Recruitment, Retention and Retirement in Higher Education
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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.
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Chapter 13: The costs and benefits of early retirement plans

John B. Shoven

Extract

13. The costs and benefits of early retirement plans John B. Shoven 13.1 INTRODUCTION Mandatory retirement had certain advantages for higher education. It facilitated planning for faculty renewal, it avoided delicate issues of competency and, for many faculty, it provided an automatic answer to a difficult question – namely when to retire. Many colleges and universities believe that fresh ideas often result from new appointments of young faculty, and that the number of slots available for such new hires would be seriously curtailed if senior faculty remain on the job far longer than before the elimination of mandatory retirement. For these and other reasons, many colleges instituted early retirement incentives following the lifting of mandatory retirement in 1994. The purpose of this chapter is to describe the features of those plans and to assess the costs and benefits that they offer. While the plans will be described generally, I will outline the Stanford plan in some detail as it is the one that I know best. 13.2 DESIGN FEATURES I am going to describe early retirement plans that can be used in an environment of defined contribution pension plans. Defined benefit (DB) plans, such as those at many state universities, have their own set of issues. Quite typically, DB plans offer a pension benefit at age 65 depending on final salary and years of service. Early retirement incentives are easy to incorporate into such plans, both permanent and temporary ones. The DB...

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