Retirement Outlook
Our Challenge
The United States is on the cusp of a significant demographic change as baby boomers plan for and retire from their careers. We see concerns about retirement trends in our newspapers, public policy discussions and human resource literature. Like many large organizations, the University of Michigan will experience these trends through new retirement patterns that will require flexibility and action planning.
Flexibility suggests that we reassess our view of retirement. We must ask ourselves who has vital knowledge to be shared? Are there creative ways to retain the talents of individuals in high-demand careers beyond planned retirement? If we know we must transfer knowledge, how do we create effective systems that ensure the organization continues to benefit from our cumulative knowledge, talent and experience?
These are some of the opportunities and issues presented to us by the retirement trends of the next decade. Our challenge is to strategically lead workforce planning within our organization to ensure the talents of today’s community can fully contribute to the future of the University.
Introduction
The Staff Profile exhibits in Section 3 of the report point out that 13% of the overall staff and 26% of management are currently eligible to retire. Similarly, the faculty profile data points out that 30% of the tenured or tenure-track faculty and 16% of the primary research faculty are currently eligible to retire.
This section of the report takes a closer look at the profile of faculty and staff who will be retirement eligible through 2013 and looks at the profile of recent retirees in an attempt to begin to understand the scope and impact of an increasing retirement-eligible population on the university. Additional tables have been added that provide data on faculty eligible to retire by ethnicity as well as a table with projected overall faculty retirees through 2013. For the 2007 Human Capital Report our objective is to begin to understand the profile of retirees and to project the impact over the next 5 -10 years. Issues examined include:
- Impact on demographics and diversity of staff
- Impact on career families
- Impact on management
- Impact on university benefit cost
Historical Data 2001-2005
Exhibits 1.1 – 1.5 provide information on 2001-2006 retirees including:
Age distribution at Retirement:
| <60 | 60-62 | 63-65 | 66+ | |
|---|---|---|---|---|
| Reg. Instructional | 13% | 12% | 25% | 50% |
| Primary | 26% | 26% | 21% | 28% |
| Staff | 36% | 27% | 21% | 16% |
Age Distribution by Gender:
Regular Instructional by Gender:
| <60 | 60-62 | 63-65 | 66+ | |
|---|---|---|---|---|
| Women | 19% | 18% | 35% | 27% |
| Men | 11% | 11% | 22% | 55% |
Primary by Gender:
| <60 | 60-62 | 63-65 | 66+ | |
|---|---|---|---|---|
| Women | 31% | 38% | 13% | 19% |
| Men | 23% | 19% | 26% | 32% |
Staff by Gender:
| <60 | 60-62 | 63-65 | 66+ | |
|---|---|---|---|---|
| Women | 36% | 28% | 21% | 15% |
| Men | 37% | 24% | 20% | 18% |
Of note is the considerable difference between percentages of faculty and staff who retire under age 60 and over age 65.
- Retired under 60: 13% Faculty, 26% Primary vs. 36% Staff
- Retired at over 65: 50% Faculty, 28% Primary vs. 16% Staff
Retirement Projections through 2013
Exhibits 1.7 – 1.15 provide information on the number of current and projected eligible retirees through 2013 by career for faculty, overall staff and for managers. Additionally, data is provided to help assess the impact on potential retirements on the diversity of staff and management.
There are 3629 staff currently eligible to retire. Over the next 7 years the number of newly eligible potential staff retirees will grow from 721 in 2008 to roughly 1000 in 2013. For faculty overall, there are 1294 currently eligible to retire (through 2007) and the number of newly eligible additional potential retirees will grow from 163 in 2008 to 216 in 2013.
The majority of these individuals become retirement eligible long before they actually retire. Exhibit 1.16 provides a simplistic projection of faculty and staff retirees per year. Both show that the actual number likely to retire is significantly less than the number who become eligible. For projection purposes we looked at a forecast based on the year staff turned 62 and for faculty based on the year she/he turned 65. In both scenarios the projected number per year grows at a significant rate from 2006 – 2013. It should be noted that these projections have not been adjusted to include the faculty (412) and staff (802) who are already eligible to retire and beyond the age used for these projections.
Impact on Career Families:
- Highest Percent Eligible To Retire through 2013 – Overall Staff:
- Trades – 56%
- Facilities Operations – 55%
- Operating Engineers – 55%
- Purchasing – 50%
- Engineering & Architecture – 44%
- Highest Percent Eligible To Retire through 2013 – Management:
- Purchasing – 71%
- Engineering & Architecture – 64%
- Administration – 59%
- Healthcare Admin & Support – 58%
- Instructional Services – 58%
- Facilities Operations – 57%
- Human Resources – 55%
- Libraries & Museums – 55%
- Patient Care Services – 54%
- Lowest Percent Eligible To Retire through 2013 – Overall Staff:
- POAM – 19%
- Research – 22%
- Patient Care – 25%
- Information Technology – 29%
- Nurses – 30%
- Lowest Percent Eligible To Retire through 2013 – Management:
- Health Plan – 25%
- Institutional Advancement – 33%
- Academic & Student Services – 41%
- Finance – 45%
- Information Technology – 46%
Impact on Diversity:
- Percent Eligible To Retire through 2013 – Regular Instructional Faculty by Race:
- Asian – 25%
- Black – 45%
- Hispanic – 31%
- Native American – 19%
- White – 55%
- Percent Eligible To Retire through 2013 – Overall Staff by Race:
- Asian – 20%
- Black – 29%
- Hispanic – 21%
- Native American – 39%
- White – 35%
- Percent Eligible To Retire through 2012 – Managers by Race:
- Asian – 31%
- Black – 52%
- Hispanic – 39%
- Native American – 54%
- White – 53%
