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Introduction: Faculty Retirement and Age Discrimination

In the closing hours of the 1986 congressional session, the House and Senate reached agreement on legislation amending the Age Discrimination in Employment Act (ADEA) of 1967 to prohibit mandatory retirement on the basis of age for all workers except for tenured faculty in higher education, police officers, fire fighters, and a few executives and high-level policy makers. The exemption for tenured faculty, which terminates at the end of 1993, permits mandatory retirement of any employee who is serving under a contract of unlimited tenure at an institution of higher education and who has attained 70 years of age (ADEA, 1986, Section 12(d)).

In granting a temporary exemption for tenured faculty, Congress took a middle position between those who wished to extend full protection against age discrimination to faculty and those who feared that postponed faculty retirements would prevent colleges and universities from hiring new faculty, who are traditionally a source of new ideas. Some were also concerned that an aging professoriate would grow increasingly ineffective but unremovable because of the tenure system. Limited opportunities for hiring or an ineffective professoriate could adversely affect the quality of research and teaching in the nation's colleges and universities. Administrators, faculty, policy makers, and others who recognize the importance of the nation's basic research system were particularly concerned about possible negative effects on the research universities.

As a part of the compromise, Congress directed the Equal Employment Opportunity Commission to ask the National Academy of Sciences (NAS) to conduct a study analyzing "the potential consequences of the elimination of mandatory retirement in institutions of higher education" (ADEA, 1986, Section 12(c)). The committee's central task—the subject of this report—is to establish whether the special circumstances of tenured faculty in higher



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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education 1 Introduction: Faculty Retirement and Age Discrimination In the closing hours of the 1986 congressional session, the House and Senate reached agreement on legislation amending the Age Discrimination in Employment Act (ADEA) of 1967 to prohibit mandatory retirement on the basis of age for all workers except for tenured faculty in higher education, police officers, fire fighters, and a few executives and high-level policy makers. The exemption for tenured faculty, which terminates at the end of 1993, permits mandatory retirement of any employee who is serving under a contract of unlimited tenure at an institution of higher education and who has attained 70 years of age (ADEA, 1986, Section 12(d)). In granting a temporary exemption for tenured faculty, Congress took a middle position between those who wished to extend full protection against age discrimination to faculty and those who feared that postponed faculty retirements would prevent colleges and universities from hiring new faculty, who are traditionally a source of new ideas. Some were also concerned that an aging professoriate would grow increasingly ineffective but unremovable because of the tenure system. Limited opportunities for hiring or an ineffective professoriate could adversely affect the quality of research and teaching in the nation's colleges and universities. Administrators, faculty, policy makers, and others who recognize the importance of the nation's basic research system were particularly concerned about possible negative effects on the research universities. As a part of the compromise, Congress directed the Equal Employment Opportunity Commission to ask the National Academy of Sciences (NAS) to conduct a study analyzing "the potential consequences of the elimination of mandatory retirement in institutions of higher education" (ADEA, 1986, Section 12(c)). The committee's central task—the subject of this report—is to establish whether the special circumstances of tenured faculty in higher

