However, the reasons higher education faculty give for this are not all economic. The results of Fidelity Investments’ “Higher Education Faculty Study,” which examined the behaviors and attitudes of Baby Boomer (ages 49 to 67) faculty members at higher education institutions, found 74% plan to delay retirement past the age of 65 or never retire at all. When asked the reasons for this delay, 81% cited professional reasons, while 69% cited economic concerns.
Fidelity has seen that many institutions have implemented retirement programs aimed specifically at providing faculty with financial, professional and personal incentives to support them in making the transition to the next phase of their lives. Two-thirds (66%) of faculty boomers at institutions with faculty retirement programs think such programs are important, especially as they relate to providing retiree health care benefits. Three–fourths (76%) cite retiree health care benefits as an important feature of a faculty retirement program. In addition, 53% want continued access to facilities to be part of a faculty transition program, while 45% want emeritus status, and 43% would like guidance about financial and retirement planning.John Ragnoni, executive vice president for Tax-Exempt Retirement Services at Fidelity Investments, told PLANSPONSOR the firm works with a lot of organizations on how to get faculty engaged. In the current environment there is a combination of economic and professional reasons Baby Boomers want to delay retirement, and the professional reasons are more unique to higher education staff. “There’s a real need for retirement programs that help them transition,” Ragnoni said, citing survey results that show only 30% of higher education faculty have an actual, formal plan for retirement. “That’s why the focus is on getting engagement up,” he added.
Ragnoni noted that higher education employers have been very good at providing significant investments in retirement plans (see “Mandatory Retirement Plans Help Higher Ed. Employees”), so these faculty as a group are better prepared than other employees for retirement. The idea behind institutions’ retirement programs is the retirement plan is only part of a comprehensive program to get Baby Boomer faculty engaged.
Many employees are focused on their passion for what they have built their careers around, so they need support to start thinking about retiring. These employees benefit from actual guidance about retirement income and how to create a paycheck in retirement. Health care is also a concern; 42% of survey respondents said they are concerned about needing to continue health insurance benefits, Ragnoni noted. Higher education plan sponsors are providing information and education about what employees' options are in a variety of ways, in concert with retirement plan information. Ragnoni said these programs work best when plan sponsors work hand in hand with providers, offering comprehensive tools as well as one-on-one dialogue.
In addition, higher education faculty want to continue their relationships with the institutions they love and are dedicated to, so having continued access to facilities will help them to transition to retirement. “These programs help faculty consider things they never thought possible because they didn’t have a clear picture of how prepared they are for retirement,” according to Ragnoni.Giving faculty the education they need and putting them in a position to act will benefit all involved in terms of empowering employees and making way for revitalization of the organization, Ragnoni contended. When employees actually work through a plan for retirement, the retirement transition is smooth and meets faculty objectives, and for the organization it creates a balance of keeping experienced faculty to mentor others and still conduct research, and giving younger faculty the opportunity to take on more responsibility, he added.