Office of the Vice President for Global Communications

Tuesday, September 8, 2009

Record Update first

Faculty retirement outlook puts focus attention on economic incentives

The university faces a “perfect storm” of faculty staffing challenges over the next few years that will sharpen the need for increased overall compensation, faculty representatives told the Board of Regents last week.

Frederick Askari, chair of the Committee on the Economic Status of the Faculty at the Ann Arbor campus, said looming retirements at U-M and other top universities will increase pressure on schools to retain or attract top academic talent from the next generation of tenured and tenure-track professors.

“It’s easy to get focused on current problems (such as state funding cuts and tuition increases), but if you take a step back and say, “What’s the challenge that’s going to face the university five years from now?” it really has to do with the fact that we’re going to have to replace a large number of our faculty,” Askari said.

Half of U-M’s faculty will be eligible for retirement by 2013, Askari said in the committee’s annual report to the regents. While all won’t necessarily leave in the next four years, the eventuality of such a large-scale loss of experienced professors must be considered.

He pointed out that although Michigan is frequently listed among the country’s best universities to work for, other schools also looking to fill holes in their professorial ranks will continue to compete with U-M, and in some cases target its faculty.

“We run the risk of losing not only the people who are retiring, but our best and brightest and most successful mid-level faculty,” said Askari, a clinical associate professor of internal medicine.

The challenge of addressing such long-term faculty needs while U-M tries to hold down costs in a difficult economy is compounded by the looming cost of health benefits for those expected to retire. “It’s kind of like a perfect storm,” Askari said.

Askari’s committee suggested several recommendations to make staying at or coming to U-M more economically attractive. They include:

• A more progressive employee contribution to health-care premiums that increases more gradually and asks highly paid employees to contribute more. Currently, anyone making $50,000 or more pays the same amount toward health benefits, which has a greater effect on the take-home pay of people at the lower end of that pay bracket.

• Repealing the recently enacted one-year waiting period before employees can receive the university matching contribution to their retirement accounts. If a waiting period is used, the committee recommends it be waived for recruits who are already vested and receiving a matching benefit from their current position.

• Providing a tuition benefit to faculty dependents. The committee suggests an arrangement under which the university would match a faculty member’s contribution to the Michigan Education Trust, a state-run pre-paid tuition program.

Similar committees from UM-Flint and UM-Dearborn also presented their recommendations.

Karen Strandholm, chair of the Dearborn campus’ committee and an associate professor of management, urged regents to bring all faculty salaries on that campus to within 90 percent of the average salary paid at peer institutions. The committee estimated such a move would cost a total of $44,500.

At UM-Flint, chair Aviva Dorfman, an associate professor of education, asked regents to address the decline of tenured and tenure-track faculty as compared with the growth of full-time and part-time lecturers, full-time professional and administrative positions, and student enrollment.