Creating a sabbatical/severance pay fund?

One of the institutions I talked to at the CIC (much bigger and with more resources) does something like the following, translated into our JBU context.

1) A portion (1/6th?) of each faculty member’s salary is withheld each year into a separate pot.

2) If the faculty member passes both three-year formal evaluations and/or the next promotion review, then that professor can do one of two things with that full-year’s salary that has accumulated.

- Take a one-year sabbatical at full pay with the saved money being used to hire a full-time replacement.
- Keep working but get a one-time bonus of the equivalent of a full-year of pay.

3) If the faculty member does not pass the formal evaluation at the three year mark, they would be let go with the equivalent of a half-year’s salary as severance pay. If that person fails the 6-year evaluation or the promotion review, that person is let go with the equivalent of a full-year’s salary as severance pay.

4) I didn’t follow up on the details to determine what would happen if someone left of their own volition at any point in this process.
My sense is that this institution didn’t implement this policy by holding back more and more money over time but by diverting salary increases over time into this sabbatical/severance pay fund. Not sure if this is a feasible and even intriguing option for JBU, but it’s a direction I’ve never heard of before, hence my noting it here.