May 29-30, 2003

ITEM 119-2401-R0503  Increase Authority Level for Voluntary Early Retirement Incentive Program; Montana State University Extension Service

THAT: The Board of Regents of Higher Education authorized the MSU Extension Service to offer a Voluntary Retirement Incentive Plan to select employees at the January 2003 meeting. The Board of Regents also increased the MSU Extension Service FY 03 HB2 Smith-Lever authority by up to $280,000, from $2,278,065 to $2,558,065 to accommodate the cost of the retirement incentive. As the federal government prohibits using federal dollars to pay retirement incentives, we will be substituting payroll expenses of some employees paid on state general fund to federal Smith-Lever funds in order to use state general funds to pay the retirement incentive costs.

The Extension Service requests that our FY 03 HB2 Smith-Lever authority be further increased by $79,000, from $2,558,065 to $2,637,065 to accommodate higher then anticipated costs of the retirement incentive and associated termination leave payouts.

EXPLANATION: The Extension Service estimates that it will have more participants in the retirement incentive plan than originally estimated. The $79,000 increase to our FY 03 HB2 Smith-Lever authority will allow us to help manage the higher incentive and termination leave payout costs.