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Higher education retirees were offered lucrative incentives

01:00 AM EST on Sunday, December 7, 2008

By Katherine Gregg

Journal State House Bureau

PROVIDENCE — Over the last 25 years, former Rhode Island College President John Nazarian donated hundreds of thousands of dollars — and three baby grand pianos — to the school where he spent his undergraduate years, his 54-year academic career and his adult life.

And when he retired in June at the age of 75, the college gave Nazarian something back: a $205,008 severance check.

The check included $67,890 for unused vacation time, $31,366 for unused sick time and $29,902 in deferred pay from the 1991 budget crisis that was belatedly paid to him based on the $189,625 a year he was making when he retired 17 years later.

It also included a $75,850 “retirement incentive.”

While the University of Rhode Island offered its workers a $20,000 incentive to retire, RIC and the Community College of Rhode Island offered their employees 40 percent of their pay to leave before the end of June, a decision that provided tens of thousands of extra dollars to dozens of their highest paid professors and administrators.

The Carcieri administration last month released figures on severance payments to recent state retirees. At the time, information was not available on the incentive payments given to the state college and URI workers. The administration subsequently provided that data.

While the administration had, for example, previously reported a $129,158 severance payment to Nazarian, the new information showed his total payment was $205,008.

The incentive paid Nazarian, before he retired with a $144,259-a-year pension was, by far, the largest. Also at the top were former CCRI dean of administration Stephen Marginson, who received a $43,255 incentive that boosted his severance pay to $97,603 and RIC’s former director of institutional research, Donna Konicki, who got a $37,658 incentive that hiked her severance pay to $88,223.

Overall, 90 employees in the state college and university system received a total of $2.3 million in incentives, ranging from $13,870 to the $75,850 paid to Nazarian. The college and university employees were among 1,521 state workers who retired between May 1 and Sept. 30 as part of an effort to cut the state payroll.

All told, the state paid out $18.8 million to the retirees, including unused sick and vacation time and other payments.

While those in the state college system got cash incentives to leave, other state employees were persuaded to do so to avoid paying more for their post-retirement health insurance if they remained on the payroll past Sept. 30.

Asked why URI bumped its retirement incentive from $7,000 to $20,000 last spring — and why RIC would offer a $75,850 retirement incentive to a 75-year-old — Steven Maurano, a spokesman for the state Office of Higher Education, said the decisions were made before the state slid into its current budget crisis.

Maurano said the thinking went like this: “There is no mandatory retirement age in higher education, so we have professors at the university and the other institutions [who are] well into their 70s, so you put a retirement incentive in place to encourage those older faculty members to retire.

“It allows you to bring new blood, if you will, into the faculty. Younger professors maybe have a little bit more energy and may be willing to assume higher workloads. … It also allows you to bring in faculty members at a lower level of pay than you are probably paying someone who has been at the university for [20 years] at the top of their pay scale.”

But the state’s economy has gone into a tailspin since the decision was made to offer retirement incentives of this magnitude. Maurano said the state colleges and university had 194 more openings last month than they did the same month a year ago, and limited ability to fill the jobs.

“We actually have quite a few holes in our teaching and faculty ranks,” Maurano said.

Looked at from another perspective, Maurano said, leaving the 194 jobs open would save the colleges and the university a net $12.2 million annually in salaries and benefits.

Konicki, the former RIC research director, said health care, not the opportunity to retire with a $37,658 bonus, was the deciding factor for her. She said staying would have required her to pay 100 percent of the cost of her post-retirement health insurance until she turned 65. Leaving allowed her to get a subsidized health package that is no longer available to certain college employees.

Konicki said she understands “why taxpayers might be upset with the amount of [unused] sick time we are allowed to accrue. I know it is much higher than in the private sector.” On the other hand, she said, she has “not taken a vacation in years,” worked late, and then worked many more hours from home for which she was not paid during her 35 years at RIC.

Nazarian was unavailable for comment.

kgregg@projo.com

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