Reductions to retirement benefits spark faculty concern

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Chancellor Boschini at September’s Faculty Senate meeting. Photo by Heesoo Yang.

Current and retired faculty members have expressed disappointment at TCU’s decision to reduce employee retirement benefits.

Chancellor Victor Boschini announced in an email earlier this month that the university would be cutting its contribution to employee retirement accounts to 8% from 11.5%. 

Discussions about changing employee benefit packages began last fall, but the recent cuts have been tied to the ongoing cost saving measures being taken by the university during the COVID-19 crisis.

Cuts to date have included a hiring freeze, 20% budget reduction for the upcoming fiscal year and voluntary salary reductions by executive staff.

Boschini said in an email to TCU 360 that the decision was made to reduce the contribution because of the amount of money the university has lost due to the crisis and the desire from the Board of Trustees not to continue increasing tuition. 

A previous announcement in April said the change in contributions would only be for new hires, but it was later extended permanently for all current faculty members. 

The university also plans to cut the monthly retirement stipend for all employees under age 45 on Jan. 1, 2021.

“During the benefits conversations throughout the entire previous academic year we had been told again and again that the new benefits package would be for new employees and not for current employees, so to see that that was being changed at this point was disappointing,” communications professor Andrew Ledbetter said. 

Ledbetter was a member of the University Compensation Advisory Committee (UCAC) that was tasked with reviewing employee benefit packages last fall.

Boschini said the decision to extend the reduction to all faculty members was made because the university currently has a hold on hiring and couldn’t realize the cost savings unless the cuts were widened. 

Faculty members also expressed dismay with the permanent nature of the cuts. 

“But I think the most upsetting thing for faculty was the permanent nature of the reduction,” Faculty Senate Chair Sean Atkinson said. “A lot of faculty didn’t quite understand why permanent reduction to our compensation is necessary of what will probably just be a temporary financial crisis.” 

Ledbetter pointed to the actions of three of TCU’s aspirant university peers–Duke, Georgetown and Northwestern–who have all said they are reducing employee benefits temporarily until their financial situations improve.

“The intent behind those announcements seems to be ‘Hey, this is temporary, we’ll restore these benefits once this financial crisis has passed,’ and TCU instead has made it very clear that these reductions are permanent,” he said. 

In an open letter to the Board of Trustees and Boschini, faculty have called for a more equitable distribution of the retirement stipend and a restoration of the 11.5% contribution when the pandemic crisis has passed. 

About a third of the faculty had signed the petition as of Friday.

Changes in benefits a recurring subject of debate

University action around employee benefits has been ongoing since 2013, when retiree health benefits were shifted from TCU’s plan to a third party. 

The decision “provoked a sense of frustration and betrayal from some in the TCU family,” because of the lack of faculty consultation involved, according to a 2019 report by the Faculty Relations Committee.

The issue of employee benefits resurfaced last fall when Boschini said at a faculty town hall that current packages were “too rich to be sustainable.” 

Boschini cited a projected dip in enrollment over the next decade that won’t allow tuition and endowment revenue to keep pace with the exponential growth of benefits packages. 

The announcement was met with skepticism and concern by faculty. 

UCAC published its report in October, pushing back against some of the chancellor’s claims.

The report said TCU’s benefits packages ranked behind those of the university’s peers and were not overly rich. 

A graph from the Faculty Relations report shows that TCU devotes a smaller percentage of its expenses to compensation than all but one of its peer and aspirant universities. Photo courtesy: Faculty Relations Committee

The report concluded that reducing benefits would “harm TCU’s ability to recruit and retain high-quality faculty members” and go in direct opposition to the university’s number one “vision in action” goal: to strengthen its academic profile and reputation. 

Ledbetter, the chief author of the report, said while the committee was able to determine that the university’s benefits packages lagged behind its peers, it was difficult to gauge its ultimate sustainability because of the lack of budgetary information to which they had access. 

The Faculty Senate endorsed the report in November and UCAC presented its recommendations to the chancellor in March. 

Many of the recommendations, like adding paid short-term disability leave, were adopted by the Board of Trustees. 

However, the committee also recommended not reducing retirement contributions. 

“One of the things that drew a lot of current faculty members to come to TCU over other institutions was this retirement contribution,” Atkinson said. “Again this is just compared with our peer and aspirant universities around us–average faculty salary is lower. So in some ways the retirement contribution makes up for that lower salary.”

Other concerns and potential effects

Outside of the financial ramifications of the cuts, faculty also expressed concern with the university’s transparency and ability to recruit high-level faculty going forward. 

“This is simple, the lower the benefits packages and the more the history of cuts as somebody considers a job, the more negative that puts into the decision making when it comes to considering TCU,” said music professor and former Faculty Senate Chair Blaise Ferrandino. 

Boschini said the cuts have been made in part to ensure that no layoffs have to occur, but concerns still abound that current faculty will be more prone to leaving because of the reduction in benefits. 

Note: Dr. Farris declined to be interviewed for this story. 

The open letter asked for a commitment to the principle that “shared governance requires shared information” and notes that the administration has offered very little in regards to budgetary details. 

“So you can’t, in my opinion, you can’t make cuts that have an impact on the academic mission without fully involving the faculty, or we’re violating our own rules, our own ethos, our own creed,” Ferrandino said. 

The Faculty Senate has passed three resolutions–in 2013, 2018 and 2019–asking the university to involve them when considering changes to employee compensation. 

“It creates a problem where there is not a strong, shared responsibility,” Atkinson said. “The faculty and staff feel like their voices are not being heard, and on top of that, data that could help us to understand decisions that are made is not being made available.”

Boschini said in his email to TCU 360 that he will continue to do everything he can to be transparent with the faculty, but admitted frustration to their concerns as he believes that’s exactly what he has been doing. 

Still, both Atkinson and Ledbetter expressed hope that the cuts and subsequent faculty concerns will help spark a conversation and better working relationship with the administration. 

“I really hope that this opens up and starts a conversation going forward. Not only with the chancellor and his staff, but also with the Board of Trustees, and we can try to develop a culture where we can all be open and all try to do what’s best for the university in a shared, collective way,” Atkinson said. 

CORRECTION: A previous version of this article said that a 2019 report on the universities benefit packages came from the University Compensation Advisory Committee. The report was generated by the Faculty Relations Committee, a subcommittee of the Faculty Senate.