UT System is clarifying benefits for workers weighing retirement

By Sharon Jayson
Thursday, July 24, 2003

The University of Texas is notifying more than 10,000 UT System employees that they don't need to retire after all.

Some 10,400 workers might have opted for retirement thanks to an group insurance eligibility change approved by the Legislature. The change -- the result of two Senate bills -- requires employees to be 65 and have at least 10 years of service to receive retiree health benefits. It goes into effect on Sept. 1. Currently, employees who are 55 and have five years of service could retire with those same benefits.

UT officials notified employees at or near age 55 who had at least five years of service that they could consider retiring by Aug. 31 or risk having to work another 10 years to receive health benefits.

Officials at Texas A&M University sought clarification from state Attorney General Greg Abbott. That clarification came earlier this week in a letter from the office stating that current employees are "grandfathered." The old rules will apply whenever they choose to retire.

"It was prematurely forcing people to make some significant life decisions that a lot of people weren't ready to make," said Kyle Cavanaugh, UT-Austin's associate vice president for human resources. "We were having very difficult conversations with people over the last couple of months about this forced decision."

As it turns out, both Senate bills redefined eligibility, but only one included the grandfathering provision.

"Both passed and that became the dilemma, " said Steve Hassel, the A&M System's associate vice chancellor for human resources. "Does one overrule the other one, or does one read them in harmony?"

Hassel said about 2,100 of the A&M System employees were identified as age 55 with between 5 and 24 years of experience, with about 550 at College Station. At UT-Austin, about 900 employees might have been affected, but officials on Wednesday sent e-mails to all 17,000 employees currently eligible for benefits. Both the campus and system will provide updated Web site information, and the system plans to send letters as well.

The legislation that changed the health insurance rules is not related to another new law that has spawned a recent rush of retirements among state employees. Nor does it affect UT-Austin's buyout offer for its classified employees.