OVERVIEW

 29.10.02 Such developments include reductions in funding for the University, reduction and changes in student numbers, increased salaries and on-costs, the abolition of the compulsory retiring age, the requirement for new career paths and promotional opportunities, technological and organisational change, requirements to provide for work redesign and multi-skilling, and the provision of tenure for Level A academics.

 29.10.03 One method of increasing flexibility and reducing costs is for staff on continuing appointments to participate in the Voluntary Early Retirement Scheme. The Scheme set out in this Section operates from 1 February 1998 to 31 January 1999.

REFERENCES

Universities and Post Compulsory Academic Conditions Award 1995

 Income Tax Assessment Act 1936 (Section 27E)

Taxation Ruling TR 94/12

 POLICY

29.10.04 The Scheme is designed to assist the University:
 

to reduce its total level of expenditure on salaries and wages; and at the same time to implement workplace reform and technological change and meet the agreed requirements for providing opportunities for career advancement, work design and multi-skilling of employees;

 

to rationalise and reorganise its operations requiring the alteration of the make up of the work force.

 Eligibility

 29.10.06 It is not intended that the Scheme be available to staff who are leaving to take up a substantive position at another Australian university.

 29.10.07 The Australian Taxation Office (ATO) has approved of the operation of this fourth Scheme from 1 February 1998 to 31 January 1999 (Reference BAN/SPR/AF2433/Part 33). It is unlikely that the University will seek approval for a further Scheme.

29.10.08 The positions occupied by the retiring staff will be disestablished. The University, in considering applications for early retirement under this Scheme, retains the right to refuse those applications which would be of detriment to the operations of the University, School or Office or which would result in the retirement of all or too large a number of the key members of staff in particular areas.

 29.10.09 It must be noted that under the Taxation Ruling TR 94/12 with which schemes must comply:
 

an eligible termination payment must be made in relation to the taxpayer in consequence of the taxpayer's employment being terminated under an approved early retirement scheme;

 

the time of termination must be before the date on which the taxpayer attained the age of 65;

 

there must not be, at the 'termination time', any agreement between the taxpayer and the University, or between the University and another person to employ the taxpayer after that date. 'Agreement' is defined as an agreement which is formal or informal, express or implied, and may be legally enforceable or not.

 
 
Benefits and Taxation under the Scheme

29.10.10 The following benefits will apply:
 

a sum equal to two weeks salary (excluding loadings) for each completed year of continuous service at Macquarie University plus a pro rata payment for completed months of continuous service since the last completed year of continuous service. Continuity of service will not be affected by breaks in employment during non teaching periods. Years of qualifying part-time service will be calculated on a pro rata basis. Prior casual employment will not be counted;

 

the total sum payable in respect of such service shall not exceed the equivalent of 52 weeks at the salary (excluding loadings) applicable to the time of retirement. This benefit will be additional to the staff member's ordinary entitlements on retirement.

 29.10.12 Any payment in excess of this limit will be an eligible termination payment, broken up into the pre 1 July 1983 and post 30 June 1983 components, and can be rolled over. If the amount is not rolled over:
 
                for any pre 1 July 1983 component, 5% is taxed at the marginal rate; and

 

the post 30 June 1983 component is taxed up to a maximum of 16.5% if the employee is 55 years or over (up to the 'Low Rate Threshold', which is $86495 from 1 July 1996) or 31.4% if under 55 years.

 PROCEDURES

29.10.13 Applications from eligible staff members may be forwarded to the Personnel Office at any time within the period up until 31 January (early submission will ensure that cases are processed to allow retirement before the cut-off date).

 29.10.14 The Personnel Office will seek advice from the Head of School, Centre or Office concerned as to the impact of the proposed early retirement before submitting the case for consideration.

29.10.15 Applications may be treated individually or collectively.

29.10.16 The Personnel Office shall refer applications from Academic members of staff to the Deputy Vice-Chancellor (Academic) and those from General members of staff to the Deputy Vice-Chancellor (Administration) or Pro-Vice-Chancellor for decision. In each case the advice of the Head of School, Centre or Office shall be taken into account.

 29.10.17 A later or earlier date of effect than requested may be negotiated with the staff member where staffing or funding restraints require that action (but not later than 31 January).

 29.10.18 It must be stressed that:
 

the Scheme is a voluntary one and no member of staff will be compelled to retire early;

 

the conditions of the Scheme have been agreed to by on-campus Unions;

 

the University will not further employ, in any substantial capacity, members of staff who retire under the provisions of this Scheme. Opportunities may be afforded for staff to continue their research interests through the use of University facilities, and/or by appointment to honorary (unpaid) visiting positions. Where appropriate, such retired staff who are appointed as visiting Academics may be employed to conduct occasional lectures but, as set out in 29.10.09, there must be no arrangement for this at the time of retirement.

 Financial Implications

29.10.19 When a staff member retires under the Scheme, the following costs will be incurred:

 lump sum payment of salary (excluding loadings) on agreed basis;
 

payment of accrued long service leave (For a staff member with more than 5 years service but less that 10 years, the retirement will be a 'termination', with a proportionate entitlement.);

 

commencement of superannuation payments;

Lump Sum Payment

 29.10.20 The position will remain in the unit's budget as funded and filled until the payment (effectively a salary advance from the central budget) has been recovered. From that point, the specific position will be disestablished but any funding which remains after the re-organisation, etc., will be available for use by the budget unit.

Accrued Long Service Leave

 29.10.21 These payments will be met from the central Long Service Leave Provision.

 Superannuation Payments

 29.10.22 Payments will flow through the central budget just as they would upon a normal retirement.

 Replacement of Staff Positions

29.10.23 One of the bases for approval of the Scheme is that it will permit the rationalisation or reorganisation of the University's operations. The expectation is that retiring staff members will not be replaced. Only in exceptional circumstances may new positions be funded from the savings generated by retirements.

 
29.10.24 The position will be disestablished. Where, in exceptional circumstances, a budget unit desires to create a new position to be funded by the savings generated by the retirement, the following conditions must be satisfied:
 

the budget unit must be able to demonstrate that it has the ability to meet its future financial commitments including projected salaries and on-costs, taking into account the outcomes of Enterprise Bargaining and movements in Awards, and other operating costs;

 

the position is to be created following a genuine restructuring within the School or discipline or the Office or a major unit.

 29.10.25 Any new position will be at Level A unless very strong academic reasons exist for approval at Level B or C.

General Staff Positions

29.10.26 The level of any new position will be determined by work design and job evaluation in the normal way. Given the objectives of the Scheme, it is essential that the work design principles be observed to ensure that any new position provides for the new needs of the budget unit and that the new skill requirements are clear.

 Supply of Australian Taxation Office letter

 29.10.27 A copy of the ATO's letters dated 25 June 1997 and 26 November 1998 must be given to all staff whose employment is terminated under the Macquarie University Approved Early Retirement Scheme. Where a Statement of Termination Payment form is required to be issued, the ATO reference number (BAN/SPR/AF2433/Part 33) must be quoted on that form.

SOURCES OF INFORMATION

Phil Hagan, Personnel Office (9749)

Bev Miller, Personnel Office (9743)