Recent news has highlighted how the economy is making aging faculty more reluctant to retire and slowing colleges' ability to hire new faculty. And this week saw a New York Times feature interviewing diverse faculty about the issue.
Mary Coussons-Read, a professor of psychology at the University of Colorado Denver, summarizes some forward-thinking approaches institutions have tried to offering faculty retirement incentives.
When Buyouts Cost Too Much
There are institutions that have tried faculty buyouts -- for instance, offering a financial lump sum for faculty who retire at the end of the year -- but this can prove quite expensive. Offering an array of options for phased retirement allows you to both manage the expense and negotiate a plan that better fits the needs of your individual faculty. "You want to offer an arrangement that allows your faculty to plan for retirement," Coussons-Read notes, "and that helps your institution plan ahead for reallocating anticipated salary savings toward new hiring or other investment." If your faculty are signing three- or five-year retirement agreements, then retirement becomes predictable.
"Many faculty face both financial and psychological barriers to retirement, and you need to determine what barriers a particular individual faces and use that knowledge as a starting point for negotiating a phased retirement plan."
Mary Coussons-Read, UC Denver
Coussons-Read offers two scenarios to illustrate how different phased retirement plans might work.
Scenario # 1: Ramp-Up
"Professor Grey has been with the university for many years and has been expressing a desire to retire for some time now. She had expected to be in a good position to retire two years ago, but the downturn in the stock market left her with a smaller nest egg than she'd hoped, and so she has continued to work as she needs the salary. In a meeting with Dean Jones, Grey indicates that she is still ready to retire but financially cannot afford to do so until she's saved more money. Jones offers her a retirement incentive package in which over the next two years she receives a salary increase of 8% each year to help fill her savings gap, and at the end of that period, she retires from the university. Grey is still an engaged teacher, so this works well for the department and for her. Grey is glad to accept, and the additional salary provided over the next two years puts her in a position to retire more confidently."
Scenario # 2: Ramp-Down
"Professor Smith has been talking about retiring for some time now but has not taken the steps to do so. In a conversation with his department chair, Smith admits that, although he does want to retire, he is a little uneasy about going from his full-time job of teaching and doing a substantial amount of service to 'doing nothing,' as he puts it. Smith's department chair and dean work together to develop a phased retirement plan that allows Smith to gradually ramp down his university duties and salary over the next five years. Smith likes this idea, as it keeps him engaged in his department and creates time and space for him to figure out what he will do once he retires fully. Moreover, the gradual decrease in Smith's salary allows the college to begin to reinvest some money into new positions and programs. Smith gladly accepts the retirement agreement and commits to retiring at the end of the designated five-year period."
Make the Agreement Formal
"Make sure that this is a professional agreement -- make sure costs, pay, and the professional responsibilities of both parties are clear. Make sure you involve your legal department."
Mary Coussons-Read, UC Denver
Coussons-Read offers the example of a faculty member who agreed to teach a course during one semester in the ramp-down period, but then the course had insufficient enrollment and was canceled. To prevent misunderstanding and conflict, this is a case in which it would be critical that the agreement outlines whether the faculty member is still responsible to teach another course.
Also, think through the incentives you want to include in the agreement. For example, will faculty members during a ramp-down period still be eligible for raise pools?
The Thank You
Finally, Coussons-Read notes that a little planning ahead regarding recognition of retiring faculty goes a long way. Here, too, you want to have a clear plan. She cites the case of one department chair who, upon retirement, was given a desk clock by the university with a note of congratulations for his 25 years of service with that institution. "To have everything that you've done minimized to a desk clock," Coussons-Read remarks, "doesn't leave you feeling appreciated."
Coussons-Read advises going beyond the call of duty to thank retiring faculty and communicate to them that their contribution has been valued by the university. A reception, a roast, or a departmental party for the faculty and their family are all tried-and-true approaches, but make sure that the function is focused not on their retirement but on celebrating the next phase of their life and career. "Do something personal," Coussons-Read advises, "but respect that faculty member's level of comfort with public acknowledgment. Most of us want to be thanked, but not all of us want a large function. In either case, do something that provides a very clear 'thank you.'"