Cuesta College employees may soon be offered a financial incentive to retire early as the college looks for ways to balance its budget.
The plan will be introduced to trustees tonight, with final approval expected in May.
The college faces a $3.7 million deficit in the 2011-12 school year — which is projected to grow to $5.3 million the following year.
Administrators say the plan will save the college about $1.2 million a year in the long term.
All employee groups, including teaching, classified and management, would be eligible. Under the current proposal, an employee would collect 80 percent of this year’s salary over a five-year period. This would be in addition to the employee’s regular retirement pay, if an employee chose to retire. Employees would also have the option of “separating” from the college and not retiring — allowing them to return as part-time faculty or teach at another college.
“It is a very generous offer, but we recognize that the current economy makes it pretty scary out there,” said Toni Sommer, vice president of administrative services. “Hopefully, it will give people who have been thinking about retirement a little encouragement and a buffer until the economy starts to bounce back.”
The last time Cuesta College offered an early retirement incentive was in 2003.
“This is one way to drive down a major part of the college’s costs,” Interim President Gil Stork said. “It spurs people to re-evaluate what they might want to do with their lives.”
Stork said a consulting firm was used to analyze the college’s work force and determined that a retirement incentive fits well with the college’s aging faculty.
There are 159 employees of retirement age who have worked for Cuesta for at least five years who would be eligible for the offer, Sommer said. Twenty-seven of those employees would have to take the incentive for it to be a financial gain for the college, she said.
The biggest savings would be realized by faculty members because they are the highest paid. There are 55 faculty who qualify; the college is looking for 10 of those to take the offer.
Other targets include one dean, 14 classified staff and two classified managers.
The college would likely hire back at least half of the positions at a lower salary — saving about $600,000 the first year and up to $1.2 million a year as the incentive is paid off.
It remains to be determined whether certain positions would have to be refilled out of necessity — such as hiring a teacher for a popular course.
“This is a way to avoid layoffs for one more year,” said Sommer, adding that community colleges across the state are already reducing staff because of the state budget. “Unfortunately, after that, I don’t see any other option.”
Reach AnnMarie Cornejo at 781-7939.