Human Resources

Retirement Transition Options

Transitioning into retirement is a significant decision, which may require a phased approach for some. The University recognizes this need with its offering of retirement transition program options: Voluntary Partial Retirement (VPR) and Advanced Retirement Declaration (ARD). 

The VPR framework, a phased retirement program, sets the stage for an individual to shift gears into retirement through a phased approach by way of allowing additional time away from campus before transitioning to full retirement. 

Reduced work time and adjusting to a different income stream, while maintaining a full complement of benefits, are an advantage for those who participate. Purdue also benefits when VPR participants are able to transfer knowledge and skills to others, serving as a mentor to colleagues assuming new responsibilities.

VPR schedules allow for flexibility during such transitional times.

Sometimes academic assignments are scheduled so that all workload falls into one semester allowing the VPR participant to be away from campus the other semester. Other individuals find a year-round half-time arrangement is possible when workload is reduced. Occasionally, a seasoned professional moves to a special project for the duration of their VPR arrangement.

Annual Base Salary:The amount that you would be paid for working 100% for your regular work schedule. It does not include summer session, administrative supplements, awards, overloads/overtime or any additional forms of compensation beyond basic your annual rate.

Break in Service: Regulatory agencies like the IRS and the State of Indiana require at least a 30 day break from employment to retain the favorable tax treatment of retirement benefits. Plans for post-retirement return to work cannot be made prior to, or as part of a VPR agreement. Continuing in temporary or non-benefits eligible positions does not constitute a break in employment.

CUL or FTE: When a reduction in work assignment is made, a percentage of the full-time effort is expressed as CUL (Capacity Utilization Level) or FTE (Full Time Equivalency). This factor is used in calculating part-time arrangements. VPR participants generally request appointments between 50% and 80%.

DocuSign: An electronic signature and digital transaction management software tool to be used in the future to route requests to approve or revise VPR arrangements.

Responsible Executive Approver: The individual with the highest level budgetary responsibility in your organization is considered your Responsible Executive Approver. Typically Deans, Directors, Vice Presidents, Chancellors and Vice Chancellors hold this role.

Exemption Status: Employees are either exempt or non-exempt from the FLSA regulations. Eligibility for overtime pay is determined by salary and the type of work an employee performs. Under the FLSA rules, employees must be classified as non-exempt and will be eligible for overtime pay if their annual salary is below the Department of Labor’s standard salary level (see Compensation’s FLSA page for current figure, https://www.purdue.edu/hr/paytimepractices/wagehourpro/flsa.php

Pay Frequency: Scheduled pay dates and proportion of annual pay is based on the type employee’s assignment. Academic faculty pay is based on a fall and spring semester calendar. Staff holding administrative appointments are paid on a fiscal year basis with pay dates scheduled for the end of each month. Participants in VPR generally remain on the same pay schedule associated with their pre-VPR appointment.

Purdue Standard Retirement and Savings Plan (PSRSP): The 403b Base (10% university contribution) and 401a Mandatory (4% Employee contribution) defined contribution plans are offered to benefits-eligible faculty and staff in management/administrative/professional positions. The VPR program is available to participants of PSRSP who meet the age and years of service criteria.

Official Retiree: A faculty or staff member who meets the following criteria at the point they 1) separate from service or 2) gain approval to participate in VPR or 3) provide an Advance Retirement Declaration:

  • Age 55 or older, and
  • Employed by Purdue University in a benefits eligible position for 10 or more years

Eligibility

To participate, a faculty, executive, or professional/management staff member located on the West Lafayette campus must participate in the PSRS retirement program and meet the criteria for official retiree designation:

Age: 55 Years old or more
Years of Service 10 or more years of service in a benefits eligible position.

VPR Provisions

Program participation:

  • Determine reduced rate of employment. The proposed arrangement must align with the business needs of the department, with support from the supervisor and Unit Head. Approval is at the discretion of the Responsible Executive Approver.
  • Agreement may span up to five years. Duration of the retirement accord cannot be lengthened nor the percentage of time employed increased (both may decrease with mutual consent upon completion and submission of revised agreement).
  • Full retirement identified as part of a written agreement
  • Eligibility to participate in the PSRS retirement program is required throughout the duration of the program.
  • Maintain exemption status from the overtime requirements of the Fair Labor Standards Act (FLSA), including the minimum salary test. The resulting reduction in pay must remain above the minimum salary threshold for exempt employees throughout the entirety of the program.

