Due to rapidly increasing costs for benefits services and a slowdown
in revenue growth, the University is considering several changes
to its employee benefits packages.
Speaking to a meeting of the Emory College faculty last week, President
Bill Chace made it clear that no final decisions have been made
about any changes in benefits, but he also acknowledged that the
current economic situationnot just for the University but
for the entire countryhas resulted in a dangerous erosion
of revenue and budget growth.
This is a serious problem everywhere, Chace said. Employers
all over the country are looking at rising benefit costs.
John Temple, executive vice president and chief operating officer,
said surveys of peer institutions have revealed that Emorys
fringe benefits packages are more generous than many similar institutions,
and therefore more costly.
The current examination, Temple said, is directed
at what our costs are in comparison to our peer institutions, at
how those costs might fairly be adjusted in light of both that comparison
and the recession which the nation faces, and how we maintain our
trust with all who work at Emory.
The entire range of benefits, from health care to courtesy scholarships
to retirement, will be on the table for discussion, according to
Chace and Temple. Both acknowledged that any reduction in benefits
is likely to be unpopular among University employees, but given
the current economic situation, they recognize that some difficult
choices may have to made.
Emorys ability to fund new programs, new facilities, salaries,
benefits and other costs has been driven largely by growth in endowment
income, Temple said, but endowment growth has been trending
down for at least two years. According to his offices
budget projections, endowment income in direct support of the operating
budget is expected to decline from a projected $67 million in FY200203
to $62 million in FY200506. Overall income is expected to
grow by $50 million during that same period, but current trends
indicate cost increases will outstrip that growth. Health insurance
costs are expected to rise on the order of 1020 percent in
the coming years, Temple said.
The University will need to examine closely the options available
with the overriding objective of sustaining the quality of University
programs, Temple said. Since affordable health insurance
is seen to be an essential part of the benefits Emory believes should
be provided to its employees, we are carefully analyzing other fringe
benefits that could be reduced to help address this funding issue.
Chace said he plans to discuss available options with administrative
councils and campus groups, such as the University Senate and Employee
Council, before any final decisions are made.
I want to emphasize that the overall strength of the University
remains strong, Chace said. The issue being addressed
is how we can most effectively use our resources to sustain the
long-run vitality and quality of all our programs.