Proposed cuts to faculty retirement plan

Many readers have no doubt been following the recent attacks on public sector workers. Republicans have asserted that public sector workers are pampered in comparison to private sector workers, earning higher salaries and benefits. The NYT recently analyzed differences in public and private sector salaries and found that this assertion only holds for public sector workers without college degrees. If you have a college degree and work in the public sector, you are paid less than similarly educated workers in the private sector. (But we knew that already as do most folks who live in a fact-based universe.) Public sector workers have often accepted lower pay in exchange for better benefits packages and greater job security. With strained state budgets, benefits are on the chopping block.

The University of Minnesota is not immune to these forces. We already know that we're not getting raises next year. We're paying more for our health benefits. And now it's time to go after retirement benefits. Madradprof strongly encourages everyone to read the most recent SCFA minutes, which discuss in some depth the plans for changing the faculty retirement plan, which also covers P&A staff. None of the proposals involve leaving the plan as is, although Carol Carrier states that this option is still on the table. On the menu: creating a two-tier system in which new faculty get an inferior plan while existing faculty get to keep what we have. (This is supposedly Prez Bruininks's preferred solution.) This route has the advantage of getting around the pesky tenure code, since if the administration wants to cut faculty compensation, they *might* have to get a vote from the Faculty Senate--the ambiguity here arises from inconsistency across sections in the tenure code with some sections requiring faculty approval for cuts in compensation and others for cuts in salary. Since new faculty would be enrolled in the inferior program from day one of their employment, they would not experience a cut in benefits. This proposal may fly politically since a lot of current faculty will probably be ok with it as long as their retirement benefits aren't cut. (Yes, I'm cynical.) The other two items on the menu are regressive as both entail across the board cuts in the U's contribution, regardless of income--from 13 per cent to 10 per cent, varying in terms of whether the cut is done in one fell swoop or over a period of three years.

Please share comments about what you think should be done. IMHO it is always a mistake to agree to two-tier systems, since this creates yet more divisions among us. Madradprof also has doubts about the ethics of saving our own asses at the expense of new colleagues. The tenor of the discussion also seems to me to be a bit insincere, i.e. that it is being driven by the political climate rather than by money. As you'll note in the minutes, cuts in contributions for new faculty are discussed in the context of offering higher starting salaries...so it is a bit of a shell game. Let's move the money around so that politicians don't get upset about the retirement plan! Bad idea. Make the conversation about TOTAL COMPENSATION. Faculty salaries at Minnesota are on the low end in comparison to peer institutions. Our total compensation package, however, is more competitive. So leave the retirement plan alone.