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education education justify a continued exception to the national policy prohibiting age discrimination in employment. In the first part of this chapter we examine the origin of the tenured faculty exemption as part of the evolution of federal policy against age discrimination. In the second part we delineate the main issues raised by the possibility of eliminating mandatory retirement for tenured faculty and indicate where they are presented in-depth in the rest of the report. TENURE AND THE FACULTY EXEMPTION Tenure in Higher Education The issue of the tenured faculty exemption focused on the special characteristics of tenure in higher education. Tenure in U.S. colleges and universities arose in the latter half of the nineteenth century, largely as a protection for faculty against dismissal for exercising freedom of speech and inquiry. The 1940 Statement of Principles on Academic Freedom and Tenure developed by the American Association of University Professors and the Association of American Colleges, generally regarded as the "standard" for academic tenure (see Commission on Academic Tenure in Higher Education, 1973:1), provides that after a fixed probationary period, a faculty member should be considered carefully by peers and academic administrators for tenure on the basis of his or her accomplishments in teaching, scholarship, and college or university service. A college or university may offer tenure immediately to new faculty who have made contributions while employed at other colleges and universities. The 1940 statement (American Association of University Professors, 1990:4) declares that a tenured faculty member "should be terminated only for adequate cause, except in cases of retirement for age or under extraordinary circumstances because of financial exigencies." The concept of tenure is not unique to higher education. For example, most precollege public education in the United States is carried out by teachers who receive tenure after a 1- to 3-year probationary period. Other government workers also usually have security of employment, often labeled tenure. Even some private companies give additional protection against layoffs to employees with long service. What sets tenure in higher education apart is the emphasis on job security in order to preserve intellectual freedom. Congress recognized that the special nature of the tenure contract could create special issues for legislation affecting employment in higher education. Although there is nothing in the congressional committee report explaining the exemption for tenured faculty or the request for an independent study, Senate debate on the ADEA amendments noted the potential for

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education conflict between age discrimination policy and certain higher education interests (Congressional Record, October 16, 1986:S16852-S16856): Mr. Metzenbaum: . . . At present, the case for a permanent exemption [of public safety employees and tenured faculty] has not been made. I, for one, am not certain that such a case can be made. Mr. Heinz: . . . Special concerns about . . . the tenure system at colleges and universities have been raised. Mr. Moynihan: . . . I must note, however, that I am troubled by the application of this change to the unique situation of tenured faculty members at colleges and universities. In order for these institutions to remain effective centers of teaching and scholarship, they must have a balance of old and new faculty. Hence, universities must ensure that older faculty members retire at an appropriate age, not simply to "make room" for younger faculty, but to maintain a contemporary, innovative and creative atmosphere where students can obtain the fullest education. . . . Unfortunately, I am not at all certain that this bill adequately takes into account the history of academia since the late 1950's. As a result of vast expansion in the number of individuals pursuing careers in academia at this time, there is now a bulge of faculty members who will not be retiring before the end of this century—even if they retire at the current mandatory age of 70. This is certainly not to criticize in any way these undoubtedly qualified faculty members. But there does appear to be a severe shortage of teaching positions available for today's scholars. And the situation at this time is such that most new faculty openings occur as a result of retirement. We should be very careful, I think, about eliminating the retirement age altogether, unless we can be sure that the Nation's education will not suffer as a result. Therefore, I note that the legislation before us today provides a temporary exemption, for 7 years, of tenured faculty. . . . I would have preferred an even longer period—12 or 15 years—but note that the House inexplicably chose not to provide any exemption. Importantly, during the 7-year period, the bill calls upon the NAS to appoint . . . a nine member Commission to study the impact of the change. . . . This study will be due in 5 years, allowing the Congress to adequately review the effects of this bill on academic committees, and make the appropriate changes in order to protect the vital national resource embodied in education. Mr. Hatch: . . . This bill contains an effective compromise involving public safety officials and tenured university faculty . . . [T]his [NAS] report . . . will help determine whether further amendments will be necessary in order to maintain the delicate balance between the right of every individual to be judged on the basis of his or her skill and experience and the interests of the general public. . . . Efforts to accommodate antidiscrimination policies with the interests of higher education did not begin with passage of the 1986 amendments. Since the early 1960s, the federal government had taken a series of steps to extend

