Voluntary Separation Option (VSO)
Frequently Asked Questions
General Information- What is the "Voluntary Separation Option" (VSO)? The Voluntary Separation Option (VSO) provides staff employees with severance pay based on length of UC service if they choose to separate from employment and agree to the rules of the program.
- Why is this program being offered?
The University of California is experiencing significant budget reductions and the VSO gives the campus an opportunity to reduce salary expenses and minimize layoffs. - Who will pay the severance costs?
Departments are responsible for paying the severance costs from salary savings. - Why should I participate?
There may be a variety of reasons to consider participating in the VSO. For example, if you are considering retirement or leaving UC Santa Barbara for other reasons, the VSO will give you additional financial resources that you otherwise would not receive. - If someone in my department is being laid off, will my VSO participation save that person's job?
Volunteering for separation does not necessarily save a specific job. Managers are making decisions based on the operational needs of the unit which vary across positions. The cost savings generated by this program will collectively help us meet our budget reduction requirements. - If I don't take the VSO and later get laid off, will I get severance?
If you are involuntarily laid off, you may be eligible to elect severance pay in accordance with personnel policy.For information regarding severance in a layoff situation, please refer to Policy 60 of Personnel Policies for Staff Members for non-represented employees. - Can I take a job at another UC location?
If you accept UC employment prior to the VSO separation date, you will not be eligible for the severance payout. After the VSO separation date you may not return to employment at any UC location, in any appointment type, for a minimum of 36 months after separation. If you do accept employment within 36 months of separation and you had received the severance payout, you will be required to return a percentage of the severance pay. Repayment would be subject to existing payroll policies and procedures. - Why can't VSO participants come back to work for the UC for 3 years?
The campus needs to reduce the costs associated with the workforce. The budget is not expected to recover soon. Funds saved from this program will be used to cover those reductions. In addition, UCOP has required that any voluntary separation option offered to employees restrict return to employment for a period of 3 years. - Does the 3 year restriction on reemployment include independent consultant agreements with the University?
Yes. - How should I explain my VSO termination of employment to prospective employers?
Inform them that UC Santa Barbara offered an incentive program to eligible employees in order to minimize the need for layoffs. - Why can't the department fill a position vacated through VSO for 18 months?
The purpose of the program is to create salary savings used toward budget cuts in addition to covering the costs associated with the severance payment. Therefore, positions cannot be filled for a period of 18 months following a separation under this program. - What if the manager needs this position refilled?
The manager may request an exception to fill the vacancy if it is part of a restructuring plan that achieves a net reduction in positions. The vacancy may also be filled by requesting an exception from the division control point.
- Who is eligible to participate?
Non-represented, non-probationary staff career employees (including PSS and MSP) including employees on approved leaves are eligible, except as follows:- An employee in the Senior Management Group (SMG),
- An employee with an appointment of less than 50% time,
- An employee currently receiving or has received retirement benefits from the University of California Retirement Plan (rehired retirees),
- An employee who, prior to October 30, 2009, is entitled to separation or severance pay under another arrangement, agreement or settlement with the University that is not part of the VSO program.
UC Santa Barbara has the sole discretion to determine eligibility criteria and selection for participation that includes consideration of business and operational needs. Eligibility for represented employees will be determined by collective bargaining as appropriate.
-
What are the circumstances for turning down an application?
Department managers will need to consider the business skills needed for critical operations and to meet future needs. If your skill set is in an area of high need and there are no alternatives for getting the work accomplished, then the department will not be able to justify accepting your application. Departments should make decisions based upon bona fide business reasons. - Why are SMG employees ineligible for this program?
SMG employees are at-will employees and therefore ineligible for this program. - Are exclusively represented employees eligible to participate?
Eligibility of represented employees is subject to collective bargaining.
- What if my union does not agree to participate?
Represented employees are not eligible to participate unless the appropriate union has agreed to participate in the program.
- May I participate if I am on a leave of absence?
Yes. If you are on an approved leave of absence and are otherwise eligible, you may participate.
- What if I have already started the retirement election process to retire on October 30, can I still participate?
Yes.
- I'm a rehired retiree. Can I take advantage of this program?
No, employees who have received retirement income from UCRP are not eligible.
- I am a rehired retiree who suspended my pension. Am I eligible?
No.
- Are employees hired by an employment agreement eligible to participate in the VSO?
No. Employees under employment agreement (contract positions) are not eligible for this program.
- I have a split funded appointment. One of my appointments is eligible the other is not. Am I eligible to participate?
Only staff career appointments above 50% are eligible to participate.Any appointments below the 50% level are exempt.Only the portion of the appointment that is 50% or above is eligible and severance pay is prorated based on this appointment. For example, if you hold a split appointment of 60%/40%, the portion of the position that is funded at 40% is not eligible.If not exempt by other factors (see above), then the 60% position is eligible.You would be required to separate from employment and your severance pay would be prorated based on the 60% appointment.
