IU Phased Retirement Program for Faculty

A new phase of teaching and researching — at a different pace

Phased retirement is a valuable option for faculty who want to reduce their workload and ease into retirement, while continuing to contribute to the university.

The benefits of phased retirement include:

  • Reducing workload by 20-50% for a period of 12-36 months (or up to the end of your appointment if less than 36 months).
  • The ability to withdraw funds from some of your IU retirement accounts while still working.
  • Continuing to work while taking a partial leave without pay.
  • Continuing participation in medical, dental, and other IU-sponsored benefits.

Faculty members participating in phased retirement cannot also be employed by an entity that’s considered an IU affiliate by the IRS, including the IU Foundation.

Sabbatical obligations must be met before beginning phased retirement. This means that if you take a sabbatical, you must return to full-time status for one year before entering the program.

During phased retirement, your years of service continue to accrue and count toward retiree status, even while working part-time. As your retirement date approaches, contact your department and IU Human Resources to finalize your retirement and enroll in retiree benefits.

The following faculty members are not eligible for the program:

  • Qualified for 18/20 Retirement Plan benefits (excludes faculty over the age of 70)
  • Eligible for IU Replacement Retirement Plan benefits
  • An IU resident or student academic appointee
  • A PERF participant

Pay and benefits during phased retirement

During phased retirement, your university benefits will continue like any full-time employee.

You can continue your IU-sponsored medical and dental coverage, and IU will continue to pay its portion of your premiums based on your annual budgeted base salary.

A benefit of phased retirement is the ability to withdraw funds from these IU-sponsored retirement plan accounts while continuing to work:

  • IU Retirement Plan
  • IU 457(b) Retirement Plan (funds held at Fidelity only)
  • IU Tax Deferred Account (TDA) Plan

You cannot withdraw funds from TIAA Traditional accounts during phased retirement, but you may transfer up to 10% of your balance each year to your IU Fidelity account for withdrawal through the available distribution options.

IU’s contributions to your base retirement account will continue based on your actual salary paid each pay period (excluding any supplemental pay). If you make contributions to a supplemental retirement plan, they will also be based on your actual salary paid.

  • Supplemental life, critical illness, and supplemental AD&D insurance: Coverage and premiums will continue based on your elected coverage level and annual salary. Rates may change with age or salary adjustments.
  • Long-term disability (LTD): Coverage and premiums will continue based on your elected coverage level and annual salary. However, if you file a claim under the plan, your reduced salary may affect any benefit payments you receive. LTD benefits are 60% of your budgeted base salary (up to $10,000 per month) and are offset by other income sources such as Social Security or Worker’s Compensation. Any change in earnings after the last day of active work will not affect the salary the LTD benefit amount is based upon.

Once the phased retirement period begins, you are not eligible for additional unpaid leaves or sabbaticals. However, eligible faculty may take paid medical leave during the phased retirement period in accordance with IU’s faculty leave policies. Medical leave does not extend the phased retirement period—it runs concurrently with it.

Apply for phased retirement

To participate in the program, you must agree to a reduced workload for 12 – 36 months, followed by retirement from the university. Here’s how to apply:

  1. Consult with your department head/dean to find a reduced schedule and retirement date that works for everyone.
  2. Once agreed, complete and submit the Phased Retirement Application & Agreement Form to IU Human Resources at least 60 days prior to your phased retirement start date.
  3. Your department will review your application for approval, then follow the department instructions to set it up in IU’s system.

Considerations for 10-pay faculty

Because of the way benefits are paid, 10-pay faculty cannot end their phased retirement period in June or July unless the department establishes a summer work arrangement. Phased retirement is tied to your primary job at IU, so summer appointments for teaching or research on a grant would not affect your phased retirement agreement as long as they are entered into IU’s system as a secondary job.

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