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education protection against age discrimination to workers in an increasing number of employment sectors. At the same time, Congress made repeated exceptions to this general trend in response to concerns that abolishing mandatory retirement for tenured professors could harm higher education. Age Discrimination in Employment Act and Its Amendments Federal action to remove the mandatory retirement age for tenured faculty began with the 1961 White House Conference on Aging (1961:155), which recommended "steps to prevent mandatory, compulsory retirement at an arbitrary age" for all workers. In 1967, after several years in which legislation embodying this principle was introduced in Congress but not passed, President Lyndon Johnson proposed and Congress passed the Age Discrimination in Employment Act, protecting some private-sector workers from discrimination in hiring and retirement practices. The 1967 act made age discrimination illegal. According to historical accounts, it drew little attention from the higher education community or from most other major employee and employer groups, perhaps because it (1) set 65 as the minimum mandatory retirement age, thereby adopting what was common practice in higher education and many other sectors; (2) did not cover employees at public institutions; and (3) allowed private institutions that provide an employee pension plan meeting certain Internal Revenue Service (IRS) standards to require retirement before age 65 (see Pratt, 1989:15–19). Largely in response to the efforts of the American Association of Retired Persons (AARP) and the National Retired Teachers Association (NRTA), Congress extended ADEA protection in 1974 to cover employees of state and federal governments and in 1975 to cover employees of all federally assisted organizations—including most private colleges and universities (Pratt, 1989:17). The amendments did not eliminate the exemption for institutions with qualified pension plans, and they also retained 65 as the allowable mandatory retirement age. In 1977, with active support from the AARP and the NRTA, Representative Claude Pepper proposed legislation that would: raise the minimum mandatory retirement age to 70 for private-sector, state, and local government workers; eliminate the mandatory retirement age for federal workers; and eliminate the exemption in the original act that allows mandatory retirement before age 65 for employees covered by an IRS-qualified pension plan. A bill embodying these elements moved swiftly through Congress. Near the end of the legislative process, higher education groups developed a

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education variety of positions on the proposed changes. Some groups advised their members to support a permanent or temporary exemption for faculty members on the grounds that academic tenure is different from employment practices in businesses and other organizations subject to the proposed changes in the ADEA (Pratt, 1989:21). In contrast, other groups supported mandatory retirement in principle as a way to ensure a continuing stream of job openings for all workers and rejected granting special status on the matter to higher education. Most higher education groups based their positions on one or more of the following justifications: The high proportion of tenured faculty, owing to the large number of faculty hired in the 1950s and 1960s, would be increased further by legislation allowing continued employment until age 70. An undersupply of job openings for able young faculty would be further reduced as older faculty members continued to work. The limited number of job openings would also stymie affirmative action on behalf of minorities and women. Many academic administrators and faculty feared that "uncapping" would lead to more frequent and costly performance evaluations and to dismissal of tenured professors, thereby threatening faculty tenure protections. According to Pratt (1989), members of Congress, including those with experience in higher education such as Senators Daniel Moynihan and S. I. Hayakawa, were most concerned by the first and fourth points. Based on these arguments, Senator John Chafee submitted an amendment to the bill that would permit colleges and universities to maintain mandatory retirement at age 65 for tenured faculty. Senate debate on the bill in the fall of 1977 focused entirely on the proposed faculty exemption, sounding significant themes that would arise again in connection with the 1986 ADEA amendments. Some Senators invoked civil rights as a basis for rejecting the special exemption for faculty; other Senators supported the exemption on the grounds that it would provide continued employment opportunities for younger faculty and that it would obviate the difficult task of developing improved performance evaluation procedures in higher education. Although the Senate ultimately adopted the Chafee amendment, the House and Senate conference committee decided to make the exemption for higher education temporary, expiring July 1, 1982. Congress also responded to more widespread concern about the impact that changing mandatory retirement rules "would have on the ability of employers to assure promotional opportunities for younger workers" (U.S. Senate, 1978:510) On the grounds that private firms and other organizations benefit from regular turnover in top leadership positions, Congress accepted Senator Claiborne Pell's proposed amendment to create a perma-

