The Art and Science of Managing Faculty Retirements

The Chronicle of Higher Education
From the issue dated June 13, 2008

By DAVID L. WHEELER
With the average age of faculty members going up and the number of students expected to go down, many colleges are encouraging professors to retire. That is not a universal urge — in some regions of the country, like the Southwest, colleges anticipate rising enrollments, and in some disciplines, like nursing, skilled faculty members are in short supply. But for those institutions encouraging retirement, here is what managers suggest:
1. Make discussions about faculty retirement part of career planning. If department heads have regular discussions with faculty members about their performance and professional plans, it is natural to bring up retirement. But, "if you start that discussion at 64," says Charles E. Phelps, a professor at the University of Rochester who stepped down as provost in August, "you are staring a lawsuit in the face."
2. Offer financial planning and lifestyle counseling. In a 2007 survey conducted for the American Association of University Professors, 248 academic institutions said they offered "lifestyle planning," intended to help potential retirees figure out how they might spend their free time. When it comes to professors' finances, institutions can offer financial tutoring either on the campus or in partnership with a financial-services company, or provide a shopping list of qualified financial planners. For better-paid faculty members and administrators, perhaps professors of surgery or business-school professors on the consulting circuit, that advice may need to be more along the lines of "wealth management," including advice on how to have a diverse-enough portfolio to produce consistent income during volatile markets.
3. Provide a health-insurance bridge to age 65 — and beyond. No doubt about it, the biggest potential leak in any professor's retirement boat is health-care expenses. And the biggest problem for anyone trying to arrange an early-retirement is health-care insurance. TIAA-CREF estimates that from age 60 to 90 even someone with health insurance and Medicare will have an average of $220,000 in unreimbursed costs. One review of health-insurance research in all workplaces found that making insurance available for retirees increased the chances of retirement by 30 percent to 80 percent. One big problem for institutions, though: They face a huge, unknown liability if they promise to provide full health insurance for retirees. So more institutions are putting fixed amounts of money in tax-protected health-savings accounts that faculty members can also contribute to.
4. Create the option of phased retirements. For many professors, fear of retirement is fear of the unknown. A phased retirement allows them to slowly cut down on their work hours and see how they enjoy unstructured time. "People don't want to give up contact until they have tested the waters," says Mr. Phelps. When he served as provost, he was surprised by how many faculty members quit earlier than expected in phased retirement: Once they tried having more time off from work, they liked it. [To read the entire article, go to: http://chronicle.com/weekly/v54/i40/40a01501.htm?utm_source=at&utm_medium=en ] Subscription required.