Federal Terminal Agreement Program

• Updated: May 2008
• Primary Contact: See Contacts Section.

The University's Federal Terminal Agreement Program is an internal University retirement program provided to eligible tenured faculty members and academic professionals with continuous appointment. The Federal Terminal Agreement Program is designed to facilitate change within units by providing remuneration in return for tenure or continuous appointment resignation. The individual must terminate employment and surrender tenure or rights to continuous appointment prior to receiving any benefit under this agreement.

Provisions and Terms

Scope

Eligibility

Only tenured faculty members (94xx; P appointment type) with federal appointments and academic professionals (97xx, 9621-9630; G appointment type) with continuous federal appointments of at least 75 percent on an appointment term of 9-months or more are eligible for the program. Employees must be at least 52 years of age and have at least 10 consecutive Years of Service ending on their Last Day of Regular Employment.

The Federal Terminal Agreement Program is not available to any individual who opts to participate in another University exit program, voluntary or involuntary, to which the University contributes or has contributed monies, including the Academic Disability Program.

It must be demonstrated in a cover letter that the use of the terminal agreement option, which is not available to the faculty and academic professional staff in general, is in the best interest of the University, that is, in keeping with specific programmatic goals or other special circumstances. Any arrangement must be in writing and signed by the faculty member or academic professional; the unit administrator, dean, or senior administrator; and the Office of Human Resources before the terms become binding. An agreement may be changed only by mutual consent of all parties. Any amendment to the original agreement must comply with the policy, must be in writing, must be signed by the parties, and is not effective until signed by the senior administrator (or designee) and the Office of Human Resources.

Termination of Employment

Termination from University employment becomes effective on the Last Day of Regular Employment. At that time the individual will sign a statement releasing all potential claims against the University on the Last Day of Regular Employment and forward it to Employee Benefits. Release statements signed prior to this date will not be accepted. The individual must terminate employment and surrender tenure or rights to continuous appointment prior to receiving any benefit under this agreement. The individual will receive no benefit under this agreement until the release is signed and received by Employee Benefits. After the Last Day of Regular Employment, the individual may be employed with the University on a Special Contract only. No other reemployment is permitted.

Benefits

1. Benefits Offered through the Federal Terminal Agreement:

    

   1. Salary Payment

      A cash payment will be made to the individual, equal to one year's Current Annual Base Salary at the time the release is signed, plus an additional percentage based upon the University's contribution to any mandatory federal retirement plans in which the individual participates. This additional payment is made because the salary payment in this section is not eligible for contributions in any other retirement plan or program. This payment will be made in a lump sum shortly after the Last Day of Regular Employment.

    

   2. Vacation

      Individuals are encouraged to use vacation prior to their Last Day of Regular Employment, but payment for unused vacation days will be made shortly after that day, provided that proper documentation is provided.

    

   3. Other Retirement Plan Benefits

      All contributions to University-sponsored retirement plans will cease as of the Last Day of Regular Employment. As indicated above, the salary payment is ineligible for any retirement plan contributions. After the Last Day of Regular Employment, the individual will have such access to existing retirement plan accounts as provided by the various plan documents and investment contracts.

2. Benefit Cessation

   All benefits not listed in the Benefits section of this policy, or continued at the individual's expense under the Consolidated Omnibus Budget Reconciliation Act (COBRA), will cease on the individual's Last Day of Regular Employment.

3. Relation to Other Benefits Programs

   The continuance of benefits coverage available under COBRA runs concurrently with the benefits extended under the Federal Terminal Agreement.

This policy implements the Board of Regents Policy: Faculty and Staff Retirement. The Federal Terminal Agreement Program is offered by the University to eligible tenured faculty on a federal appointment and to academic professionals on a continuous federal appointment in an effort to support the facilitation of change within collegiate and administrative units.

• Implementing the Federal Terminal Agreement Program

See Appendices for packet of supporting Forms/Instructions.

Current Annual Base Salary

The annual base compensation rate for the individual's tenured/continuous appointment in effect on the Last Day of Regular Employment. For the purposes of calculation of the salary payment, annual base salary must reflect a) a faculty/academic professional rate appropriate to their discipline; and b) a term of appointment (i.e. 9-month, 10-month or 12-month) consistent with that of other faculty or academic professionals in their tenure/continuous appointment home unit. Annual base salary does not include augmentations, summer appointments, or any other compensation. For individuals with appointments of less than 100 percent, the salary payment will be based on the corresponding proportion of the 100 percent appointment base salary.

Last Day of Regular Employment

The last day of work as a tenured faculty member or continuous appointment academic professional.

Senior Administrator

The president, chancellor, senior vice president, or vice president, as appropriate.

Special Contract

A non-benefits eligible appointment or independent contractor arrangement, if eligible.

Unit Administrator

The department, unit, or division head, as appropriate.

Year of Service

A 12-month period during which the individual held a tenured or continuous academic appointment of at least 75 percent on at least a 9-month basis at the University of Minnesota. Approved unpaid leaves of absence will count toward a Year of Service, if the individual's appointment was at least 75 percent during the leave.

Tenured faculty member or continuous appointment academic professional on Federal appointment

• Review all program documentation, forms, policy, and procedure.
• Consult legal counsel as appropriate.
• Schedule Last Day of Regular Employment with the unit administrator, dean or senior administrator, and the Office of Human Resources.
• Complete and submit the Federal Terminal Agreement, Benefit Election Form, and Release as required.

Responsible administrators/supervisors

• Review all program documentation, forms, policy, and procedure.
• Follow the procedure as outlined under “Implementing the Federal Terminal Agreement” document.

Office of Human Resources

• Advise administrators/supervisors on documentation, forms, policy, and procedure interpretation.
• Schedule Last Day of Regular Employment with the tenured faculty member or continuous appointment academic professional, and the unit administrator, dean, or senior administrator.
• Approve and sign all Federal Terminal Agreement documents.
• Ensure payment of all benefits under the Federal Terminal Agreement Program pursuant to the policy.

• Benefits Election Form (Federal Terminal Agreement Program) (PDF)
• Federal Terminal Agreement (PDF)
• Release (Federal Terminal Agreement Program) (PDF)

The above documents are all required to implement the policy.

• Federal Terminal Agreement Program FAQ

• Board of Regents Policy: Faculty and Staff Retirement
• Business Process: Ending an Appointment for Employee Receiving a Severance Package
• Academic Appointment Types

Amended:

May 2008 - Policy converted to the new University-wide format for administrative policies.

Adopted:

March 1982

Effective:

January 2003