Planning For Retirement
An ASEF Perspective by Dr. Martin Pring, Ph.D.
Introduction and Overview
There is no required retirement age. Instead your decision when and if to retire will be a very important and personal one, depending on resources, family obligations and plans, continuing academic ambitions, benefits available and many other factors. These Web pages and their links provide a qualitative summary of the benefits and facilities available. Many details and dollar figures for benefits and payments are omitted, since they may change and some may vary between individuals. You should stay informed about all of your benefits, including retirement, and take advantage of the resources available to help you plan. . The primary resource for planning the details of your retirement arrangement is Ms. Hilary Lopez, Senior Benefits Specialist in Human Resources (898-1327, lopez@hr.upenn.edu). A resource for faculty employment policies in general, including the policies and processes surrounding the pre-retirement incentive programs, is Ms. Vicki Mulhern, Executive Director, Faculty Affairs and Professional Development in the School (898-6923, vmulhern@mail.med.upenn.edu). Since notice to your Department Chair and the Dean of retirement or participation in one of these programs generally requires one year advance notice, you should do this no later than within a year before the effective date you choose.
A regular turnover of faculty positions is in the University’s interest, with retirees freeing resources for recruitment. However it is also in the University’s interest that retirees who wish should continue to participate in and contribute to its intellectual, academic, social and recreational programs. Its benefits and programs are designed, within legal limits, to promote these goals.
Continued medical benefits are currently available to retirees who satisfy length of service and age conditions. Standing faculty with sufficient length of service may take a severance pay arrangement within an age window. They may be eligible to phase in retirement by a reduction in duties for a specified time period. Financial planning advice is available and all faculty are strongly encouraged to take advantage of the resources provided to them. The rights and privileges of retired faculty are generally the same as those prior to retirement. Use of a title denoting emeritus status is optional; however, the University will record the status of the retired faculty as emeritus in order to identify retired faculty and to maintain contact for benefits purposes and other information.
Health Benefits
Retirees who meet the age and length of service requirements at the time of retirement are currently eligible for continued medical benefits. A description of the eligibility criteria and benefits is contained in the Retiree Health Plan Summary Plan Description. This is the official document describing the plan. A more accessible summary is available in the Section,
"Special Situations Affecting Your Medical, Dental And Vision Benefits … If you retire of the Health and Welfare Summary Plan Description for current employees."
After reading the Introduction and Disclaimer search for (click the binocular icon in Acrobat) “When you retire” to go to the relevant section. After reading this be sure to space down to the Section, "Your Right To Continue Coverage – COBRA" for information on limited extension of vision and dental benefits, and of medical benefits for those who do not meet the eligibility criteria for extended benefits. While still in this document you can search for “Affecting Your Group Life Insurance” to learn about a minimal retiree life insurance benefit.
Retirement Incentive Programs
The Faculty Income Allowance Plan (FIAP) Standing faculty with sufficient length of service may be eligible to take a severance pay arrangement called The Faculty Income Allowance Plan (FIAP) within an age window and which will be taken immediately before and contingent on regular retirement. The benefit amount is paid over two years, during which nearly all pre-retirement benefits are continued. Contributions to the retirement plans are discontinued. The Summary Plan Description can be accessed on http://www.upenn.edu/almanac/volumes/v51/n33/OR-fiap.html. Descriptions of FIAP contain the term “academic base salary”. While for many faculty this may be just their salary, for those in administrative positions and many in clinical departments it has a different meaning. Academic base salary generally includes that part of the salary paid for faculty duties from the Department University budget and any contribution from grants administered by the University. It does not include administrative stipends or clinical practice income from such sources as CPUP or the VA. Those in any doubt about their academic base salary should seek clarification from their departments and the Office of Faculty Affairs and Professional Development.
Reduction in Duties
Faculty may elect to take a reduction in duties of up to 50% for a period of no longer than 6 years prior to retirement. This option is described briefly in the Handbook for Faculty and Academic Administrators, Section II.E.2, Faculty Leaves of Absence (space down to Reduction in Duties). Eligibility for benefits continues during this time period.
Financial Planning
Retirement Education Seminars
Human Resources arranges regular retirement education seminars given by representatives of TIAA-CREF and Vanguard and others at the University. That entitled Retirement Distribution Flexibilities is likely to be of particular interest to those approaching retirement. A schedule of these is posted during the academic year and is also included in regular fliers sent by Human Resources and email notifications from the School of Medicine.
One-on-One Counseling
Human Resources also arranges for TIAA-CREF and Vanguard consultants to be on campus on certain dates for one-on-one counseling by appointment. These dates are also announced in regular fliers, personal mailings and email announcements. Schedules can also be found and appointments made via the TIAA-CREF and Vanguard Web sites.
Other Resources
A list of other financial planning links is also provided by Human Resources. Information on Social Security payments can be obtained from the Social Security Administration. You should note that, though they may give you information on the taxability of various offerings, you should consult a personal tax advisor or certified financial planner for this purpose.
Request for Feedback
ASEF is interested in your feedback and experience with the various offerings and if you have suggestions for additional programs or resources. We encourage you to contact us via e-mail for information, suggestions, or to arrange a meeting.
Rights and Privileges
In general the rights and privileges and access to University services and facilities are the same for retirees as for current faculty. They are summarized in the Handbook for Faculty and Academic Administrators, Section II.E.9 , Retirement.
Access to many common University facilities, such as the libraries and gymnasia, requires a current PennCard, and a number of services are linked to the PennCard Database. Although the PennCard Web site says that retirees should obtain an Emeritus PennCard, in practice active retirees have found that they can continue to use and renew their existing PennCards. In this context you should ensure that when you retire your Department Personnel/Business Administrator changes your status in the Personnel/Payroll Database to, in HR jargon, retired with an emeritus title rather than terminated. If you find that your PennCard has been expired you should check that this was correctly done and follow the instructions on the PennCard Web site to get another one.
The provision of facilities such as office space and departmental services after retirement will be subject to availability and must be negotiated with your Department Chair. If these are important to you or bear on your decision to retire, it is very strongly recommended that, for the protection of both parties, you secure a commitment to them in writing prior to executing any agreement to retire.
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