Monday, June 17, 2013
Shying Away from Retiring
UC retained its basic defined benefit model in part to encourage faculty renewal. Many years ago, before federal law changed, universities - including UC - had mandatory retirement ages. Once that policy was made illegal, only the defined benefit system provides an incentive to retire. Under defined benefit, the retiree can't outlive his or her savings. And long service employees essentially end up working for nothing if they continue so the system incentivizes "on time" retirement. Decisions in the future on retirement benefits need to be take account of the behavioral effects of the system.
The Inside Higher Ed article is at http://www.insidehighered.com/news/2013/06/17/data-suggest-baby-boomer-faculty-are-putting-retirement