Howard University, hoping to get a head start in dealing with “a considerable number” of expected retirements this decade, has joined the ranks of institutions offering tenured faculty generous retirement plans in exchange for helping it better manage its recruitment, retention and retirement efforts.
This month, 177 Howard faculty members, some with decades of tenure and service to the university, began participating in a voluntary retirement program. The one-time offer, rolled out over the past several months, offered eligible faculty customized full- or part-time employment plans for up to five years with full medical benefits and pro-rated compensation based on one’s work level.
To participate, those who qualified for and agreed to the plan agreed to take retirement effective July 1, 2012 and surrender their tenure with the institution. Most of the 177 will continue to teach at Howard either on a full- or part-time basis over the next few years.
Howard officials declined to provide an estimate of the costs and savings involved in the program, asserting it would be premature to do so, as its full impact is still being assessed.
While outside estimates put the potential cost at millions, a number of variables could affect the final number. Eligible faculty had numerous options on how much longer they wanted to work, at what level of engagement or whether they would simply take a one-year lump sum package. The final costs will also be impacted by what Howard must pay in the market to attract the caliber of scholar it hopes to recruit and retain once this cohort of 177 professors has left the school by July 1, 2017.
In deciding to pursue the strategy, Howard officials also had to consider what costs the university would incur if it did nothing to accelerate retirement in the coming years.
Their number of years in service among the group volunteering for the retirement plan runs the gamut as do their ages; since 1995, federal age discrimination laws bar mandatory retirement at age 65, with few exceptions. That helps explain assertions by some faculty at the university that nearly 80 percent of the faculty in some departments was presently eligible to retire.
The university, however, said 450 of its nearly 1,200 full and part-time faculty had been eligible to join the new retirement program and 212 applied. Of the 177 accepted, 34 took full retirement effective July 1 of this year.
The program was offered to tenured faculty, master instructors, and career status faculty with five or more years of service and whose age added to years of service totaled 70 or more, the university said.
Howard has been engaged in a significant cost-cutting program over the past year. The volunteer retirement plan was more than an economic consideration, however, said Dr. Wayne A. Frederick, provost at Howard and a 2011 Diverse Emerging Scholar.
“The goal is two-fold,” said Frederick. “[We want to] Gradually transition faculty that are retirement eligible and review the [university’s academic] programs in a very structured way.” Having a retirement plan with some predictability, allows the university to draw on the institutional knowledge of those preparing to leave, he noted. He characterized them as “still significant contributors. The idea was to transition in an organized fashion.”
Cost estimates aside, Howard officials said the Phased Retirement Plan (PHP), as these buy-out plans are commonly known in human resources circles, won buy-in across the academic spectrum in all schools of the university. Participants include full professors, assistant professors with tenure, master teachers and others.
Howard is the most prominent historically Black college or university to join other major predominantly White research institutions in trying to get ahead of the retirement curve. Some PHPs, like the one at Cornell University, date back to the 1980s.
Prior to Congress’s 1995 adoption of age discrimination legislation, retirement was more predictable. When a person turned age 65, it was retirement time. The revised age discrimination law prompted university counsels around the nation to caution administrators about even raising the retirement topic with faculty and made retirement impossible to impose, short of demonstrating the person was incompetent or had committed some gross offense.
The law gave many colleges more time to ponder what to do about their aging population of scholars. Many did little, especially with college enrollments still booming in many parts of the nation, well-trained academics with top credentials still short in number and coming at a premium.
Today, with the ranks of older academics swelling around the nation, fears growing that many will retire in droves rather than in light waves, and budgets being slashed year-after-year, more and more institutions are looking seriously at offering phased retirement programs.
“Most universities are really, in the last year or two, getting on board with this,” said Claire Van Ummersen, senior adviser to the division of leadership and life long learning at the American Council on Education (ACE). “You want to do things in a planned way that’s positive for the individual and positive for the institution.”
In a paper prepared for a conference this time a year ago on faculty retirement, ACE said “many professors” are choosing not to retire, a choice they are making at a time when “colleges and universities are trying to control costs, open slots for younger faculty and manage the retirement process by offering incentives while not triggering a mass exodus.”
“It is a tricky balancing act that requires institutions to navigate between their own needs and those of loyal, long-serving faculty,” the ACE paper said.
Some large research institutions have engaged in phased retirement strategies for years, said Van Ummersen. She said making good exit plans helps recruitment and retention efforts too, noting recruitment costs per faculty member can be as low as $5,000 for a teacher in the humanities and as high as $500,000 to $1.5 million for scientists (depending on the cost of a professor’s laboratory).
Van Ummersen echoed Howard officials in suggesting the topic of retirement among academics needs to be handled carefully. They noted most academics have been on their jobs for many years and have never thought of life after retirement, pension benefits and post-retirement health care. The phased retirement strategy, which usually includes the costs of talking with financial counselors and retirement workshops, is a big help, Van Ummersen said. So is keeping the ‘retirees’ in jobs on campus as instructors, mentors to new faculty and heading special projects, such as accreditation teams.
“You make very good use of that faculty that’s retiring,” said Van Ummersen. Done effectively, institutions earn in continued valuable service what they paid out in the retirement plans.
To help more schools get a sense of best practices in addressing retirement and pursuing phased retirement strategies, ACE and the Alfred P. Sloan Foundation last month recognized 15 colleges and universities with cash awards of $10,000 each in recognition of their support of faculty “before, during and after retirement.”