and abilities required for the position.

Eligibility for represented employees will be determined by collective bargaining as appropriate. 

Eligible employees include employees on an approved leave of absence.
 
The University has the sole discretion to establish eligibility criteria for the Voluntary Separation Incentive Program and to determine selection for participation.

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3. Voluntary Severance Requirements

An eligible employee must meet each of the requirements in this Section 3 in order to participate in the Voluntary Separation Incentive Program.

• Election.  Eligible employees may elect to participate in the Voluntary Separation Incentive Program by submitting their approved election form (refer to section 3.2) to the UCI campus Human Resources Office on or before June 12, 2009. The election form must be approved by the participant’s operational unit prior to submittal to UCI campus Human Resources Office.  In order for an election to be valid under the Voluntary Separation Incentive Program, the election must include a separation date of August 31, 2009 or September 30, 2009.  In order to be entitled to severance pay as provided in Section 4, an employee must separate employment on a date agreed upon by the supervisor and the employee (either August 31, 2009 or September 30, 2009), unless the election requires approval by the President of the University of California (see section 4.1.4).  Separation dates for elections requiring Presidential approval will be determined following approval by the President.

• Release.  In order to receive the severance payment provided below, an Electing Participant must separate employment and sign a release of claims.

• An Electing Participant who is age 40 or over at the date of separation shall have at least 45 days to consider and sign a release of claims, including claims under the Age Discrimination in Employ­ment Act, and accept the offer of severance pay. The Electing Participant may sign the release at any time before the end of the 45 day period.  To comply with the Age Discrimination in Employment Act (ADEA), Electing Participants age 40 or over will be given a disclosure of statistical data report at the time they receive the release of claims form.

• The Electing Participant shall have seven (7) days after signing the release of claims to revoke the release and refuse the acceptance of severance pay.

• Severance will be paid shortly after the later of (1) the end of the seven (7) day revocation period, (2) on the day of the Electing Participant’s separation, or (3) following approval by the President per section 4.1.4 whichever is later.

• An Electing Participant who is under age 40 must sign a general release of claims in order to receive payment of severance upon separation of employment.  The Electing Participant will be given a minimum of two (2) weeks to consider the release.

• Continued Employment.  In order to be eligible for any benefits provided in Section 4, the Electing Participant must continue to perform as a satisfactory employee until the selection date of separation.

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4.  Severance Pay and Benefits. 

Severance payments will not be considered covered compensation for UCRP purposes.

4.1 Severance Pay. No individual severance payment granted under the program can exceed $75,000.  An Electing Participant who fulfills the requirements under Eligibility and Severance Requirements sections will receive severance pay assigned to his or her employment classification as follows:

4.1.1 Professional and Support Staff (PSS) who meet the requirements shall receive severance pay in the amount of one (1) week’s pay for each full year of service up to a maximum of 16 weeks’ pay.

4.1.2 Managers and Senior Professionals (MSP I–VII) who meet the requirements shall receive severance pay in the amount of one month’s pay (1/12 of annual salary) for each full year of service up to a maximum of six (6) months’ pay.

4.1.3 Severance for employees represented by a union will be determined by collective bargaining as appropriate.

4.1.4 Approval Requirement.  Any individual severance payment of $50,000 to $75,000 must be approved by the President.  Such severance will not be paid until after the appropriate approval has been obtained.

4.2 Outplacement Benefits and Services. An Electing Participant shall be eligible for limited outplacement services provided by Lee Hecht Harrison, as defined by the University.

• Job Search Training
• Resume Development Assistance
• Workshop Classes on:
• How to Interview
• How to negotiate your salary and transition to a new role
• One month access to Lee Hecht Harrison’s online Career Resources Network (CRN) site

4.3 Time and Form of Severance Pay. Any severance pay due to an Electing Participant shall be paid following separation from employment and delivery of a signed release in accordance with Section 3,Voluntary Severance Requirements.

The University shall withhold appropriate federal and state income and employment taxes from severance pay.

