Retirement Plan Options

In order to enable faculty members to make an easy and orderly transition to retirement, the University offers the following retirement options:

  1. General Retirement Plan and retirement bonus
  2. Incentive Faculty Retirement Plans (new plan announced February 22, 2010) 

Two versions: Version one can include a phased ½ time teaching opportunity for up to 3 years, or the faculty can retire at the end of the current term. Version 2 is a teach full-time until 70 for a bonus of one times your salary

  1. 3-Year Phased Retirement Plan
  2. 2-Year Phased Retirement Plan

These retirement programs are voluntary programs. The University can provide you with information and answer your questions about these programs to enable you to make an informed decision, but we cannot advise you to accept or decline the various retirement options. The decision is entirely up to you.

1. General Retirement Plan and Retirement Bonus

If the faculty member meets the retirement eligibility criteria, under the General Retirement Plan, they would simply retire at the end of the term agreed upon with their Chair and the Office of the Dean of the Faculty and indicated on their signed retirement agreement.

It is a great help for planning purposes, both for departments and for the University, if faculty members decide on definite retirement dates sufficiently far in advance. Recognizing this, as part of the General Retirement Plan, the University will provide a bonus to faculty members who give sufficient irrevocable notice of their decision to retire. Tenured faculty members who commit before July 1 of any year to retire from the University on July 1 of the following year will receive from the University on the date of their retirement a cash grant (which is additional taxable income) equal to the amount that the University contributes to the faculty members' TIAA-CREF or Vanguard retirement accounts during the final year of service before retirement. These grants are not available to faculty members who participate in any phased retirement plan.

2. Incentive Faculty Retirement Plan

Effective July 1, 2010, Princeton added an Incentive Retirement Plan to its current offering of plans . The Incentive Plan is offered to faculty members from the time they turn 65 to their 70th birthday. The plan offers a maximum incentive of 1.5 times salary payable in the next pay period after they signed the retirement agreement. The incentive is age-based and declines by 0.25 AY salary each year from age 65 through age 69. Faculty members can retire at the end of the semester in which they have signed the agreement. However, if a transition to retirement is desired, this plan allows faculty members to continue teaching on a ½ time basis for ½ pay for up to 3 years (6 semesters), if they so choose. The ½ pay is set at either the faculty member’s own salary or at the average of all faculty at the same rank, whichever is higher.

In addition, this plan includes an incentive for those faculty who prefer to continue full-time teaching until retirement at age 70. A faculty member can qualify for an incentive equal to one year of salary at retirement by signing a retirement agreement before he or she turns 67 and committing to transfer to emeritus status at a mutually agreed retirement date before the end of the academic year in which he or she turns 70. The faculty member will receive the incentive payment in the next pay period following their signing the retirement agreement.

Retirement-eligible tenured faculty members with at least ten years of service are eligible for the incentives offered under the Plan, provided they sign a retirement agreement and retire according to the following schedule:

Age when signing
Incentive
When incentive paidYears/semesters eligible to
teach
½ -time
                   651.5 x AY salaryNext pay period after signedUp to 3 years/6 semesters
                   661.25 x AY salaryNext pay period after signedUp to 3 years/6 semesters
                   671.0 x AY salaryNext pay period after signedUp to 2 years/4 semesters
                   680.75 x AY salaryNext pay period after signedUp to 2 years/4 semesters
                   690.5 x AY salaryNext pay period after signedUp to 1 year/2 semesters
Or, full time work until retirement:
Age when signingIncentiveWhen incentive paidOption
Between 65th birthday and 67th birthday1.0 x AY salaryNext pay period after signedWork full-time until retire before the end of the AY in which turn 70
 
When attain 70th birthday:No longer eligible for the incentive plan
 

Faculty members on long-term disability may not participate in the Plan.

3. Three-Year Phased Retirement Plan (Basic)

For retirement-eligible faculty members ages 55 and over.

The goal of the 3-Year Phased Retirement Plan is to permit faculty members to embark upon a period of reduced service, during which it would be possible to bring to completion the supervision of graduate theses and to begin withdrawing from departmental administrative obligations while continuing to teach on a reduced schedule. The Dean of the Faculty is available to meet with any faculty member considering retirement to discuss these plans as well as individual concerns regarding retirement.

