Copyright 2008 The Chronicle of Higher Education
All Rights Reserved
The Chronicle of Higher Education
June 13, 2008 Friday
SECTION: SPECIAL REPORT; Pg. 1 Vol. 54 No. 40
HEADLINE: Colleges Explore New Ways to Manage Retirements
BYLINE: DAVID L. WHEELER
BODY:
An English professor leans forward, looking as if she is about to step through a magical door. A music professor in a white bow tie and black tails faces a video camera and an admiring audience as he talks about his career. Some smiling, gray-haired men at a barbecue grasp their sodas and beers.
At retirement parties at hundreds of colleges this spring, faculty members celebrate their expanding freedom and mourn the winding down of their work lives. The post-World War II generation is leaving the work force, and professors are in the ranks. "We have 78 million baby boomers marching into retirement," says Maliz Beams, executive vice president for individual client services at TIAA-CREF, which serves customers at three-quarters of the country's nonprofit colleges. "That's the single largest such event any of us will see in our lifetimes."
Changes at TIAA-CREF hint at the preparations needed to cater to the academic-retirement parade as the first baby boomers turn 62 this year: In the last six months, the company has tripled its number of offices, to 61, and opened a third site where customer-service representatives take telephone calls. In the last year, the company has hired a thousand financial-planning advisers.
Meanwhile at colleges, presidents, provosts, and even faculty senates are taking a fresh look at how to manage professors' retirements. A few institutions that have sought to trim their tenured-faculty ranks for other reasons offer early lessons for those institutions that want to encourage retirements. Many institutions are doing just that, using managerial tools such as buyouts and "phased retirement," or the gradual reduction of work schedules.
Professors present an unusual problem when it comes to retirement: They actually like their jobs, and often do not want to leave them. Despite the stereotype of academe as riddled with low-stakes, high-vitriol conflicts, research paints a different picture. A TIAA-CREF telephone survey last August of 300 full-time faculty members at four-year institutions, for example, found that 53 percent of professors were "very satisfied" with their jobs, compared with 42 percent of all workers.
The average age of retirement in the general population is 62. But in academe, faculty members appear to be retiring at 66, on average, and that age is drifting upward, although retirement data is not always as crisp as demographers might like. The August telephone survey found that about one-third of those responding expected to retire at age 70 or later. The ability of colleges to enforce a mandatory retirement age of 70 ended in 1994, when an academic exemption for a federal age-discrimination law expired.
There is, of course, variation. A professor with a heavy teaching load who feels that he is a slave to his students may be more interested in retiring than someone who spends the majority of the week engaged in research that reflects a lifelong passion.
"At the most selective liberal-arts colleges and research universities, many faculty members would like to stay on as long as they can," says Ronald G. Ehrenberg, director of the Cornell Higher Education Research Institute. That is especially true, he says, at private research universities because professors at those institutions "love what they are doing, and their whole identity is tied up with their work."
The Allure of the Buyout
Mr. Ehrenberg thinks the majority of academic retirements will occur naturally. "I don't think colleges are going to be in such a hurry to kick people out," he says. He and others say that young Ph.D.'s should not count on a windfall of jobs as their elders turn emeritus. Cost-conscious colleges, for instance, could shift some jobs off the tenure track. And past predictions of waves of retirements helping out the academic job market have flopped: A major study published in 1989 by William G. Bowen, then president of the Andrew W. Mellon Foundation, predicted that colleges could face severe faculty shortages by the end of the 1990's, largely because of retirements. But the expectations raised for an improving job market in the arts and sciences did not materialize.
Mr. Phelps noticed that faculty members in different departments reacted differently to the idea of retirement. Humanities professors, who might be used to a relatively solitary life of writing and library research, could imagine themselves still pursuing their professional interests in retirement. Scientists whose research required assistants, equipment, and laboratory space might find the thought of retirement more anxiety provoking.
