The Value of Phased Retirement

Steven G. Allen, North Carolina State University

April 2004 |

Many universities have adopted phased retirement programs in recent years. This paper begins by examining the logic of such programs from the standpoint of both faculty and university administration. Data from a 1999-2000 AAUP survey of universities will be used to provide descriptive statistics about the incidence of phased retirement programs across a wide range of institutions of higher education, as well as some of their key characteristics. Data from other sources will be sought to provide more recent information.

The paper will then carefully examine the experience of the UNC system with a phased retirement plan that was launched in 1996. Trends in retirement rates before and after the launch of phased retirement will be examined, along with the characteristics of faculty who had the greatest likelihood of entering phased retirement. This work will update and extend previous analysis reported in Ghent et al (2001) and Allen et al (2003). Specific attention will be paid to the types of faculty accepting phased retirement and how they compare to those of faculty entering full retirement.

In cooperation with the Office of the President of the UNC system, a special survey will be conducted of faculty eligible for phased retirement and of those who have selected phased retirement. A more careful study of those who have entered phased retirement will reveal (1) the duration of phased retirement (upper limit is three years at almost all UNC institutions, but it is not known whether faculty tend to work half-time for the full three years), (2) the activities in which phased retirees were engaged, and (3) financial well-being of those entering phased retirement. Data on faculty perceptions of the value of phased retirement also will be reported.

The conclusion of the paper will assess the cost and benefits of phased retirement, based on available evidence. The paper will be written in a style that will be accessible to an audience of top-level university administrators.

© 2014 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), New York, NY 10017