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education nent exemption permitting mandatory retirement at age 65 for highly compensated executives and high-level policy makers who are eligible for at least $44,000 in annual pension income (ADEA, 1986, Section 12(c)(1)). Congress and the courts have restricted this exemption to an extremely small number of positions in an organization. Raising the mandatory retirement ''cap'' from 65 to 70 represented a significant change for higher education. At that time two-thirds of the tenured faculty in the United States were employed at colleges and universities with a mandatory retirement age of less than 70 (Holden and Hansen, 1989:36). Between the bill's passage in 1978 and the end of the temporary exemption in 1982, a number of states and individual colleges and universities raised their mandatory retirement ages from 65 to 70. By 1982 there was little impetus for continuing the age 65 cap, and the exemption was allowed to lapse. Following passage of the 1978 amendments, Representative Claude Pepper and various groups continued to lobby for complete elimination of mandatory retirement for all employees in United States, including tenured faculty. Pepper and Senator John Heinz submitted bills embodying this objective in 1982 and again in 1984, but serious support for further amending the ADEA came in 1985, largely from public-safety officers and the U.S. Chamber of Commerce (Pratt, 1989:26). These two groups, along with groups representing older Americans principally, the AARP and teachers (the American Federation of Teachers [AFT] and the National Education Association [NEA]), urged Pepper and Heinz to resubmit their legislation eliminating the mandatory retirement. Once again, a number of education groups opposed the legislation. They raised concerns that the large number of faculty hired in the 1960s would not reach retirement age until the late 1990s and that any significant increase in retirement age in this group would diminish the number of openings in academia for younger scholars. Other education groups opposed the legislation because they believed that opportunities for all younger workers, not only professors, would be affected by uncapping. Given the disparity of views among higher education groups and other special interest groups, as well as Pepper's strong advocacy for extending civil rights to all Americans over age 70, Congress ended mandatory retirement but granted temporary exemptions—until January 1, 1994—for tenured professors, fire fighters, and police officers. The 1986 amendments also retained the permanent exemptions for highly compensated executives and high-level policy makers. After the passage of the 1986 amendments, some higher education groups, college and university administrators, and faculty expressed alarm at the prospect of a significant number of faculty deferring retirement, possibly for many years. They continued to raise concerns about decreased opportu-

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education nities for younger faculty and about possible threats to tenure. They also warned of a loss of collegiality likely to result from increased attempts to identify and dismiss nonperforming faculty and of the increased cost of salaries and benefits or retirement incentive programs for higher numbers of senior faculty members (Heller, 1986; Mangan, 1987). A small number of groups and individuals suggested that problems might be more acute at some or all research universities, which face high scientific and medical research costs and have low faculty turnover. THE COMMITTEE'S STUDY: SCOPE AND ISSUES Traditionally, tenure in higher education has offered employment security until a mandatory retirement age, and most colleges and universities have had the choice of allowing individual faculty members to stay beyond that age. The elimination of mandatory retirement transfers that choice from colleges and universities to individual faculty members. Therefore, individual faculty members would gain additional options in choosing a retirement age if mandatory retirement were eliminated. Although there is much to be said on both sides of the issue, the Committee on Mandatory Retirement in Higher Education was not asked to rethink the rights and wrongs of age-based retirement, which until recently was the prevailing norm. One can argue that mandatory retirement is an impersonal, dignified way to end employment without having to prove deficient performance and that an institution's need for new people can often be considered more important than an individual's desire for a few more years of employment. In weighing these factors against the desire of individuals to be judged for what they can do, not for their age, Congress has clearly decided against age-based retirement for almost all U.S. institutions and for almost all Americans. In a few instances, Congress has recognized special circumstances, such as the permanent exemption retaining mandatory retirement for a small number of highly compensated executives and high-level policy makers (ADEA, Section 12(c)(1)). The committee's central task was to establish whether or not the special circumstances of tenured faculty in higher education justify an exception to the national policy prohibiting age discrimination in employment. The committee's task was complicated by its scope. We were asked to assess the effects of removing mandatory retirement, not with respect to faculty at few colleges and universities with similar characteristics, but with respect to faculty at some 3,200 institutions across the United States. These institutions range from those that emphasize undergraduate teaching to those that stress research and the training of future scholars; from community colleges to a large array of schools of engineering, medicine, law, religion,

