RESULTS OF PITT'S FINAL TENURED FACULTY SPECIAL RETIREMENT PLAN EXCEED PROJECTIONS

PITTSBURGH, April 2 -- More than 40 percent of the 381 eligible tenured faculty members at the University of Pittsburgh have chosen to participate in a special tenured faculty retirement plan. The plan, which was approved by the Pitt Board of Trustees last October, is designed to give Pitt increased flexibility to meet the changing academic needs of the 21st century.

Pitt Chancellor Mark Nordenberg noted that this level of participation was significantly higher than the 30 percent threshold initially identified as adequate to advance the twin goals of generating savings and stimulating a level of turnover within the faculty ranks that will help ensure the flow of new ideas essential to Pitt's mission as a research university.

He pointed out that the plan was designed to better position the University to aggressively pursue its academic goals. "We have been studying all of our educational programs for the last three years, making hard decisions about future directions, so that we can do the best job of preparing our students to lead meaningful and productive lives in the next century. We have identified the types of programs and faculty needed to drive this change, and this plan gives us the flexibility to put them in place, enabling us to continue the innovation that is essential to a university at the 'cutting edge' of knowledge in both its teaching and research missions," he said.

Nordenberg added that, because the plan was intended to encourage the retirement of higher paid faculty members, it was expected to produce significant savings for the University. Though the savings actually realized will depend upon future replacement hiring patterns, it is projected that this plan will generate savings of from $10 million to $14 million at today's cash value over the next seven years.

Tenured faculty members were eligible for the plan only if they had completed at least 12 years of service and would be at least 60 years old prior to July 1, 1998, or if the sum of their years of age and years of service would total at least 85 by that date. Participation in the plan was totally voluntary. The 163 participants have agreed to relinquish their tenure rights and retire between July 1, 1998 and May 1, 1999. In return, they will receive payment equal to 1.5 times their annual contract salary, but not to exceed a maximum of $125,000.

Nordenberg said that this special plan had been developed to deal with the "backlog of retirements" that had resulted from expectations created by the pattern of early retirement plans sponsored by the University since 1982. "This pattern created the sense that, simply by delaying their retirements, tenured faculty members would qualify for payments in addition to the normal retirement benefits," he said.

In approving the plan last October, the Board of Trustees also approved a resolution stating that it would not support another special retirement plan in the future. "What made sense in the 1980s is not a strategy that will take us into the next century. Our general retirement plan is designed to provide a secure and comfortable retirement for our faculty. With the foundation for individual expectations clearly articulated, we can move forward with the work of assisting faculty members of all ages to plan effectively for retirement within the framework of our general retirement plan," Nordenberg said.

Although not a formal part of the retirement program, "aggressively nurturing" continuing ties between the University and its retired faculty will be a priority. "This is consistent with our belief that everyone will benefit if retired faculty maintain their contacts with their colleagues, students and their field of scholarship. It also recognizes the breadth and importance of the contributions that these individuals have made to the stature of the University of Pittsburgh," Nordenberg said.

-30-