4.4 Service for Calculating Severance.

• Service for purposes of calculating severance is based on full time equivalent months of University employment service as reflected in the University’s records and is determined at the sole discretion of the University. 
• Employment prior to a break in service is not counted as service.
• Only full years of service will count toward the calculation of severance pay. 

4.5 Reemployment.  An Electing Participant is not to be reemployed for a period of 3 years (36 months) from his or her separation date under the VSIP:

• by any University of California location
• in any appointment type
• at any percentage of time
• in any classification

Employment includes any relationship with UC for which compensation is paid to the individual via the University payroll system, including but not limited to all career appointments (regardless of percentage of time), limited, floater and contract appointments, and rehired retirees covered by the University’s policy on Reemployment of UC Retired Employees into Senior Management Group and Staff Positions and Academic Personnel Manual policies as applicable.

4.6 Repayment.

4.6.1 If an Electing Participant returns to any employment at the University during the 3 years following separation under the VSIP, repayment of severance to the University is required as a condition of employment in accordance with the below provisions, provided that the amount retained by the employee is at least $1000, which the Electing Participant may retain as consideration for signing the release of claims. If the amount retained by the employee would be less than $1000, then the employee repays only that portion of the payback amount that allows the employee to retain $1000.

• If reemployment occurs within 1 – 12 months after separation, the entire amount of the severance received must be repaid, less $1000 for the release of claims.
• If reemployment occurs within 13 – 24 months after separation, 50% of the severance received must be repaid, provided that the amount retained from the original lump sum payment by the employee is at least $1000 (if not, then all but $1,000 of the severance must be repaid).
• If reemployment occurs within 25 – 36 months after separation, 25% of the severance received must be repaid, provided that the amount retained from the original lump sum payment by the employee is at least $1000 (if not, then all but $1,000 of the severance must be repaid).

4.6.2 IRS regulations determine if the repayment is the net or gross amount of the severance payment received, depending upon whether the repayment is made in the same year (net amount  due) or a subsequent year (gross amount due).

4.6.3 Repayment options are available to be in accordance with existing payroll policy.

Examples:

• An Electing Participant who receives $1500 severance and is reemployed by UC after 6 months will be required to repay $500 ($1500-$1000 = $500); if reemployed after18 months, $500 must be repaid ($1500 X 50% = $750, but $1000 total is to be retained for consideration, therefore, $250 is deducted from the $750 to arrive at the $1000 to be retained, leaving $500 to be repaid); if reemployed after 30 months, $375 must be repaid ($1500 X 25% = $375).

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5. Health and Welfare Benefits Coverage

The University’s normal contribution (if applicable) for the Electing Participant’s medical, dental, vision, wellness, and Basic life insurance coverage will continue through the end of the month following the date of separation. The Electing Partici­pant’s coverage will terminate on this date unless he/she elects COBRA coverage or is eligible for retiree health and welfare benefits under the University’s programs, in which case the terms of the retiree programs shall be applicable.

In accordance with COBRA requirements, the Electing Participant may continue medical, dental, vision, wellness, or health FSA coverage at the applicable COBRA group rates. These premiums must be paid monthly, in advance, by the Electing Participant in order to continue coverage. In addition, the Electing Participant shall have thirty-one (31) calendar days from the end of coverage to convert legal, life, and Accidental Death and Dismemberment to individual plans at his or her expense or elect portability for basic, supplemental and/or dependent life insurance coverage.

An Electing Participant’s Short-term and Supplemental disability insurance terminates on the last date of University employment and may not be continued or converted.

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6. No Right to Continued Employment

The Voluntary Separation Incentive Program does not grant or create any right to continued employment and any preexisting rules, policies or agreements regarding the employment of Electing Participants continue to apply.

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7. Amendment and Separation

The University may amend or terminate the Voluntary Separation Incentive Program at any time and for any reason before any elections are made under Section 3.1.  The Voluntary Separation Incentive Program shall automatically terminate December 31, 2009.

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8. Definitions

8.1 “Electing Participant” is an eligible employee as set forth in Section 2 and who elects to participate in the Voluntary Separation Incentive Program pursuant to Section 3.

8.2 “University” means the University of California.

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