Administrators of postsecondary institutions have interest in early retirement incentives for faculty. One of the reasons administrators have used this human resource tool is to increase turnover of faculty since an amendment to the Age Discrimination in Employment Act eliminated a mandatory retirement age for higher education faculty in 1994. After many years of implementing retirement incentives, administrators may wonder how much different the retirement rate would be or how the average retirement rate might change if incentives were not used.
Through ANOVA analyses, this study examined differences in annual retirement rates and average retirement age based on retirement incentives and institutional characteristics. The data base for this study was the 2005-06 survey of institutions conducted by the American Association of University Professors. Multiple variable regression was used to analyze models to predict annual retirement rates and average retirement age.
Overall, significant differences were found. However, with the differences between retirement rates at approximately 1% and the approximate difference of one year in average retirement age, the practical significance of the results depend on institutional goals. On the other hand, there is a statistically significant difference of three years between the average age of retirement of public institutions and private (not for profit) institutions. Also, a statistically significant difference of 1% exists between public and private retirement rates.
Another finding suggests that institutions implementing phased programs might experience a decline in retirement during the first couple of years of implementation and then increase to a steady rate.