One of the more unusual tools Mr. Phelps used to encourage retirements was a buyout program that paid more to faculty members with lower salaries. Under the university's merit-pay system, the assumption was that faculty members with lower salaries were less productive, and it would be worth more to the university for them to leave. The program is still active, and all eligible faculty members can speak confidentially with an administrator about the terms of possible buyouts without alerting their bosses.
When officials at the University of Rhode Island took a close look at full-time tenured and tenure-track faculty members early this year, it was clear that the institution's faculty was graying. Of about 640 professors, just under one-third were age 59 or older, and 105 were 65 or older. A few were rapidly approaching 80.
"We saw that we had a fairly high proportion of senior faculty," says Donald H. DeHayes, the university's new provost. "At a time when students are arriving at our doorstep with a different set of skills related to how they learn and how they access information, we needed to create a little more balance in the age profile."
The institution was also bracing for $13-million in state budget cuts expected to come this year and next. If enough senior faculty members could be enticed to retire, officials concluded, the university could save money even after the payouts.
Professors who are 65 and over have salaries and benefits that total about $140,000 a year, on average, Mr. DeHayes said. A new assistant professor would command a salary of about $60,000 on average, plus benefits worth about $20,000. In mid-March the university offered a one-time early-retirement incentive of $20,000 -- a $13,000 increase over what has been offered since 1997 -- to faculty and staff members who were at least 58 and had worked for 15 years or more.
To sweeten the deal, the university offered the opportunity to keep postretirement health benefits that will disappear for future retirees after June 30. "This was the time for us to put a little bit more on the table for some faculty that were wavering," Mr. DeHayes said.
In the end, 46 faculty members accepted the payout. They will retire at the end of this month. In a typical year, about 20 faculty members retire from the university.
Mr. DeHayes calls the savings "a modest pool of resources" that the university can redeploy. "We've just begun to really figure out what we want to do," says the provost, who has been meeting with deans to help craft a strategic plan that he says will help the university to "stand out and be relevant."
Concern From Professors
Sometimes the driving force to review retirement policies comes from the faculty, not the administration. At the University of Nevada at Reno, a faculty-senate committee recently completed a report that details the impending retirement bubble at the flagship public institution. Thirty-one percent of the university's faculty members are 55 and older, and the number of faculty retirements each year, now 39, has doubled since 2002, says B. Grant Stitt, a criminal-justice professor who is chairman of the committee.
He is also chairman of his department, and half its professors will be 60 or older this year. Mr. Stitt says the university needs to manage the exit of an aging work force, even as the state's higher-education system copes with a 14-percent budget cut beginning next year.
"I think that a lot of states put this on the back burner because on the front burner are budgetary problems," says Mr. Stitt. "You deal with the immediate crisis before you move on to the next."
Among the recommendations in the report, which has not yet been publicly released: Faculty members should try to make their retirement plans known to their departments as early as they possibly can. "If they have any kind of concern for the university," says Mr. Stitt, "they would say 'I'm going to be going in two or three years.'" Then, he says, the retiring faculty member could sit down with the department chair and talk about how to make the transition a smooth one.
But Mr. Stitt, who turns 61 this week, realizes that making such a move isn't as easy as it sounds. "The biggest problem is, because of the economy, people just don't know what they're going to do," he says.
For professors, retirement, especially in its planning stages, can be an anxious time. TIAA-CREF personnel talk to 17,000 people a day, either in person or on the phone, Ms. Beams says, and for participants about to retire, those conversations can be tense. "Their entire life savings has never been larger," she says, "but their ability to recoup from a mistake has never been smaller."
For college leaders trying to steer their institutions through some tricky political shoals as colleges come under attack for high costs, low accountability, and a failure to meet labor-force needs, the wave of retirements may be an opportunity to get a better grip on the wheel.
The situation, says Paul J. Yakoboski, a principal research fellow and retirement scholar with the TIAA-CREF Institute, "creates the opportunity for the universities to rethink their offerings and how to provide them." Robert L. Clark, a professor of business management and economics at North Carolina State University who has studied retirement in academe, says colleges should "be thinking about the faculty of the future and how they can achieve that."
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