2015-03 From the President: Retirement at Colleges and Universities

March, 2015 Retirement at Colleges and Universities

In 2014 the American Council on Education published Faculty Retirement: Best Practices for Navigating and Transitioning. It consisted of several chapters on the subject, first tracing the recent history of mandatory retirement and the changes that led to its end. Later chapters were devoted to the efforts of 13 institutions to mitigate the effects of this change. 

In 1907 William Osler, chief physician of the Johns Hopkins Medical School, made a case for mandatory retirement in his outgoing talk. He claimed that faculty who were over the age of 40 were unproductive and that faculty over 60 were a nuisance. This attitude, along with a growing queue of well-qualified potential faculty who were waiting for places in the academy, led to the passing of mandatory retirement rules in many higher education institutions. By the 1960s these mandatory rules were putting a substantial percentage of the workforce into retirement, many of whom were not happy about it. 

The population has aged since 1900. According to a CRS Report for Congress on life expectancy in the U.S. by I.B. Shrestha, average life expectancy went from 52.0 years in 1901–1924 to 75.8 years in 1982–2004. Many of these older people were able to continue working, and because of their extended lifespan they needed to work. But mandatory retirement rules blocked opportunities for their continued employment. 

In 1967 congress passed the federal Age Discrimination in Employment Act (ADEA). The act protected employees between 40 and 65 from mandatory retirement. As 65 was commonly the retirement age for many faculty and staff in higher education, not much changed. But in 1978, an amendment to ADEA prohibited mandatory retirement before the age of 70. Again, in 1986, another amendment was passed to outlaw compulsory retirement in most sectors. But higher education continued to use mandatory retirement rules until 1993 when congress concluded that, as few faculty members worked beyond 70, a mandatory retirement age in higher education was unnecessary. So, faculty members no longer were forced into retirement by their age. 

This forces universities to become creative in managing their aging workforce, while also making efforts to replenish their activities with younger people. A popular innovation has been the use of phased retirement plans. Our University had begun a version of phased retirement in the early 1980s. This has evolved into the current version, passed by the regents in 2003. 

In 2003, the regents of the University of Minnesota began offering phased retirement at age 55+ to tenured faculty and professional administrative (P&A) employees on continuous appointment. In exchange for surrendering continuous appointment/tenure they can reduce their work load and receive medical and dental benefits, vacation, and life insurance for between one and five years. 

According to the University's Office of Human Resources reports, between 2004 and 2013, 625 faculty members and 684 P&A staff retired for a total of 1,309. Of that 1,309 total in those years, there were 350 qualified tenured faculty and continuous appointment P&A staff who took advantage of the phased retirement option (26.7 percent). It should be noted here that most P&A staff do not hold continuous appointments, therefore most do not qualify for the phased retirement option. 

The average age of retired faculty members has crept up slightly during those years (age 66 in 2004–05; 68 in 2012–13). The average age of P&A retirees has fluctuated from year to year, but has also grown (age 58 in 2004–05 to 61 in 2012–13). 

This reflects a trend reported in a 2011 study by TIAA/ CREF that showed that only 25 percent of the "Baby Boomer" faculty intend to retire by age 66. 

"Considering that the baby boomer generation is the largest cohort in academe (U.S. Department of Education, 2004), institutions will need to be prepared to work with this generation and to have supports in place to allow for them to work longer." ("Faculty Retirement" page 7)

Given these figures, it is hard to say how effective phased retirement has been in moderating the trend toward later retirements at Minnesota. We will need to continue to find ways to balance longer career paths with the need for opening places for younger faculty and P&A staff.

— Hal Miller, UMRA President [email protected]