Colleges are increasingly offering tenured faculty members financial incentives to retire and creating programs in which professors can gradually shift from full-time to part-time to retirement, according to a report being released today by the American Association of University Professors.
More than 38 percent of colleges responding to a survey reported that they had offered at least one institution-wide incentive program to encourage retirements -- and more than half of them indicated that their plans had started since 2000, the report said. The most common age minimums were 55 (34 percent of plans), 50 (25 percent) and 60 (25 percent). At most institutions, all faculty members who met the age requirements could participate, but at some institutions, there were also minimum years of service (10 or 15 years being most common) to participate.
The AAUP's study updates a similar report conducted in 2000 and aims to provide a more current set of data on how colleges are dealing with retirement issues. Until 1994, colleges had an exemption from age discrimination laws that bar mandatory retirement ages in most professions. As a result, colleges are still relatively new to the business of managing the process by which professors decide whether and when to retire. And the years in which colleges have been unable to rely on mandatory retirement have coincided with a period of time in which health care costs and life expectancy rates have gone up.
Valerie Martin Conley, director of the Center for Higher Education at Ohio University and author of the report, said that there is "somewhat of a disconnect" between colleges' constant focus on recruiting faculty talent and relatively less focus on the retirement process. "We systematically collect data on our faculty in higher education," she said, but not on the years in which they prepare to leave regular work on campus. Given the "increasing complexity" of retirement decisions, Conley said she hoped the data would spark discussions among campus administrators and among individual faculty members.
Even where colleges adopt incentives for early retirement, she noted, it is not necessarily as part of a broad personnel strategy, but is sometimes part of dealing with a budget shortfall.
Incentives for early retirement are typically one-time (or repeat) programs, with a set time frame. At the same time, the survey found, more colleges are creating "phased" retirement programs, in which tenured faculty members and the institutions devise a plan for a period of part-time work (at pro-rated pay) followed by a pledge to waive tenure rights at a specified time. Of the 567 colleges that responded to the survey, 37 had such programs prior to 1994, 51 had adopted them in the period 1994-9, and 58 adopted them after 1999.
Colleges offer a variety of incentives for participation in phased retirement, the report found. Of those with plans, top incentives included additional contributions to health insurance (78 percent), periods in which participants would receive partial retirement benefits plus salary (50 percent), extra retirement payments or credits (34 percent), and extra salary (34 percent).
Conley noted that there is a large body of work endorsing phased retirement as good for both employers and employees. The former don't have "all that knowledge just walk out the door one day." For the latter, she said, they gain because "it's not healthy to be completely unretired one day and then retired the next."
Institutions wanting to encourage retirement through any method are also starting to look at the benefits offered to all retired faculty members. Policies vary widely. Among the more common benefits for all are library privileges (78 percent), access to campus fitness facilities (72 percent), extending faculty pricing for any events to retired faculty members (64 percent), institutional e-mail addresses (56 percent), parking (54 percent), and access to computer networks (48 percent). Only distinct minorities of colleges offer all retired faculty members telephone numbers, access to secretarial services, office space or travel funds.
The report noted that a shift continues on campuses from defined-benefit retirement programs (in which an employer provides an employee a guaranteed annual pension) toward defined-contribution programs (in which an employer deposits a percentage of an employee’s annual salary into a tax-deferred account for the employee). The default plan, if there is one, is defined benefit. Fifty-seven percent of responding institutions indicated that part-time faculty members are permitted to participate in plans, but their participation rates lag those for full-time faculty members.
Participation in Plans by Full-Time and Part-Time Faculty Members
|# of Full-Timers Eligible||% of Full Timers Participating||# of Part-Timers Eligible||% of Part-Timers Participating|
Conley said that the participation rates of part timers could be a matter of concern, but there might also be explanations for the relatively low rates of participation. For example, she said that many part timers teach at multiple institutions and may participate in a retirement plan at only one of their employers. She said that this was an area that needs more research.
The survey was co-sponsored by the American Council on Education, the American Association of Community Colleges, the American Association of State Colleges and Universities, the College and University Professional Association for Human Resources, and the National Association of College and University Business Officers. The TIAA-CREF Institute and the Cornell Higher Education Research Institute financed the survey. The sample included 1,361 public and private doctoral, master’s-granting, bachelor’s-granting, and two-year institutions, of which 567 completed the instrument, reflecting a response rate of 42 percent.