Faculty Retirement Options: Early or Phased
I am writing to remind faculty that the University of Pennsylvania has an early retirement program for faculty and a phased retirement program with a new feature this year. I am also writing to provide you with information on financial planning services available to employees.
The Faculty Income Allowance Program
A brochure on the Faculty Income Allowance Program (FIAP) is posted here for your review. This program is available to tenured members of the standing faculty and senior members of the Clinician Educator faculty (associate and full professor) who are at least age 62 but not yet age 69 and who have served at least 15 years in full-time service at the University at the time of their retirement. In addition, tenured faculty members and senior clinician-educators who will not have completed fifteen years of full-time service at the University until after reaching age 69 may retire under the terms of the program at the time they complete fifteen years of service.
The program provides an income allowance to the faculty member equal to 165% of the average academic base salary for full professors in his or her school during the year immediately preceding retirement. The allowance is paid in 24 equal monthly installments beginning the first month after retirement. The program also provides continued group term life insurance and dental insurance over the two-year period following retirement; medical insurance through the University programs with the same cost-sharing arrangement as for active faculty members until the retired faculty member reaches Medicare eligibility age; and continued dependent tuition benefits for eligible dependent children. University contributions to tax-deferred annuity will not continue after payments from the retirement income allowance program begin.
Since 1991, the University has had a Reduction in Duties policy that allows faculty to request a phased-in retirement. The language from the Handbook is also on page 6 of this issue. Reductions in anticipation of a move to emeritus status may be granted for a period not to exceed 6 years. Such reductions may be for 10%, 20%, 30%, 40%, or 50% of full duties. Such reductions are accompanied by a proportional reduction in salary and in those benefits that are salary-based. Beginning in academic year 1999-2000, faculty who formally enroll in a phased retirement option and who are at least 59 1/2 years of age will be able to begin to withdraw funds from their tax-deferred annuity. The amount to be withdrawn will be decided by the faculty member and the tax-deferred plan carrier. Participation in the phased retirement program does not preclude participation in the FIAP program for those who are eligible for that program.
Individual Financial Planning for Retirement
Individual financial planning for retirement is available through Vanguard (Mr. Robert Geiger, 610-669-4040); TIAA-CREF ( Mr. Lewis Burley, 215-587-8526); and American Express (Mr. Barney Carter, 1-800-220-2190). All three providers offer the first session at no cost. Thereafter the pricing of the services, payable by the faculty member, will depend on the complexity of his or her finances. Prices can be discussed during the complimentary session. More information can be obtained by accessing the Human Resources website at www.hr.upenn.edu and clicking the "Links" icon.
-- Barbara J. Lowery, Associate Provost
Almanac, Vol. 46, No. 4, September 21, 1999