- Why aren't academic titles eligible to participate in the VSO?
This program was designed specifically for staff employees. Campus programs for academic titles are subject to the approval of the Office of the President.No programs have been approved for academic titles at this time.
- Am I eligible to apply for the program if I was full-time but I am now on START? How will my severance be calculated?
Yes, you are eligible and your severance would be calculated on your pre-START salary.
- 1. What is the date of separation?
October 30, 2009. - Why does the University require that I separate on this specific date?
The date designated for separation is based on a required timeline that includes, but is not limited to, the signing of the release forms, the campus budget process and the administration of the program.
- What is the deadline for participating in this program?
You have until 5:00 p.m. on September 14, 2009 to apply.
- Why is September 14 the final date for electing the VSO?
This date was selected to ensure that there is sufficient time to administer the program, which includes signing of releases, processing severance pay, and separating employees from their respective departments.
- How do I sign up for the VSO?
Read all of the information in the Election Form packet. Discuss your plans with your supervisor and department head. Fill out the election form and ask your department head to review and sign it.Send the completed form with signatures to Human Resources no later than 5 p.m. on Monday, September 14. You may also want to discuss this opportunity with your own financial advisor.
- What if I change my mind after submitting the form?
You may withdraw your election form by delivering a signed and dated letter stating your intention to withdraw to Human Resources. The final deadline for withdrawal is 5:00 p.m. on Monday, September 28.
- What else do I need to do after I sign up for the VSO?
You will need to sign a release of claims in order to receive the severance payout. This form will be sent to you shortly after the September 14 application closing date. - If you are age 40 or over, you will have at least 45 days to consider and seek advice about the release. If you decide to participate, you may sign the release anytime within the 45 days after you receive it. You will have seven (7) days from the signature date to revoke your release of claims if you choose not to participate in the program.
- If you are under age 40, you will have at least 14 days to consider and seek advice about the release.If you decide to participate, you may sign and return the release at any time during the 14 days after you receive it.
- If I elect to participate in the VSO and then obtain another job outside the UC, can I leave earlier than October 30?
No, in order to receive the severance payout, you must separate on the date approved for the program, which is October 30, 2009. - If I sign the election form but later decide not to sign the release or decide to revoke my decision, does it also rescind my separation request? In other words, can I keep my job if I change my mind?
Yes.If you do not sign the release or if you revoke your decision within accepted timeframes, you may remain in your position. However, once you have submitted your signed release, your decision to participate in the program cannot be rescinded.
- How much severance pay will I receive and how is it calculated?
The severance amount is based on your classification, service credit from your most recent date of hire (without a break) and your current salary rate.
- Managers & Sr Professionals (MSP) receive 1 month's pay for each full year of service, up to a maximum of 6 months' pay.
- Professional & Support Staff (PSS) receive 1 weeks' pay for each full year of service, up to a maximum of 16 weeks' pay.
- If my appointment has varied in percentage of time over the years, is my payout calculation based on the changes in my appointment pay?
The various periods of time and percentage of appointments will be added together to determine full years of service.
- Do years of service for calculating severance include only years at UCSB or any UC years of service?
All full years of your UC service are included in the calculation, provided you have not had a break in service. UC service prior to a break in service is not included when calculating severance. - What is considered a break in service for employment purposes?
Any one day off employment status is considered a break in service. - Do furloughs count as a break in service?
No. - Does disability leave count as a break in service?
No. - Is sick leave added to my years of service for the purpose of the VSO payout?
No, sick leave is not included in the calculation towards years of employment service. If you retire within 120 days of separation, your sick leave will be converted to retirement service credit. - Why is the severance amount for the PSS group less than that for the MSP group?
The severance amount in this voluntary program is modeled after Policy 60 of the Personnel Policies for Staff Members.That policy grants PSS employees additional rights not afforded to MSP employees.See the policy for more information. - Is there a limit to how much severance I can receive?
Yes. Severance payment granted under the program cannot exceed $75,000. Any severance payment of $50,000 to $75,000 must be approved by President Yudof and will not be paid until after the appropriate approval has been obtained. - If my severance is subject to President Yudof's approval, is it possible it will not be included in my final check? If so, will that jeopardize my ability to contribute that money into my 403(b) or 457(b)?
You must receive your severance payout with your final check in order to include it in your 403(b) and/or 457(b) plans. HR cannot guarantee when the President's approval will be received.However, we will forward the required documentation to his office as soon as the severance amount has been verified in our office. - When will I receive the severance payment?
If you are age 40 or older, you will receive your severance pay either the end of your seven (7) day revocation of release period or your separation date, whichever is later.
If you are under age 40, you will receive your severance pay either the date you sign the release or your separation date, whichever is later. - Can I sign the release form sooner than the “consideration” period and get my severance check with my last paycheck?