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education and other specialized subjects. Some of these institutions are well endowed, and some are poor; some are growing rapidly, and some are barely surviving. Thus, the employment conditions of faculty vary widely, even at institutions of similar purpose, depending on the institution's financial conditions, whether it is public or private, and other factors. The committee's task was complicated further by the need to evaluate the effects of something that had not yet occurred. There are few opportunities to study faculty retirement behavior and institutional responses in the absence of mandatory retirement. Most of the states that have eliminated mandatory retirement have done so within the past few years, so there is little experience to observe. Turning to possible cross-national comparisons, there is also little to draw on because most countries have legislatively or administratively defined a mandatory retirement age: for example, the Soviet Union recently imposed a mandatory retirement age for some scientists, and Canada's highest court recently ruled that higher education in that country is still subject to mandatory retirement. Therefore, the committee was being asked to assess the behavior, under new circumstances and at a future date, of nearly 300,000 current tenured faculty as well as an unknown number of future faculty members. In sum, the committee's task involves complex human issues that do not admit of simple resolution. The Committee's Activities Although the committee could not avoid the exercise of its judgment in a matter of this complexity, we were determined to base such judgment on as much relevant data as we could obtain. The committee thus carried out a variety of activities in addition to its regular meetings and discussions (see Appendix A for a complete description of the committee's data-gathering and analysis activities). We invited groups interested in higher education retirement policy to provide their views and insights to the committee. The groups were those named by Congress in mandating the committee's study: the Association of American Universities, the American Council on Education, and the National Association of State Universities and Land Grant Colleges, which represent colleges and universities; the American Association of University Professors, the American Federation of Teachers and the National Education Association, which represent faculty; and the American Association of Retired Persons. As a way of obtaining a range of institutional and faculty views on the issues, the committee wrote to the presidents and heads of faculty senates of 358 colleges and universities selected as a representative sample of the various types of higher education institutions (216 of the sample institu-

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education tions had a faculty senate or equivalent organization). The letter asked for their anonymous comments on a list of issues pertaining to mandatory retirement in higher education and invited institutions to raise any other relevant issues. Both sets of letters produced much confirming material and some fresh insight into the nature of the problem, and they provided a sweep of the views represented by the various institutions and their faculties. We conducted 17 in-depth case studies of individual institutions in order to understand the context in which faculty make retirement decisions and institutions set policies affecting those decisions. Although 17 institutions cannot represent all U.S. colleges and universities, the committee's cases represented a range of colleges and universities. These studies included extensive discussions with faculty and administrators. The committee sponsored three workshops involving presentations by knowledgeable and interested individuals and groups, commissioned five papers by experts in specific fields, and reviewed literature, including recently completed and ongoing studies of faculty retirement behavior, in order to marshall all available findings and information relevant to faculty retirement issues. The committee collected retirement data for the past 5–10 years from selected institutions, including all of our case study colleges and universities, supplemented by special requests to other institutions. We also examined the major national faculty data bases maintained by the U.S. Department of Education, the Higher Education Research Institute, and the National Research Council. These activities, as well as our seven meetings over a period of 15 months, enabled the committee to develop a set of issues and questions particularly relevant to understanding the effects of uncapping. Committee members also drew on their extensive experience as faculty, administrators, and trustees at a broad range of colleges and universities. Issues and Report Structure Faculty Retirement Behavior and Turnover How many tenured faculty are likely to continue working past age 70 if given the chance? In Chapter 2 we examine the pivotal question of how much the behavior of faculty would change as a result of uncapping. Administrators and faculty members responding to our letters and in case study interviews were concerned that paying higher-salaried professors for longer periods of time could create financial problems and that a generally older faculty and lower hiring rates for new faculty could threaten the vitality of teaching and research at their institutions.

