In addition to approving a special retirement incentive program for all eligible faculty and employees (see the accompanying story for details), the Executive Committee of the Corporation has approved an additional retirement incentive for members of the faculty. In doing so, the Committee noted the need for intellectual renewal of the faculty at a time when the mandatory retirement age has disappeared and when financial pressures prohibit an increase in the overall size of the faculty.
Faculty eligible for this program must be at least age 60 by July 1, 1996, and also qualify for the more general early retirement incentive to be made available to all eligible faculty and employees in the spring of 1996. Those wishing to take advantage of this additional incentive will need to indicate their decision between March 1 and April 30, and must retire by October 1.
There are two components of the faculty plan.
The first option is available to faculty age 60 and older with 10 years of benefits-eligible service by July 1, 1996. In addition to the special retirement incentive, they are eligible to receive a cash payment equal to 1.5 times their current academic year salary.
The second option is available to faculty age 65 and older with 10 years of benefits-eligible service by July 1, 1996. They may discuss with their department head the possibility of being rehired at up to 49 percent of their time for a period of up to five years. If the department head authorizes such an arrangement, these faculty would also be eligible to receive a one-time cash payment equal to their current academic year salary, as well as the special retirement incentive available to all eligible faculty and employees. For faculty age 65 or older who are rehired, this option is intended to provide a nearly seamless transition to full retirement. (IRS regulations regarding the tax-qualified status of the retirement plan prohibit the rehiring of individuals who are below the normal retirement age, i.e., July 1 following the 65th birthday.)
Commenting on the additional faculty plan, Provost Joel Moses said that it is intended not only to help relieve financial pressures but to help assure MIT's continued intellectual vitality and leadership. He also noted that this additional faculty plan will not be funded by assets of the MIT retirement plan, and noted the need to review the overall design of the Institute's retirement plan, which was created during another era, when retirement was mandatory at age 65.
A version of this article appeared in MIT Tech Talk on December 6, 1995.