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March 25, 2002

Benefits dominate Faculty Council meeting

By Michael Terrazas


First on the agenda of the March 19 Faculty Council meeting, held in 400 Administration, was a presentation by interim Provost Woody Hunter on the University’s recently passed Educational and General Budget for fiscal year 2003.

Hunter walked the council through a 15-minute slideshow detailing Emory’s income and expenses that together comprise the roughly $425 million E&G budget. Emory Report detailed the FY03 budget in its Feb. 25 issue; the full story is available in the online archives located at

The bulk of the council meeting was devoted to a discussion of proposed changes to the University employee benefits package. Sociology’s John Boli, one of five faculty who make up the ad hoc Budget and Benefits Working Group (BBWG), was on hand to present the group’s draft resolution, which was to be deliberated formally by the Emory College faculty in a meeting held March 20 (see story).

The resolution calls upon the administration to support an increase in the endowment spending rate until the end of the current national economic recession. Boli said the current situation gives Emory “the opportunity to do something bold” by maintaining current benefits and simultaneously growing programs at a time when other institutions are cutting back. The resolution also calls upon the University to launch a capital campaign to replenish what is spent from the corpus of the endowment.

President Bill Chace said the benefits changes were proposed not simply to deal with the recession but to better position Emory to deal with rapidly increasing costs in health care, which he said are likely to keep rising even after the country emerges from recession. Chace stated unequivocally that he does not support increasing the rate of endowment spending.

The president’s position on this last point was supported by the fringe benefits committee of the University Senate. Committee chair Sid Stein was in attendance at the council meeting to detail a report the group has prepared analyzing the proposed benefits changes.

Stein said the committee unanimously rejected any increase in endowment spending on the grounds that such an increase would be “detrimental to the future well-being of the institution.” Stein also said the committee viewed its task as not to determine whether any changes to the benefits structure are warranted, but rather to evaluate the changes proposed and, when appropriate, to suggest alternatives.

Briefly, the committee’s conclusions regarding the proposed changes are:

• supporting the imposition of a five-year cliff vesting period on University matching contributions to retirement plans, but opposing the proposal to cut the University’s maximum contribution from 10 percent to 8 percent.

• opposing both the current methodology to compute retiree health insurance premiums and the proposed changes to University contributions to retiree health benefits. Instead, the committee proposed (a) reincluding retirees age 55–65 in the expense pool to determine health premiums for all employees; (b) changing aggregate age plus years of service to determine eligibility for retirement health benefits from 70 to 75; (c) informing individuals who begin employment at Emory on or after Jan. 1, 2003, that the University will not contribute to their retiree health benefits.

• supporting the imposition of a graded Courtesy Scholarship based on years of service, elimination of the double-tuition benefit for hospital employees and instituting a flat 80 percent Courtesy Scholarship for employees taking coursework themselves.

To close the meeting, the business school’s George Benston presented a study of his own examining the growth, payout and spending rates of the University’s endowment.

With the meeting running 45 minutes late, chair Frank Vandall called for adjournment following Benston’s presentation. The next Faculty Council meeting will be held April 16 at 3:15 p.m. in 400 Administration.

If you have a question or concern for Faculty Council, e-mail Frank Vandall at