Reduced schedule guidelines:

  • Reduced work schedule must be no greater than 80 percent or less than 50 percent effort each month, unless opting for 0% for a semester/6 months or longer.
  • Variable schedules require an elected percentage of working time (FTE) to remain in effect for a minimum of a semester or longer.
  • Current FLSA minimum salary threshold must be met at all times.
  • Preferred schedule arrangements include:
    • Option 1 – Ideal for AY faculty
      • Fall: 0%, Spring: 100% work effort
        OR
      • Fall: 100%, Spring: 0% work effort
    • Option 2 – Ideal for FY faculty and staff
      • A set percent of work time throughout the VPR arrangement within the prescribed 50-80% work effort limitations (i.e. working 50% or 75% effort year-round).
  • All schedule revisions require submission of a revised VPR agreement form.

VPR Benefits

During the period of reduced employment, the University will:

  • Continue healthcare, life insurance and long-term disability benefits based on full-time salary.
  • Contribute its regular contribution to the 403(b) Base retirement plan based on the staff member’s full-time basic annual budgeted salary. The staff member will continue 4% contribution to 401(a) Mandatory plan based on actual pay during the pay period.
  • Allow distributions from University retirement accounts while working under a VPR arrangement.
  • Vacation and sick leave will accrue at the reduced employment level; any excess vacation pay out processed when the VPR arrangement commences.

Application Process

If there is general agreement about the change in your workload, click the DocuSign link below to begin the approval process. Should you have questions, please contact your business office. Here are some tools to assist you in establishing your own VPR arrangement:

Phased Retirement Program Options - Questions & Answers

VPR stands for Voluntary Partial Retirement Program. It’s a program that provides faculty and administrative/professional staff the opportunity to transition into retirement through a phased reduction in work over time.
If you meet VPR’s requirements and would like to request it, the next step would be to explore a reduction in employment hours (generally between 50% and 80%) with an appropriate reduction in pay. During this period of reduced employment (the “VPR Period”), the University will continue its regular contribution to retirement based upon your 100% annual base pay. Also, during the VPR Period, you will qualify for all staff privileges and benefits with group insurance coverage levels and rates based upon 100% annual base pay and the University will continue its regular contributions to these programs. In addition, you will be permitted to receive cash withdrawals or annuitize up to 100 percent of your retirement accumulations. You will be considered as a regular retiree for the purposes of selecting any retirement payout options. In addition, participating in the VPR program may give you the transition time you’ve desired to pursue interests such as mentorship opportunities or finishing up projects.
If you are faculty or professional/management staff participating in the Purdue Standard Retirement and Savings Plans (PSRS) who is at least 55 years old with at least 10 years of service, you are eligible to request a VPR arrangement. Please note: Not every type of role at the University is suited to a part time arrangement – the VPR program must be mutually agreed upon and is subject to the approval of your Organizational Unit Head. (For approval requirements, see related question below.)
You begin by consulting with your supervisor and department head/dean to work out a reduced schedule that works for all parties involved. If a schedule is agreed upon, you would then work with the business office to structure your arrangement, complete and document required forms, and monitor your arrangement throughout the process.
Yes. If you are interested in VPR, please review the resources found on the Retirement Transition Options webpage which include sample VPR forms and a link to the VPR Docusign Request Form to begin your request. A couple of sample requests are provided with basic information included. Reach out to your business office for assistance with completing this step.
First, you would need to gain support from your supervisor and department head.
Second your business office can assist with preparing a VPR Request Form that will be submitted to your Department Head and Responsible Executive Approver. Finally, Human Resources reviews the terms of the arrangement from the perspective of the VPR guidelines and benefit administration.
The maximum length you can be on the VPR program is five (5) years. Many arrangements are shorter; you will need to discuss an acceptable duration with your supervisor and department head/dean that is takes into account both your retirement objectives and your unit’s operational needs.

