Proposal for a Retirement Incentives Plan for Loyola University New Orleans



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Proposal for a Retirement Incentives Plan for Loyola University New Orleans
Loyola AAUP Chapter
adopted September 23, 2003

RATIONALE:
Current Status: Fr. Knoth's statement presented to the Senate at the September 2002 meeting establishes the following:
a) We have no formal policy on arrangements made with faculty with respect to any retirement incentive, other than that each case be decided ad hoc.

b) Sole authority for all such ad hoc agreements lies in the President's hands.

c) All arrangements in the Voluntary Severance Plan of 1998 were "one time only" exceptions, and as originally stipulated in that offer, establish no precedent for any subsequent analogous arrangement.

d) All arrangements subsequent to the Voluntary Severance Plan of 1998 are legally sanctioned as confidential, thereby precluding any argument by analogies to precedents set in those instances.



If we take the above points as characterizing the present situation, we are in position to establish a variety of quite distinct arguments.
First we might emphasize what could be called a Moral Argument: Points a) - d) above entail that in all future ad hoc negotiations with tenured faculty seeking an incentive for resigning their tenure, there are no instances to compare a voluntary severance offer made to one faculty member with what has been offered to another faculty member in an analogous position. Knowledge of any previous ad hoc arrangement is ruled out ab initio. In such a situation, considerations of whether an offer is "fair" or "unfair" are rendered impossible; however, the very notion of distributive justice is predicated on a concept of fair distribution. Thus, a policy that makes the determination of "fairness" impossible is in conflict with the demands of just distribution. Furthermore, by our Character and Commitment Statement, Loyola is committed to the ideal of distributive justice. Therefore, Loyola's current ad hoc approach to retirement incentives is fundamentally at odds with the values to which Loyola is explicitly committed.
Next, there is what might be called the Academic Argument: The only scale on which Loyola's achievement truly can be measured is the quality of the education which we provide our students and the quality of our faculty's contribution to human learning and creative achievement. Thus a vigorous and active faculty is the single most essential requirement to Loyola's achieving its strategic academic goals. As of last November, Human Resources data revealed that 42.3% of full time faculty are over 55 years of age. It is therefore reasonable to assume that increasing numbers of senior faculty will be interested in the prospect of negotiating retirement arrangements with the university. While it is of course true that experience as a teacher and scholar/artist counts for a great deal, as a generalizationwhich admits exceptions, of courseit is reasonable to presume that faculty who perceive themselves as approaching retirement will not on average be as productive as younger persons in their field, anxious to make their way. Senior faculty are more expensive than junior faculty, yet ironically junior faculty are more likely to be active than senior. Thus in the interest of keeping its faculty as vigorous as possible, it is in Loyola's academic interest to provide incentives to faculty who feel that they are ready to retire to do so. The current ad hoc systemin which no precedents are applicable and all decisions confidentialis more likely to discourage potential retirees and induce the feeling that one is not being dealt with fairly. An objective, open policy assuring that each faculty member who enters into a retirement agreement with the university is being treated fairly, is more likely to induce interest in retirement and thereby increase the youthful vigor of its faculty.
Third, we have an obvious Argument by Analogy: Many other institutions comparable to Loyola have confronted an increasing concern with retirement incentive issues, so much so that the Committee on Retirement of the AAUP was moved to conduct a survey "to obtain information on … the existence and nature of retirement incentive programs and phased retirement programs for tenured faculty members." [see http://www.aaup.org/issues/retirement/retrpt.htm] The results of that survey were designed "to provide comparative information on retirement programs that will help institutions learn how other academic institutions are responding to retirement related issues and assist them and their faculty members in evaluating and improving their own programs." Therefore, it would behoove Loyola, as a comparable institution, to investigate making use of this comparative information for "evaluating and improving" our current status with respect to retirement incentive issues.
Finally, we should advance the Economic Argument: Because of the compensation differential between senior and junior faculty, the economic savings resulting from replacing senior with junior faculty can be made to provide the funding to offer reasonable incentives to senior faculty to retire and pay for that incentive within less than five years. After ten years the net financial savings to the university will, in model cases, exceed a quarter of a million dollars per retirement. (To demonstrate this effect, see Tables I and II below as providing two case models of possible retirement programs.)



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