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education A simple hypothetical case illustrates concerns about costs and turnover. Costs could increase and turnover could decrease if allowing faculty to continue to work past age 70 leads to an increase in the average faculty retirement age. An increase in faculty working past age 70 balanced by increased retirements at earlier ages would have less effect. For example, assume that the average length of service for a faculty member is roughly 35 years and that a college or university generally can hire new faculty only when a position becomes vacant through retirement (i.e., institutions cannot afford to increase the size of the faculty). Under these circumstances, if the length of professorial service rose by 1 year to 36 years, an increase of a little less than 3 percent, there would be a corresponding 3 percent decrease in the number of positions opening up for new faculty. If the institution continued to hire (i.e., increased faculty size) then salary, benefit, and support costs for faculty would rise. This simplified model leaves out transition effects and the relatively higher cost of older faculty members, but it indicates the relationship between a shift in average retirement age and an institution's ability to hire. Colleges and universities hire new faculty as a way to bring in new ideas and research specialties. Some institutions that want to remain current in research fields believe they could be adversely affected by later faculty retirements and the resulting lower turnover. Two other perceived demographic issues in higher education could interact with the potential effects of eliminating mandatory retirement. A number of respondents to our letter inquiry mentioned a possible faculty age "bulge" created by increased faculty hiring in response to student enrollment growth from the late 1950s through the early 1970s. One issue is the possible existence of disproportionate numbers of faculty at certain ages, either overall or by type of institution or discipline, as well as what effect, if any, this might have on faculty retirement behavior. Another issue is a possible faculty shortage arising during the next 15 years as the number of new Ph.D.s fails to keep pace with projected increases in student enrollments and eventual faculty retirements (Bowen and Sosa, 1989; Atkinson, 1990). To address these issues, in Chapter 2 we examine data on the current national faculty age structure and changes in age distribution over time, as well as projections of faculty supply and demand and the implications for faculty retirement behavior and policies. We also review data and studies that compare recent faculty retirement behavior at states and institutions that have already eliminated mandatory retirement and on changes in national faculty retirement behavior in response to the retirement age between 1978 and 1982. How might faculty retirement patterns vary among different fields and colleges and universities? Faculty could be more likely to continue work

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education ing past age 70 in certain fields or at certain types of institutions. Hence, the effects of eliminating mandatory retirement could be more severe in these fields and at those institutions. Administrators and faculty at research universities, in particular, expressed concern in their letters and in discussions during site visits and case studies that faculty at their universities would work past age 70 and that this could pose severe problems for the institution. In order to estimate potential variations in faculty retirement behavior if mandatory retirement were eliminated, in Chapter 2 we examine faculty retirement data disaggregated by type of institution and field. We also evaluate research studies of factors—such as quality of students, research emphasis, and generosity of retirement programs—that could explain any observed differences. Finally, in order to examine the effects of increases in faculty retirement ages on faculty hiring and salary costs, we adapt several models designed to simulate faculty turnover, hiring, and costs with faculty age and retirement data from a few institutions. Tenure, Performance Evaluation, and Aging How would increased numbers of faculty over age 70 affect the quality of teaching and research? Estimates of the proportion of faculty likely to continue working past age 70 provide information as to whether older faculty will be present in colleges and universities, but they do not provide a basis for determining whether that presence is harmful or helpful to colleagues and to institutions. In Chapter 3 we address concerns about the impact of ending mandatory retirement on research, teaching, and service in higher education. In their responses to the committee's letters, administrators and faculty expressed considerable fear that faculty working into their eighth decade could suffer declines in performance that would lower the quality of some colleges and universities and the overall quality of higher education. Administrators and faculty members at research universities were particularly concerned about the effects on basic research of an increase in the proportion of older faculty members. The committee reviews available data on the relationship between performance and aging in higher education, including studies of aging and teaching and research effectiveness. What are the implications for tenure? In Chapter 3 we also examine whether tenure could shelter incompetent professors from dismissal proceedings or from attempts to improve faculty performance. Faculty and administrators, in response to our letters and in our case study discussions, indicated that they have looked to mandatory retirement as a way of removing colleagues whose performance no longer meets institutional standards. Some of them believe that ending mandatory retirement would threaten tenure through pressure on institutions to identify and remove declining

