Abstract
This paper outlines simulated results of an incentive, early-retirement model for college and university faculty. An alternative employment propensity, reflecting off-campus or professional employment prospects, is used to determine the incentive portion of an early-retirement offer. Benefit determination involves present-value calculations of future compensation, adjusted for survival rates, continued employment prospects, and enrollment changes. The cost determination involves similar present-value calculations of projected future salary. The consequence is that if the institution uses this method, it will realize declining net benefits as an individual faculty member's alternative employment prospects decline. On the other hand, the institution is also more likely to experience an acceptance of an early-retirement offer by a faculty member.
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