10/23/2009 Incentives to retire

Fact Checker here. Reading the following is voluntary; if you think my writing is tedious, as "Duke Parent" wrote the other day, then skip this.

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The 2nd incentive plan for university employees to retire is tacit admission from Duke that the first was very flawed indeed. Translation: bad management.

The 2nd targets employees who are in jobs that will be eliminated or restructured if they become vacant. The first was open to employees whose combined age and years of service equaled or exceeded a magic number -- even if they were in vital positions. Big difference.

295 employees accepted the first incentive plan. And many of them were in critical functions and have had to be replaced. How many? Duke has not provided updates, but my best estimate from scraps of information is 25 percent.

Thus we find ourselves saddled with the cost of incentives for many, plus their higher pensions for years and years, while still having to put dozens of replacements on the payroll.

Another big difference: the people in the first go-around had both length of service and age added into their pension calculations -- presumably meaning they are getting larger checks earlier in their lives than they ever thought possible. (Duke has never confirmed this nor denied it) In the new go-around, tacit admission of a flaw, we find employees who say "yes" will not see their pensions change at all.

Careful readers of the Chronicle may have seen how much the first incentives are SAVING the university. Let's go to page 23, note 10 of the new annual Financial Report for 2008-09, wherein you will find in small type:

"The University recorded special termination cost of $17,548,000 (for pensions) and $763,000 (for the retired employee health plan..." for the first go-around.

Big savings???? This year??? C'mon!!!

We've heard all sorts of grandiose, pat-my-own-back statements from administrators, ranging all the way to the one in today's Chronicle, which has no attribution:

"An early retirement incentive offered to biweekly employees over the summer has already saved the University about $20 million."

Already!!!!!

The Chronicle archive turns up other statistics too: $10 million saved, $15 million saved. Readers, take your pick!

Here is the Fact Checker challenge to the Administration -- share with us all your raw numbers, post your calculations on the website that you set up to provide information on the fiscal crisis. Chronicle, you should chase these numbers too and use your abacus.

Show me the numbers, and I shall be the first to offer congratulations. Congratulations loud and clear. As Ronald Reagan said, "Trust, but verify."

Readers, think about what they want us to believe: $20 million in savings by shedding 295 employees. This means we save an average of $67,796 from each. Remember please that most of these were food service workers, grounds-keepers and of course the housekeepers who cleaned dorms on weekends.

The administration should show us

1) the salary of each employee -- without name -- as it contributes to the savings total.

2) and yes, information about the demographics of each employee.

3) how much is being saved in the first year when the employees will only be gone for part of the fiscal year, and how much will be saved down the road. Theoretically.

In this way we can be assured that the burden of the fiscal crisis is being fairly spread and absorbed across our community.

Final note on vacillation: today's Chronicle quotes executive vice president and chief financial guru Tallman Trask:

"Trask said he 'would be surprised' if 50 employees accept this latest incentive."

Yes indeed. Check your archives Chronicle. Trask's deputy is going around saying he anticipates only 20.

Let us all remember, the people who have just been offered incentive to retire, are facing a major decision in their lives. Unfortunately, the administration promised and promised to reveal this plan much earlier -- at one point the PR vice president covered all the bases and gave himself extra time for another delay by promising the details in August.

Here we are in late October, and all these people now face rush, rush, rush, having to give answers in a few weeks. Why? Because our administration failed to deliver the plan when it said they would.

People who have worked hard for Duke and dedicated themselves to this place for decades now have the gun to their head. Knowing their positions have been identified as targets of the first go-around in layoffs, there is nowhere for them to duck if they say no.