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education performers among the faculty who can no longer be expected to retire by a fixed date. Some even proposed abolishing tenure altogether in response to ending mandatory retirement (see Mangan, 1987:A13). The committee carefully considers the relationship between tenure and mandatory retirement, including questions of dismissal and performance evaluation. Would colleges and universities need to reassess the use of performance evaluation in response to the end of mandatory retirement? A number of observers have proposed strengthening faculty performance evaluation or making its use more widespread in response to ending mandatory retirement. Improving the performance of or weeding out nonperforming faculty, if it can be done, is something that has always been desirable, with or without the age cap and irrespective of the age of any faculty member. The question for performance evaluation, as for tenure, is how far it is possible to change existing practices while still maintaining the collegial nature of academic institutions and the individual academic freedom of faculty. In Chapter 3 we evaluate the literature on performance evaluation in higher education and other sectors, including approaches to performance evaluation and uses of performance evaluation to maintain or improve faculty and institutional quality. Financial and Other Factors Affecting Retirement How can faculty retirement policies help institutions and individuals meet the consequences of eliminating removing the mandatory retirement ? The committee reviewed college and university retirement policies as well as current faculty retirement patterns. We believe that institutional policies affect faculty retirement patterns, and changes in those policies could provide a basis for responding to the elimination of mandatory retirement. Thus, we cannot estimate the costs and benefits of the potential elimination of mandatory retirement without considering whether policies—both institutional and congressional—exist that would mitigate the potential adverse effects of uncapping. Institutions may need to change a range of policies that affect individual retirement decisions. People are not as likely to retire if they are financially unable to do so, if they fear inflation or overwhelming medical expenses, or if they can gain financially by not retiring. Both faculty and administrators worry that some pension, tax, and other financial policies either create disincentives to retirement or reward faculty who postpone retirement. In Chapter 4 the committee analyzes programs and policies that influence faculty retirement behavior. We examine the effectiveness of pension systems, health insurance, retirement planning assistance, and institutional

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Ending Mandatory Retirement for Tenured Faculty: The Consequences for Higher Education planning and cost-effective ways to improve retirement policies and change the pattern of rewards and disincentives in individual retirement decisions. What other factors affect retirement decisions? There are dimensions to the question of retirement other than financial issues. Many older faculty wish to continue some level of engagement with their subject matter or with their colleagues or students. Some want part-time employment, the continued use of office or laboratory space, or secretarial or computer support. In Chapter 4 we explore the range of possible activities for retired or partially retired faculty, their attractiveness, and their costs. Retirement Incentive Programs How can colleges and universities continue hiring new faculty and supporting new fields? In Chapter 5 the committee focuses on voluntary retirement incentive programs as a mechanism specifically designed to encourage faculty turnover. We consider the range of programs that colleges and universities, states, and the federal government might use to enable institutions to hire more new faculty if mandatory retirement is eliminated. We consider the cost of retirement incentive programs used in higher education, the legal issues of offering retirement incentives, and the literature on retirement incentive programs, and we make recommendations for colleges and universities considering such programs. We also note ways in which Congress could assist colleges and universities that want to use voluntary retirement incentive programs as a way of increasing both faculty turnover and the ability to hire new faculty. Eliminating Mandatory Retirement Lastly, in Chapter 6 the committee summarizes its major conclusions about the potential impact of eliminating mandatory retirement for tenured faculty. On the basis of these conclusions, the committee makes its recommendation to Congress on whether to retain the special exemption in ADEA for higher education. The committee also offers recommendations to Congress, to institutions of higher education, to pension and insurance plan providers, and to faculty on specific policies that can help to maintain and improve the quality of basic research and teaching in higher education while protecting the rights of older workers.

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