By Neil Offen
noffen@heraldsun.com; 419-6646
DURHAM -- Duke University has not yet made a final decision on whether to offer early retirement incentive packages to a broad range of administrative employees, but hopes to decide within the next month.
"We're still having ongoing discussions about that," said Kyle Cavanaugh, Duke's vice president for human resources. "This is a very complicated decision, much more complicated than the one before."
The one before was an early buyout offer to biweekly salaried employees -- generally at the lower end of the pay scale -- who were on the university's defined benefit retirement program. The offer was part of Duke's plan -- in response to declines in major gifts and a shrinking endowment -- to trim $125 million from the university's $2 billion operating budget over the next three years.
Of the 825 employees who were eligible for the initial buyout, 294, or around 35 percent, accepted. That was a much higher percentage than officials had expected, and the retirements will save the university about $15 million.
But officials have acknowledged that more cutting needs to be done, and so have been talking about other potential savings.
They remain unsure, Cavanaugh said, if an additional retirement incentive plan, this one for more higher-paid, salaried staff, is the correct "tool" to use.
"If you create a financial incentive for someone [who would qualify for that package], the local budget has to support that incentive," he said. "That means each area [of the university] would be responsible for the cost, which is why we're looking at the actual dollar impact of such a plan."
Additionally, many of the positions that would be targeted by a new plan are funded off grants and contracts.
"If they are paid from an external funding agency, as with grants and contracts, if we offered and they accepted, there would literally be no savings against our institutional budget," Cavanaugh said. "And while the grant itself would not have the funds, we would have to pay the incentive. So not only would we not save any money, it actually would cost us."
If the university decides not to proceed with the plan, it would still to have to find other ways of cutting the budget.
"We are continuing, literally daily, to trying to identify potential cost reductions and savings opportunities," Cavanaugh said. "We will continue to do that whatever the decision we make on the retirement plan."