Yes, you can sign the release form sooner than 45 days, but employees age 40 and over are encouraged to take the full 45 days to consider the release before signing it. - Will taxes be withheld from the severance payment?
Yes, severance payments are considered taxable income.Usually, Federal, State and FICA taxes (if applicable) are withheld from severance pay at a combined rate of 37% to 40%. - Is it possible to postpone receipt of my severance pay until January 2010 for tax purposes?
No.
- What happens to my health and welfare benefits?
In general, coverage will continue through the end of the month following the date of separation. If you choose to retire and are eligible for retiree insurance, you will participate under the terms of those programs. You may be eligible to continue UC-sponsored coverage under COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985). For some plans, such as Short-Term and Supplemental Disability, coverage ends on your last day of active work. See the Termination of Employment Benefits Checklist available on the At Your Service website, for more information. - Will I be able to get unemployment insurance?
The State of California determines whether you will receive Unemployment Insurance. Typically, anyone voluntarily separating does not qualify for Unemployment Insurance, but you would be free to apply for it. See the State Employment Development Department website for more information. - If I participate in the VSO and choose to retire, will my retirement income change in any way?
No. Your retirement income would be the same as if you were not participating in the program. - Will I get UCRP service credit for the severance?
No. In addition, your severance pay does not affect your Highest Average Plan Compensation (HAPC) calculation. - May I participate in the VSO if I have a pending disability retirement claim?
The pending claim may impact your eligibility to participate in the program. Please contact your HR Benefits representative for information. - Before considering the VSO, I'd like to know what my retirement income would be. How can I get that information?
There are three ways to get an estimate of your retirement benefit:- Log on to At Your Service Online to see a personalized estimate of basic retirement income and lump sum cashout based on your current payroll data.
- Use the Retirement Plan Benefit Estimator to estimate your retirement benefit based on data you collected from At Your Service Online.
- You can read the Retirement Handbook for additional information.
- What happens to my University of California Retirement Plan (UCRP) if I separate but don't retire?
If you are vested (have five or more years of UCRP service credit), your retirement account remains with UC until you choose to retire at some date in the future. - What happens to my Capital Accumulation Provision (CAP) benefit?
If you retire, you must take a distribution or rollover of your CAP benefit. If you leave UC employment but remain an inactive member of the UC Retirement Plan (UCRP), you may take a portion or all of your CAP funds or leave it with UC. Any funds that remain in the CAP account after your separation continue to earn interest. It is recommended that you read the Special Tax Notice for Plan Distributions on At Your Service - What is the effect on my DC Plan, 403(b) Plan or 457(b) Plan?
Contributions stop with your last paycheck. You will be eligible for distributions from the DC Plan, the 403(b) Plan and the 457(b) Plan according to the Plan rules regarding separation from service. If you have a balance of $2,000 or more in a single plan (for example, the 403(b) Plan) after separation from UC service, you may keep your account with Fidelity.See the At Your Service website or the Fidelity website for complete details. Again, review the Special Tax Notice for Plan Distributions on At Your Service.
- Can I contribute my severance pay to my 403(b) or 457(b) Plan account?
Yes, if you receive your severance pay with your final paycheck and it is your last day of employment. Contact Fidelity Retirement Services (1-866-682-7787) for tax-deferring your severance pay during the periods below: - 457(b) 9/1/09 - 9/25/09
- 403(b) 10/1/09 - 10/18/09
- 11. I deferred a portion of my severance payout to my 403(b) and 457(b) plans. If I am rehired within the 3 year period following my separation, how do I pay back the amount of my plan contributions? Can it be withdrawn from my 403(b) or 457(b)?
You should contact the Payroll Office to learn about the current procedure for repaying money to the UC.You can withdraw money from your 403(b) or 457(b) plans, however, the funds you withdraw will be taxed and, depending on the plan and your age, you may also be penalized for early withdrawal. - What will happen to my accrued sick leave and vacation accruals?
How sick leave is treated depends on your plans after separation from UC:- If you retire, your sick leave will be converted to service credit and used in determining your retirement income, unless you elect a lump sum cashout.
- Sick leave is not paid out upon separation from employment.
- You will be paid for any unused vacation hours upon separation from employment.
- 13. Can I use vacation leave time to carry me to my separation date?
Not unless you are retiring. If you are retiring, you may use your vacation from your last day at work until the effective date of your separation, with departmental consent and consistent with UC policy. If you are not retiring, you may not use vacation prior to your separation. You will be paid for any unused vacation hours when your UCSB employment ends. - If I return to UC employment 3 years after the VSO; does my employment and retirement service credit pick up from where I left it?
Yes, both employment and retirement service credit are cumulative.
If you receive your severance payment after your last day of employment, 403(b) or 457(b) contributions cannot be deducted from that check. Talk to your financial or tax advisor about alternate ways to deal with or defer your severance payment.