In a regularly scheduled meeting held Thursday, April 11, the Executive Committee of the Board of Trustees approved the recommendations made by President Bill Chace concerning changes in the University’s employee benefits program (detailed in table at bottom).

The president’s final recommendations were made following months of deliberation about alternatives for reducing benefit costs to respond to skyrocketing health care costs for employees and retirees—a problem being experienced by institutions nationwide.

The University held a series of forums with Chace, Executive Vice President John Temple and Vice President for Human Resources Alice Miller to explain to the community the reasons for these cuts in a strong, growing University and to allow members of the Emory family to ask questions.

“The final benefit changes were decided based on hard financial data, but they also were decided only after the administration and trustees carefully considered the comments many of you made during the past weeks,” Chace said. “We sought to minimize any negative consequences to University employees while we faced squarely the need to contain future costs and to remain competitive with other universities. I believe we have succeeded, and these changes will help us do just that.”

Chace also thanked the University Senate’s Fringe Benefits Committee for its substantive work on various benefit options.

“We are committed to preserving affordable health insurance for all employees, and certain tradeoffs are required to sustain these benefits,” Miller said. “As you have heard in the media, Emory is not alone in this plight; employers all over the country are facing such a challenge. We believe, however, that even with changes we will continue to offer attractive and competitive benefits, while better ensuring our ability to do so for the long run.”

The new benefit structure will go into effect Jan. 1, 2003, for all employees currently in the University benefit system.

“The trustees recognized, as well, that Emory Healthcare faces different challenges than the schools and colleges and therefore needs different and separate business strategies to succeed in the highly competitive Atlanta healthcare market,” Chace added. “That means the different components of Emory Healthcare—The Emory Clinic, The Emory Children’s Center, Emory University Hospital, Emory Crawford Long Hospital and Wesley Woods Center—will need to address overall nonfaculty employee compensation as part of the strategic restructuring of Emory Healthcare.

Also at the bottom of this page is an explanation of "vesting," ( vesting) which applies to the new retirement-contributions plan. Succeeding issues of Emory Report will present a more detailed analysis of the University’s budget, the nature and management of the University’s endowment, and the University’s efforts and successes in fund raising, all areas in which employees have expressed a desire for more information.

Vesting

“Vesting” provisions will apply to all new hires and employees who are not currently eligible for University contributions (that is, if you are under age 26 and/or have less than one year of service). The purpose of vesting is to encourage employees to remain with Emory for the long term. The one-year wait for eligibility is counted toward vesting, and all personal contributions are immediately
vested.

The two parts of Emory’s retirement plan will have different vesting schedules. The basic 6 percent contribution will have a five-year cliff vesting schedule. This means that Emory will contribute the basic 6 percent to your retirement account during your first five years of service, and if you stay with Emory more than five years, you will fully own that basic contribution to your retirement accounts. However, you will lose Emory’s basic contributions to your retirement accounts if you leave Emory before you have attained five years of service.

The matching contribution will have a three-year cliff vesting schedule, so that if you stay with Emory more than three years, you will fully own Emory’s matching contributions to your retirement accounts. However, you will lose Emory matching contributions to your retirement accounts if you leave Emory before you have attained three years of service.

If you leave Emory after you have satisfied the vesting requirements, you can leave the contributions in the plan, roll them over into another qualified plan or take any other action that is allowed within the plan.

The plan will continue to require one year of service before any basic or matching contributions are made to your account.