Yes. The VPR program provides a 100% benefit coverage for phased retirement arrangements with effort between 50 – 80%.

If you are a member of the professional, management or executive staff, the provisions of the Fair Labor Standards Act (FLSA) are also a factor as you consider reducing your work effort (and pay). Information about overtime exemption status can be found at the HR Compensation website https://www.purdue.edu/hr/paytimepractices/wagehourpro/flsa.php. HR team members in benefits and compensation can help you review your proposed arrangement and guide you in phased retirement options available to you. Most faculty positions are not subject to the minimum salary test. If at any time the position does not meet the minimum salary test during the VPR arrangement, the faculty or staff member will no longer be eligible to continue participation in the VPR program.

Yes. You will be permitted to receive cash withdrawals or annuitize up to 100 percent of your retirement accumulations. You will be considered a regular retiree for the purposes of selecting any retirement payout options.
You would treat the retirement process exactly the same as regular retirees by contacting HR at hr@purdue.edu or by phone at 765-494-2222, or your regional campus HR benefits team a few months ahead of your separation date.

Yes, a request for VPR following a sabbatical leave can only be approved once the sabbatical obligation is met, i.e., the faculty member would need to return to full time status for one year following the sabbatical leave and before beginning the VPR.

The university’s sabbatical policy B-11 states that sabbatical leaves are provided to faculty for the purpose of “updating and strengthening their professional skills and horizons” with the intent that this new knowledge will be shared through teaching and service. B-11 requires a minimal return to the University for One Full Year of service to realize the benefits intended by the policy. The sabbatical obligation cannot be satisfied while on VPR.

If you have vacation accrued that exceeds the amount you can carry forward in your VPR appointment, your department will request a quota payout when your FTE is reduced. Faculty moving from FY to AY will receive all vacation pay due when VPR begins; no additional vacation will be accrued. Fiscal year faculty and staff may have vacation balances that are greater than the maximum available at their reduced FTE so a quota payout is processed at the start of VPR; vacation leave accrual continues at the lower FTE rate and any remaining vacation is paid at retirement.
The Annual Base Pay in effect when you commence VPR will be used; in other words, your new fiscal year salary would be used. Just a reminder: annual base pay does not include summer session, administrative supplements, awards, overloads, or any additional forms of compensation.

Can my VPR be extended?

Once a written agreement has been approved, its duration cannot be lengthened nor the percentage of time employed increased; however, you can opt for an earlier retirement date and/or reduce the percentage of time employed by mutual agreement. Any exceptions require the approval of the Vice President of Human Resources. Note that the VPR program provides a 100% benefit package for phased retirement arrangements with effort between 50 – 80%.

How would I modify my schedule once this arrangement is in place?

If operational needs of your department or your own situation changes, and you agree to shift your schedule or further reduce your workload, visit your business office. Changing the terms of the agreement should begin with the beginning of a pay period. Although changes don’t require approval from your Dean/VP/Chancellor, it is important to process a revised VPR form through your business office routed through to HR so that you get the full benefit of the program and no unexpected premium payment invoices.

Who do I need to contact if I decide to retire earlier than my anticipated VPR agreement?

If you are thinking about retiring earlier than the date agreed upon in your original VPR agreement, you should consult with your supervisor and Department Head. Again to avoid unintended benefit issues, alert HR via the submission of a revised VPR form (no Dean/VP/Chancellor approval needed).

Retirement Plan Contributions

How is the 403b Base (University’s retirement contribution) calculated?

10% will be contributed to your account based on what would have been your full annual salary.

How is my 401a Mandatory (required contribution to the retirement plan) calculated?

4% calculated on your newly reduced salary.

10% will be contributed to your account based on what would have been your full annual salary.
The deferral rate that you’ve established through the Fidelity recordkeeping system will automatically adjust. It will take whatever percentage you elected on your new reduced pay. If you are not paid for a semester, it will simply resume the deferral arrangement when you return to pay status. There will be no retroactive or adjusting amounts withheld on the voluntary savings plans.
One of the most popular work reduction schedules for faculty involves working full-time for one semester and then taking a semester off. Here are some details related to payroll processing that will help you plan for your VPR transition.

