Tenured Faculty Early Retirement Incentive Program

Effective February 21, 2014

Eligibility

To qualify an individual must be actively employed in a tenured faculty position at Williams, and:

• have a half-time (0.5 FTE) appointment or greater,
• be at least age 58 and younger than 69 as of the first year of full or phased retirement,¹ and
• have at least 5 years of cumulative service at Williams.

This program is authorized by a provision in the Federal Age Discrimination in Employment Act applicable only to tenure track academic faculty, and therefore non-tenure track academic and athletic faculty are not eligible to participate in this program. Non-eligible faculty should consult with the Dean of the Faculty when considering their retirement options.

Options

The College offers two retirement options for eligible faculty: A) full retirement with an incentive payment; or B) phased retirement at reduced salary and teaching load. These options are described more fully below.

Option A: Full Retirement

Opting for full retirement gives a participating faculty member a sizeable incentive payment at the end of their Williams career. The incentive payment is based on a percent of the retiree’s appointment-adjusted² terminal institutional base salary³, according to the schedule below.

This retirement program makes no provision for a full retirement payment for faculty members who are 69 or older.

The full retirement option does not provide additional allowances for accumulated sabbatical credit. As stated in the Faculty Handbook (Section II.O), “The College’s sabbatical leave program is intended to provide opportunities for continued professional growth for the benefit of both the faculty member and the institution. Faculty members are therefore normally expected to return to the College for at least one year after a mini-sabbatical and for at least two years after a full sabbatical.” Thus “terminal sabbaticals” are not normally granted and cannot be taken immediately preceding a full retirement under the terms of this incentive program.

Option B: Phased Retirement

Phased retirement allows a faculty member to reduce their teaching to a one-half load for a maximum of three years with retirement occurring at the end of that period. Three years is a maximum; shorter periods of phasing are allowed. The exact distribution of courses over the period of phased retirement must be negotiated ahead of time with the Dean of the Faculty and the retiree’s Chair or unit supervisor and will be specified in the retirement contract.

A participating faculty member’s salary during the period of phasing is paid as a percentage of their appointment-adjusted institutional base salary according to the schedule below. The percentage is “locked in” for the entire phasing term, although normal formulaic raises will continue to apply to the institutional base salary during that time.

This retirement program makes no provision for a premium-paid phased option for faculty members who are 69 or older.

Professors in phasing arrangements do not earn credit toward a future sabbatical or paid leave. Faculty with accumulated teaching credit towards a sabbatical should consult with the Dean of the Faculty prior to phasing. Pre-existing credit can be used immediately prior to the beginning of the phased period. Alternatively, pre-existing credit toward one mini-sabbatical can be used during the first or second years of the phased period to further reduce the teaching load by two courses. Mini-sabbaticals taken during the period of phasing are paid at the age adjusted rate.

Initial Open Enrollment Period

(Closed as of August 27, 2014)

For the period from February 21, 2014 to August 27, 2014 all tenured faculty who meet the appointment, age and service requirements set out under “Eligibility” above can elect to receive the maximum payment (for either full or phased retirement) listed in the tables above regardless of their then-current age. This special age-neutral six month enrollment period is legally mandated for new programs.

Timing

A professor wishing to retire under this policy should notify the Dean of the Faculty of their intent as early as possible, and no later than January 31 of the retirement year. This deadline applies either for full retirement or for a phased option. The decision to retire is not binding on the professor until a formal retirement agreement has been signed by the professor and the Dean of the Faculty. The retirement contract, which will include a waiver of legal claims among other terms, will be legally binding on both the professor and the college. 

The retirement period begins on July 1 of the year specified in the retirement contract.⁴  So, a professor choosing full retirement will fully retire on June 30th of the specified year. A professor choosing a three-year phased option will begin the phasing period in the specified year and will retire on June 30 three years later.

Special Retiree Health Insurance Benefit (for faculty who retire through this plan)

Retirees under the age of 65 can still participate in the Williams College health insurance plan as individuals at the same subsidized rate that applies to active faculty members. In addition, the college has created a new benefit for those over the age of 65, and to support family insurance needs as well. This enhanced health insurance benefit plan for participants in the Tenured Faculty Early Retirement Incentive Program is described in greater detail at this link.⁵

Other Benefits

Faculty choosing the phased retirement option will remain active employees during the period of their phase and thus will participate in any employee benefits that are in effect during the period of their phase. Only benefits that are pegged to their actual paid salary would be affected by the phase (e.g., the college’s TIAA pension plan contributions).

Note that most Williams benefits and policies applying to faculty retirees remain unchanged. For example, the tuition grant benefit has been available and will remain available to retirees under this new plan. Another consistency is that this retirement program does not change the terms of the college mortgage benefit, i.e., the balance of the mortgage comes due upon full retirement.

Other frequently asked questions about benefits in retirement are addressed online at this link: http://hr.williams.edu/benefits/retirement/faq/.

Tax considerations

All salary income and incentive payments are taxable income for both Federal and State income tax purposes.

For those choosing the full retirement option, the incentive payment is distributed in two equal halves over two tax years. The first half of the incentive payment is distributed in the month immediately following the retirement date. The second half is paid the following January. It is not possible to spread the payment out further, nor to receive it in a single lump sum, and it cannot be deposited into the retiree’s TIAA account.

Non-negotiability

This Policy is governed by nondiscrimination and pension protection provisions of Federal and Massachusetts laws, including in particular the Age Discrimination in Employment Act and the Employee Retirement Income Security Act, which require that equity must be maintained for all participants. Therefore the elements of this plan are fixed. The eligibility, timing, compensation, and other terms cannot be changed.

Administration and Amendment

The college is the plan administrator for this policy, with full discretionary authority to administer and interpret the policy. Any claim under this policy must be submitted in writing to the college, which will respond, in writing, explaining how and when benefits will be paid, or why they will not be paid, and outlining any procedures for appeal. The claims procedure under this policy may be obtained by contacting the office of the Dean of the Faculty. The college may amend or terminate this policy at its discretion.

Other Paths to Retirement

The Dean of the Faculty is available to talk with any faculty member about retirement. Faculty considering their options should bear in mind that no financial incentives are available outside of the Tenured Faculty Early Retirement Incentive Program.

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¹ For purposes of eligibility under this policy, a faculty member’s age refers to their age on the first day of the first month in which the full or phased retirement takes effect. Typically this will be July 1. In rare circumstances it will be January 1 (see footnote 4).

² For example, a 58 year old faculty member with a 1.0 FTE (i.e., full time) appointment at the time of the retirement contract would receive the full 200% payment, whereas the same individual with a 0.50 FTE appointment would get 50% of 200% (i.e. 100%) of their Institutional Base Salary.

³ Institutional Base Salary (IBS) does NOT include chair stipends or other remuneration for additional responsibilities. Terminal IBS is set at the level of the last academic year in which the faculty member taught.

⁴ In rare cases it will be desirable for a professor to retire in December rather than June. Please consult with the Dean of the Faculty and note that the incentive level in these cases will be set according to the professor’s age as of the January 1 on which the full or phased retirement begins.

⁵ http://faculty.williams.edu/tenured-faculty-early-retirement-health-benefit-plan-2014/.

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