The basic plan involves half-time duty for a period of up to three years, with the formal agreement of the participating faculty members to retire from the University at the end of that period. During that three-year period, participating faculty members receive half of their full-time-equivalent (FTE) salaries. The FTE salaries either will be set through the usual process of annual review based upon the faculty member’s salary at the beginning of the period and without any penalty for serving reduced duty time, or alternatively will be the average salary of all professors of the same rank in the University, whichever is larger.  Departments will be charged 0.50 FTE on the teaching budget for those faculty members who participate in this program.

Half-time duty during a particular academic year may take the form of full-time duty during one semester and no duty (nor required presence on campus) the other semester, or half-time duty (with required presence on campus) for the full year. Teaching duties normally will not be reduced below a half-time basis. Faculty members will be permitted to teach at other institution during those semesters that they have no duties here. The period of participation in this plan is envisaged as a period in which faculty members see to completion the work of doctoral students they had been supervising before entering into the plan, so they are not expected to begin working with new doctoral students during this period. Participating faculty members can expect to begin to be freed from longer-term departmental commitments and from committee work and other administrative duties to the extent possible during their participation in this plan. In all cases, the details of half-time duty must have the approval of the Chair of the Department and the Dean of the Faculty each year, and approval requires that departmental teaching and other needs can be met. Participating faculty members are eligible for departmental sabbatical leaves during this period, but with priority adjusted to recognize their half-time duty, and count with half weight in the calculation of the sabbatical of leaves allocated to a department.

During this period the University will continue to make contributions to the faculty members' TIAA retirement account under the formula of the Princeton University Retirement Plan based on the salaries the faculty members actually receive, half of their FTE salaries. Life insurance and long-term disability insurance coverage based on the FTE salary will continue. For those faculty members who participate in the Princeton Health Plan (PHP), AETNA HMO or Consumer Driven health plan (CDHP), the co-insurance limit will be based on the FTE salary as well. Temporary disability benefits will also continue, although since it is a salary-replacement plan benefits will be based on the salaries actually received, half of the FTE salaries. Participating faculty members will remain eligible for employee health benefit expense accounts and dependent care expense accounts during this period.

4. Two-Year Phased Retirement Plan (Enhanced)

For retirement-eligible faculty members aged 55 and over.

A modification of the 3-Year plan is offered to provide faculty members with a higher base salary during the period of part-time duty. The modification provides for half-time service for a period of up to two years, with the formal agreement of the participating faculty members to retire from the University at the end of that period. During this period the faculty members will receive two-thirds of their full-time-equivalent (FTE) salaries rather than just half of their FTE salaries. Again, the FTE salaries either will be set through the usual process of annual review based upon the faculty members' salaries at the beginning of the period and without any penalty for serving reduced duty time, or will be the average salary of all professors of the same rank in the University, whichever is the larger. Departments will be charged 0.67 FTE on their teaching budgets for faculty members who participate in this program.

Faculty members participating in this plan are expected to be in residence for the full academic year during each of the two years, and not to be on either paid or unpaid leave of absence either year, so will not be counted in the allocation of sabbatical leaves to departments. Although formal course teaching might take place just in one term, participating individuals may be expected to supervise independent work or to engage in some other departmental activities throughout the academic year. The period of participation in this plan is envisaged as a period in which faculty members see to completion the work of doctoral students they had been supervising, so they are not expected to begin working with new doctoral students during this period. Participating faculty members can expect to begin to be freed from longer-term departmental commitments and from committee work and other administrative duties to the extent possible during their participation in this plan. In all cases, the details of half-time duty must have the approval of the Chair of the Department and the Dean of the Faculty each year, and approval requires that departmental teaching and other needs can be met.

The University will continue to make contributions to faculty members' TIAA retirement account under the formula of the Princeton University Retirement Plan during this period, based on the salaries the faculty members actually receive, two-thirds of their FTE salaries. Life insurance and long-term disability insurance coverage based on the FTE salary will continue. For those faculty members who participate in the Princeton Health Plan (PHP), AETNA HMO or Consumer Driven health plan (CDHP), the co-insurance limit will be based on the FTE salary as well. Temporary disability benefits will also continue, although since it is a salary-replacement plan benefits will be based on the salaries actually received, two-thirds of the FTE salaries. Participating faculty members will remain eligible for employee health benefit expense accounts and dependent care expense accounts during this period. Participating faculty members will remain eligible for employee health benefit expense accounts and dependent care expense accounts during this period.