Colorado Daily (University Wire), March 13, 2007, Tuesday
Copyright 2007
Colorado Daily via U-Wire
University Wire
March 13, 2007 Tuesday
BYLINE: By Paula Pant, Colorado Daily; SOURCE: U. Colorado
DATELINE: BOULDER, Colo.
BODY:
Colleges and universities nationwide are creating incentives to lure tenured, retirement-age professors out of the ranks, according to a recent eport.
The survey by the American Association of University Professors is basically good news for all, showing senior faculty receiving attractive retirement packages and junior faculty increasingly sought after.
"I think the most interesting find is none of [the universities] said they're worried about retirement," said Ronald Ehrenberg, a professor at Cornell University's Higher Education Research Institute. "That's because there are so many people approaching retirement age that it wouldn't be a big deal if a few of them decided to postpone their retirement."
"[The universities'] bigger concern," Ehrenberg added, "is where do we find the faculty of the future?"
Universities face an aging faculty. The oldest Baby Boomers -- those born in 1946 -- will reach the traditional retirement age of 65 in four years.
In 1994 a law banning mandatory retirement went into effect. Universities, facing the possibility that tenured faculty could refuse to leave their jobs, worried about how to make room for younger faculty.
That concern has changed, said AAUP Executive Director Ernst Benjamin. "Universities have discovered they're not really having a problem getting faculty to retire. They're having more of a problem attracting and keeping good faculty."
Many institutions are now trying to retain some senior faculty, Benjamin said, so their established experts will be around to mentor and train new junior faculty.
One obstacle stands between the dream and reality of retirement, the survey found.
"The problem of escalating medical costs," Benjamin said, "is a real deterrent to faculty who are considering retirement."
The study of 567 public and private colleges and universities found rising health costs are the biggest concern among retiring faculty. Eighty-two percent of surveyed institutions offer retiring faculty better group health insurance packages than the basic COBRA plan required by law. Eighty percent of institutions allowed the retiree's spouse to remain eligible on the plan.
Most institutions offer guaranteed annual pensions, though they're shifting toward programs in which they instead deposit a percentage of the faculty's salary into a tax-deferred account.
With the decreasing prevalence of pensions, Ehrenberg advises new faculty to place as much of their salary into savings as possible.
When Ehrenberg's son was born in 1974, the new father placed $1,000 into a mutual fund. That amount sat untouched for three decades as interest compounded, Ehrenberg said.
By his son's 30th birthday, the fund had grown to $36,000, Ehrenberg said. The son used it to buy a house.
Thanks to compounding interest, "The savings decisions [young people] make will be much more important than the savings decisions they make later on in life," Ehrenberg said.
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