TCU looks to cut benefits for future employees

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Faculty Senate Chair, Clark Jones (right) looks on as Chancellor Victor Boschini discusses TCU’s benefits package. Photo courtesy of TCU.

TCU is developing a benefits package for future employees that will not be as generous as the existing one.

Chancellor Victor Boschini told faculty and staff at a town hall meeting earlier this month that the current package is “too rich to be sustainable.”

Boschini said the TCU Board of Trustees has asked him to prepare a package of options for them to consider instead.

The university, with the help of a Faculty Senate committee, is examining all benefits including health insurance, retirement, and the tuition benefit. Boschini said compensation and benefits must be addressed because they account for more than 60 percent of the university’s operating budget. That budget is funded primarily through tuition and money from TCU’s endowment. Neither is growing at a pace comparable to the exponential increase in benefits.

Nathan Grawe, an economist at Carleton College, has predicted a sharp drop in student population in the next decade. Boschini said in the coming years, trustees want to hold tuition increases to less than 4 percent.

Boschini said peer institutions Baylor, SMU, Vanderbilt and Tulane have already restructured their benefits packages. He said he would like to maintain the plan for current employees, but noted that changes at Baylor, SMU and Vanderbilt included all employees – current and future.

Cool reception

The discussion was met with skepticism, concerns about losing top job prospects, and complaints that TCU’s benefits already lagged behind its peers.

A compensation analysis done by members of the Faculty Relations Committee of the Faculty Senate argues that the compensation packages are not too rich, and members worry that the new salary and benefit reductions would harm TCU’s ability to “recruit and retain high-quality faculty members.”

“I made the decision to come to TCU personally for the fact that there are outstanding benefits at TCU,” a faculty member in attendance at the Town Hall said. “I’m just concerned that our ability to recruit faculty and remain competitive in the future if we’re not careful with this.”

The report also said that increasing faculty compensation is one way to accomplish TCU’s Vision in Action goal of strengthening TCU’s academic profile and reputation. The University Compensation Advisory Committee (UCAC) charge that benefits are “too rich” is in direct opposition to that and strengthening TCU’s workforce.

“Our compensation packages need to be nationally competitive, not just regionally,” a representative from the Harris College of Nursing said. “I would say that we make sure that we continue to recruit and maintain our top talent across the board.”

Others predicted the cuts would harm TCU’s culture and the relationship between faculty and administration. They said some employees are still smarting over cuts to retiree health benefits.

In 2012-13, TCU’s shifted retiree health benefits from the university plan to a third party. The UCAC report noted that this “provoked a sense of frustration and betrayal from some in the TCU family” because faculty and staff were not consulted with prior to action being made.

According to the minutes from a March 2013 Faculty Senate meeting: “The result was a firestorm of angst and objection, based on the perception that benefits were about to be changed for the worse.”

Jack Hill, a professor of religion, also spoke out about the retiree cuts. “We get to 2013 and all of a sudden, we learn that benefits for retirees are going to be reduced and that fractured the trust.”

“Now you’re talking about cutting benefits for new employees that we’re going to be looking in the eye five years from now, and that’s fracturing the trust.”

Jack Hill, a professor of religion

Rising costs

Although TCU has seen accelerated growth in tuition in recent years, Boschini said that can’t continue.

The largest tuition increase in recent history was an 8 percent increase in 2012. Last year’s tuition increase was 4.5 percent. Boschini said the board wants to hold increases to under 4 percent.

“This has gone up higher than the cost of living index and the higher education price index,” Boschini said.

Chancellor Victor Boschini discusses employee benefits during the faculty staff town hall. Photo courtesy of TCU.

Over the past 10 years, a 1 percent increase in tuition resulted in a $3-4.5 million increase in growth undergraduate tuition revenue per year. An additional 1,000 students would add $49.2 million in gross revenue at the current tuition rate.

Healthcare costs paid by TCU have increased by 145 percent since 2010, from $11 million to $27 million this fiscal year.

Nearly 6 percent of all employee salaries go toward health care premiums, Boschini said. There are 2,336 faculty and staff members at TCU.

TCU’s tuition reimbursement plan is another factor that is driving costs. Boschini said the tuition reimbursement is the biggest benefit employees receive. The university spent $12.4 million educating faculty, their spouses, and children in 2019. This is projected to increase by $3 million over the next 10 years.

“I think this is a great benefit and it encourages people to work here too,” Boschini said.

Boschini said Vanderbilt and SMU implemented much harsher cuts for their current employees and neither has not seen a drop in applicants.

TCU’s expenses are expected to surpass revenue in the future. Source: TCU

“I would say Vanderbilt definitely equals us and they’ve experienced no drop or decline in their positions, but that’s just one,” Boschini said.

Sean Atkinson, an assistant professor of music theory, said comparing us to Vanderbilt isn’t a good comparison because its total compensation is higher than TCU’s.

The committee’s report said that TCU’s financial compensation is not competitive when compared with other universities that field Division 1 football teams, per the committee’s report. TCU’s full professor benefits in 2016 total $43.9 million, nearly $20 million less than Duke, the private university with the best professor benefits.

The UCAC plans to meet to finalize its preliminary proposals Oct. 29. They are scheduled to present their proposal to Staff Assembly Nov. 5 and Faculty Senate is set to hear the proposal Nov. 7.

Proposals will be finalized Nov. 12 and the Chancellor’s cabinet expects to hear proposals Nov. 19.