Motivating the Reluctant Retiree (Singular)

When Inside Higher Ed asked college presidents last spring about strategies they would use to deal with the economic downturn if they didn't have to worry about political opposition on their campuses, "mandating the retirement of older faculty" led the list at private nonprofit institutions and was near the top for public colleges.

That answer reflected the concern among campus leaders that many of the older professors who are of typical retirement age -- but whose savings were diminished by the stock market implosion -- will opt not to leave, creating a logjam in the hiring of a new generation of instructors at a time when many institutions lack funds to simply add faculty positions.

Many campuses have put in place programs to encourage faculty members (and other employees) to move on, either through staged programs that ease them into retirement over a period of years or through broad early retirement programs that offer incentives to broad groups of professors (typically over a certain age, who have worked some number of years at the institution, etc.). The latter type of program is especially common in bad economic times, as institutions seek either to cut spending or, more commonly, to free up funds to hire new professors or for other purposes.

But a truism among human resources experts is that because such programs are often structured to include significant numbers of people, institutions have little control over who takes the offer and who doesn't -- and in many cases, the "wrong people" (in an employer's eyes) leave.

That's because the most vital scholars and teachers are often those who have the best options outside the institution, while others may be reluctant to leave because they see retirement as a "social death," as University of Virginia President Teresa A. Sullivan put it during a discussion about faculty retirements at the American Council on Education's annual meeting in March.

Those were among the issues with which the University of Colorado System wrestled in the depths of the economic downturn in 2009, when its officials -- who had been accustomed to seeing about 50 professors a year retire from the flagship campus in Boulder -- saw that number plummet to 4. "A lot of them seemed inclined to just step back and wait" for the economy to recover, says E. Jill Pollock, chief human resources officer for the Colorado system.

That sort of stagnation posed a potential problem for Boulder, where the 822 tenured professors had an average age of 52, with 17 years' service and a salary of just over $100,000. Boulder officials wanted to continue recruiting new professors (to build the faculty for the long term) and to have the flexibility to make selected senior hires in key programs, but those tasks would prove difficult without the funds that would have been freed up by the departures of those normally expected to retire. Boulder has more than 100 professors in its phased retirement program, but those people can remain on campus for up to five years.

'What Would It Take?'

University administrators began a series of discussions with faculty leaders about "what would be interesting to them, and what it would take" to get would-be retirees to consider taking the plunge, Pollock says. Since "a lot of them had just lost quite a bit of their savings," money topped the list.

As Colorado officials discussed how to craft a retirement incentive that would be both large enough to attract meaningful numbers of reluctant retirees and targeted enough to focus on those the institution felt most comfortable losing, they opted to take an "individual" rather than a "group" approach, Pollock says.

The traditional approach is to define a set of criteria and make the benefit available to anyone who qualifies. Instead, the university created a program that allowed all deans to identify individual candidates in their schools who met certain criteria (55 or older, with at least 15 years of experience) and whose productivity -- for a variety of reasons, such as changes in student interest or declines in research funding -- was perceived to be waning.

Those individuals were offered an extremely attractive but unusual deal (with non-negotiable terms): two years' pay at their final base salary paid over five years into a 403(b) retirement account (most incentive programs offer a year's pay). In exchange, the faculty member had to relinquish tenure and commit (for tax reasons) to do no work for which he or she received pay from the university for that five-year period, and Colorado would provide retirement planning coaching on both financial and non-financial matters.

The dean of a particular college at Boulder could let the provost pick up the entire cost for a retiring professor -- in which case the university was free to move the budget line for that position elsewhere to a school or department that needed it more -- or the college could split the cost of the two years' pay, in which case the dean would get the budget line after one year or two.

Colorado's president approved the plan in October 2009 and the university rolled it out in the spring of 2010, for retirement dates from May 31, 2010, through the end of 2011. In all, 36 professors were approached, and 31 accepted the arrangement -- 12 in engineering, 13 in arts and sciences, and the rest spread among Boulder's other schools. The 31 professors who accepted their deans' offers -- all but three of whom were men -- averaged 67.8 years of age and 34.1 years of service, and had an average salary of $98,523, says Pollock, who described Colorado's approach to an eager audience of peers from other colleges at the annual forum sponsored by TIAA-CREF in April.

One of the participants in Colorado's program, Howard Wachtel, a professor of electrical and computer engineering, just concluded his 50th year in higher education, but said he had been in no hurry to retire. He had cut back sharply on his research -- "I stopped squandering the government's money," he jokes, after years of receiving funds from the National Science Foundation, the Office of Naval Research, and other agencies -- but continued to teach courses in neuro-engineering and neuroscience that were likely to end when he stopped teaching them.

"I figured it would be likely that nobody would take over what I was doing, and in that context, I thought I was still doing things that are better than those things not being done at all," he says.

But when Wachtel got a letter from the university's associate vice provost about the retirement incentive, the timing was right, he says. Because the funds he'll receive are tax-deferred, "the difference [in pay] between working and not working for me would be very small" over the next two years. So after going out "guns blazing" this fall, with more students taking his courses than ever before, Wachtel says, he hopes to teach next year in either Arizona or Singapore, and "might get back into research" through collaborations with colleagues elsewhere.

Can You Single People Out?

Interestingly, Wachtel says that he thought that the offer letter he received had been "sent out to hundreds of faculty who met the eligibility requirement." (That wasn't the case, although the fact that Colorado's engineering school adopted the program so enthusiastically makes his impression that "I can't think of anybody who would have been eligible who didn't get [the letter]" understandable.) Wachtel's sense -- that it "would get [university officials] into all sorts of legal trouble if they singled people out" -- is one many faculty members would probably share, but Colorado examined it carefully, Pollock says.

"Nobody is being forced to take this," she says. "You're offering them a quid pro quo opportunity -- to get something they want in exchange for giving up their tenure. It has to be mutually agreeable."

Pollock acknowledges that the program "wasn’t highly visible" on Colorado's campuses (some campus leaders opted not to use the new tool at all), although she did discuss it with the university's Faculty Council.

"I'm not sure how many faculty got the point that it was targeted rather than one that you could ask for -- it kind of went over people's heads," says Joseph Rosse, a professor of management at the Boulder campus and chair of the campus's Faculty Assembly. "I heard virtually no discussion of it this year. One reason it was so low-visibility is because they were so careful to avoid any characterization of it being for 'deadwood' professors."

Mark R. Malone, a professor of science education at the university's Colorado Springs campus and chair of the system's Faculty Council, says that faculty members briefed about the plan saw it as an alternative to other, less appealing options that seemed to be on the table given sharp reductions in state funds, such as closures of academic programs or reductions in retirement benefits. "The university was clearly looking for things to give it more financial flexibility, and this seemed better to us than just closing down a school," he says. (Of course, Colorado has since closed a school, too -- shuttering its journalism school as part of a broader effort to remake its communications curriculum.)

Pollock describes the individualized retirement approach as a success so far, giving Colorado officials another "financial management tool" to deal with both fiscal and staffing issues. It won't work for every campus, she notes -- "it is expensive, and not every place can set aside money upfront to cover the costs" -- but campus officials lined up to talk to her after the TIAA-CREF session, suggesting that many colleges are looking for innovative ways to encourage the reluctant retiree.