Winona State encourages early retirement to combat $1.6 million deficit

Winona State encourages early retirement to combat $1.6 million deficit

McKenna Scherer, Editor-in-Chief

Winona State University began further strategies to combat its growing $1.6 million budget deficit on Monday, Feb. 3.

The university’s human resources department sent out an email to faculty members signed by President Scott Olson announcing the school will “encourage early separation of faculty and staff.”

The incentive, available to the president under board policy, is known as the Board Early Separation Incentive Program (BESI).

BESI offers eligible employees a monetary incentive for their acceptance of early retirement or “separation.”

The email stated that this will be the only BESI offer for three years.

The offer came after further budget developments.

Back in October, when the university held its first budget forum of the school year, there were three budget scenarios projected.

The current $1.6 million deficit was projected to increase to either $3, $4 or $5 million in the 2021 school year.

Chief Financial Officer Scott Ellinghuysen said that it now seems to be leaning towards $5 million.   

Ellinghuysen said there were lower enrollment numbers for next school year’s freshmen class than anticipated, therefore the budget has been adjusted.

He said the president’s cabinet approved usage of BESI following these developments.

“We had a budget meeting about a week before Christmas and it primarily started out of Academic Affairs,” Ellinghuysen said. “But then others asked for the same thing.”

Ellinghuysen explained that the early retirement incentive was deemed better than other budgetary actions that could be used.

“We identify those departments that the president has said is where positions would not be replaced,” Ellinghuysen said. “Or where there would be replacement at significant savings.”

Eligibility for BESI includes having at least 10 consecutive semesters or 5 continuous years of employment with Minnesota State Universities and being a minimum of 55 years old.

Those eligible in the colleges of Business, Education, Liberal Arts, Nursing and Health Sciences and of Science and Engineering were sent the offer.

The College of Liberal Arts and Education had the most departments targeted for BESI.

Liberal arts departments targeted included art and design, English, mass communication and more.

Education departments targeted included early childhood and elementary education, special education, and physical education and sports studies, among others.

Those eligible from the library, business office and campus card/purple pass area and Information Technology were also sent the offer.

Chief human resources officer Lori Reed said there were 108 offers sent to faculty and staff.

The majority went to faculty members.

Reed also said that the average monetary incentive to accept the BESI offer was between $40,000 and $42,000, although there is a large variance across the board.

Lower or higher offers were given based on many variables, including years of service.

Reed explained that someone with 30+ years of service would receive a higher offer than someone with six or seven years.

There were two monetary incentives listed, one potentially higher than the other if an individual began their retirement earlier.

If an individual began their retirement between May 13, 2020 and June 30, 2020, an incentive of 2.5% of their base salary per year of service or 50% of their base salary, whichever is greater, would be given.

The second incentive of 2% of an individual’s base salary per year or 50% of their base salary was offered to those who retired between May 12, 2021 and June 30, 2021.

The acceptance deadline is March 16, 2020.

That timeline allows for a six-week turnaround to decide.

Ellinghuysen said that the university would ideally send out the BESI offer in the fall to allow more time, but there was not enough information then to do so.

Ellinghuysen also said that he has received comments saying that the six-week turnaround is actually “too long of a time.”

He said some departments were unhappy they had been targeted for the offer and others were unhappy that they had not received it.

Given the targeted age range and amount of service required to be offered the BESI, Ellinghuysen said most have already thought about retiring.

“It’s not necessarily a bolt-out-the-blue kind of thing,” Ellinghuysen said. “Maybe it speeds up their timetable [for retirement] by a year or two or three, [but] they’ve had a general idea.”

Reed said human resources offers individual meetings with faculty and staff members preparing for retirement and talk about insurance, financial planning and the retiree center among other things.

“I would say everyone is interested to talk individually [about their BESI offer],” said Reed. “They’re really looking for answers and information.”

After the March 16 deadline, administrators, deans and vice presidents will determine who could be replaced and what savings were made.

If not enough BESI offers are accepted, further strategies and actions will take place.

Ellinghuysen said “it’s really hard to say” whether layoffs will be on the table until after the BESI results are examined.

The school may not hire replacements for certain positions among the faculty and staff members who accept the BESI offer.

“It’s sort of like fishing,” Ellinghuysen said. “You throw your line in the water and you’re not really sure what you’ll catch.”

Ellinghuysen said, for example, that if a department with four eligible people all accept the offer, then they would replace some of them.

If a department with only one eligible person accepts the offer, then they may not be replaced, he said.

State legislature went into session last Tuesday, Feb. 11 where Winona State asked for further funding assistance.

Results from the session will also determine future budget actions.

Winona State is recommending a tuition increase of 3% to help the budget as well.

Ellinghuysen said that the board or legislation may not allow the 3% increase, but it would then “make our budget situation worse.”

There will be another public budget forum in April, he said.


The opinions expressed in this paper are not necessarily those of Winona State University, the Minnesota State Colleges and University system, or the Winona State University student body.