How do I pay for my portion of benefit premiums if I am off a semester? (including medical, dental, vision, long term disability, and all voluntary benefits)

During the semester that you are working, the premiums will be added to the regularly scheduled deduction amounts. By “doubling up” the payroll deductions, you are still eligible to receive pre-tax treatment of your health benefits.

How is the employer Health Savings Account contribution applied to my account if I am off a semester?

Only employer contributions will be contributed towards the Health Savings Account during time off. When you return to pay status, your contribution resumes. Employee contributions are not adjusted to provide the full-year’s employee contribution.

Who do I contact if I have questions about my deductions?

Please contact HR Benefits by email at hr@purdue.edu or call 765-494-2222 if you have any questions about your deductions.

The VPR program must be flexible to allow it to serve the diverse and complex Purdue community. These questions reflect the discretion that organizational unit leaders can exercise in crafting arrangements that suit the needs of faculty and staff while serving the mission of the university.

If an individual is eligible for the VPR program but has responsibilities that are not compatible with the work schedule proposed, am I required to approve the VPR arrangement?

No. A VPR arrangement must align with the needs of the organization unit. There is no requirement to approve a request. Discussions about work assignments and availability of other resources to maintain programs and operations are essential before an agreement is endorsed and approved.

If an individual begins a VPR but there are problems, is there any possibility to adjust the arrangement?

The terms of the VPR are subject to an annual review. Issues with funding, completion of assignments and scheduling may require a discussion and revision of terms.

How are the VPR fringe benefits funded?

For retirement, life insurance, and long-term disability, departmental fringe benefit accounts will be charged amounts based on 100% of the VPR participant’s annual base salary.

If we need a faculty member to teach a section after the VPR period ends, can we reemploy him or her?

Returning to a paid Purdue position is possible, however at least a 30-day break in employment is required and arrangements for post-retirement employment cannot be made prior to, or as a part of, a VPR agreement. Continuing in a temporary or non-benefits eligible position does not constitute a break in employment. The IRS can also disallow favorable tax treatment of retirement benefits provided when employment continues or recommences under a pre-arrangement; penalties have been assessed in these situations. Additional guidance on post-retirement employment for faculty can be found here: https://www.purdue.edu/hr/Benefits/retirees/pdf/PostRetirementAppointments.pdf.

How do we manage an exempt arrangement that calls for intermittent periods of work and time away?

As work arrangements are considered, the goal is to agree upon duties and responsibilities equivalent to FTE over a particular semester or work period. A schedule requiring frequent adjustments to payroll that correspond to actual days worked/days off should not be approved for an exempt faculty or staff member.

With a part-time appointment where the schedule is variable, how are holidays managed?

If a holiday falls on a regularly scheduled day off, you would re-designate the holiday to another normally scheduled workday within the same workweek.

For work arrangements that are scheduled year round, but with fewer hours per week, are there guidelines for handling holidays?

Yes, the Compensation website has information about holidays for individuals with reduced work schedules at this site:
https://www.purdue.edu/hr/paytimepractices/wagehourpro/index.php

An Alternative: The Advanced Retirement Declaration

Faculty and staff nearing the end of their careers may need additional resources to prepare financially for their retirement years. Normally faculty and professional/management staff must separate from service before any retirement funds may be distributed.  With the “official retiree” age/years of service criteria met, an individual may receive cash withdrawals or annuity payments from their retirement accumulations while employed full time under the provisions of the Advanced Retirement Declaration. The individual must specify a retirement date within two years of the commencement of withdrawal or payments from retirement accumulations. The payout options from the defined contribution retirement system will be the same as available to regular retirees.

Sample Letter

Please submit a signed copy of the letter to hr@purdue.edu with “ARD Request” in the subject line of the email.

Contact Us

For questions on the following, contact:

Retirement distributions from Fidelity: 800-343-0860
Retirement distributions from TIAA: 800-842-2776
Help with retiree medical coverage: 765 494-1694
General Purdue benefits: 765-494-2222 or hr@purdue.edu