TIAA-CREF, a Fortune 100 financial services organisation that currently employs 12,500 workers in over 100 local offices, announced a “special, one-time Voluntary Retirement Program” in a memo to its employees on Tuesday.
The company is offering this “opportunity” to people age 50 and over with at least 10 years tenure at the company, or age 55 and up with at least five years tenure. Eligible employees who choose to participate will receive unspecified financial incentives.
We received a copy of the memo from an anonymous tip. TIAA-CREF confirmed the existence of the program and declined to comment further, emphasising that it is a voluntary opportunity and that there is no larger plan to reduce staff.
Here is the memo, transcribed in full (bolding theirs):
As we embark on the second half of our Vision 2020 strategy, we have significant opportunities to deliver on our promise to put the customer first in everything we do by becoming more efficient and effective. To drive continuous improvement, each of us needs to look for ways to simplify and improve processes and slow the rate of growth in expenses.
As part of these efforts, we are introducing a special, one-time Voluntary Retirement Program (VRP), which provides an opportunity for eligible employees to receive financial incentives if they participate. In recent years, some employees have expressed interest in such a program.
The VRP is generally available to employees in Tiers 2 — 12 who will be at least age 50 with 10 or more years of continuous service or at least age 55 with 5 or more years of continuous service by the end of 2015. Employees who are eligible will receive a communication later today with more information about the program. Those who want to participate must make their election by August 14, and the last day of work will be October 2.
This opportunity is completely voluntary. We value our employees and recognise the personal nature of the decision to participate in the VRP. We also recognise that some of you may think a program like this signals future layoffs. As always, we will continue to evaluate our business structure and workforce to ensure that we are meeting client needs as effectively as possible in a highly competitive, rapidly changing environment. Please be assured, however, that there is no enterprise-wide plan at this time to reduce staff.
While the company says it is not planning layoffs, this program would result in a reduction of staff.
Other companies have tried to frame staff reductions as exciting news. In 2013, online retailer Fab referred to a round of layoffs as an “opportunity to start your new job search immediately,” and in 2011, pharmaceutical company Merck issued a memo with at least 12 different euphemisms for the company’s planned job cuts.
TIAA-CREF isn’t the first to offer a “voluntary retirement” program. Intel instated a voluntary program in 2014 after announcing it planned to reduce its global workforce by 5%. United Airlines offered a voluntary $US100,000 buyout in 2014 in an effort to reduce flight attendant count by about 2,100 and save $US2 billion in costs, Bloomberg reported. Dell also used a similar tactic in 2013 when trying to trim expenses with a “voluntary separation program,” which offered financial incentives and other services to employees who agreed to quit.
TIAA-CREF’s program, which people as young as 50 may qualify for, incentivizes an earlier retirement than is typical. The average age for retirement is 62, according to Gallup, largely because the earliest you can start withdrawing money from retirement plans, such as your 401(k) or IRA, is age 59 1/2, and the earliest you can start collecting your Social Security is age 62.
However, Americans are increasingly concerned about their ability to afford retirement, and in many cases are working past traditional retirement age.