Recruitment, Retention and Retirement in Higher Education

Recruitment, Retention and Retirement in Higher Education

Building and Managing the Faculty of the Future

Edited by Robert L. Clark and Jennifer Ma

This volume examines some of the most pressing employment and compensation issues confronting academic administrators. Contributors discuss topics such as: ageing of faculty, changing economic conditions and shifts in faculty employment patterns, rapid increases in health care costs and trends in retiree health insurance, and adoption of phased and early retirement programs.

Chapter 7: Impact of retiree health plans on faculty retirement decisions

John Rust

Subjects: economics and finance, economics of education, public sector economics, education, economics of education


John Rust 7.1 INTRODUCTION Tenured faculty members at academic institutions in the US (i.e. colleges and universities) are privileged to hold one of the most secure job contracts available. With essentially no risk of being fired, in a job that offers great working conditions, minimal levels of physical exertion, a high degree of flexibility and personal freedom, in addition to fringe benefit packages that are often far more generous than non-academic jobs, it should not be surprising that many academics have little incentive to retire. Indeed, some academics privately regard their jobs as fully paid ‘virtual retirement packages’. At the same time, colleges and universities are under increasing financial pressure as a result of recent cutbacks in government funding and student financial aid, the decline in the stock market, increased competition for students and research dollars, and rapidly rising costs – including the costs of providing ‘fringe’ benefits such as health care to their employees. These pressures are especially acute at some of the smaller liberal arts colleges that do not have large endowments and Federal research support, and whose revenues are therefore highly dependent on tuition. Even though tuition at the major public universities has increased rapidly in recent years in order to offset reductions in state and federal funding, these large percentage increases were made from a much smaller base so tuition at most public universities is still generally far less than tuition at private colleges and universities. As a result, many small to medium-sized...

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