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March 4, 2002

Senate debates possible benefits changes

By Michael Terrazas


Discussion of possible changes to Emory’s employee benefits program dominated the Feb. 26 meeting of University Senate, held in Woodruff Library’s Jones Room.

President Bill Chace, who would have to leave early to catch a plane, opened the meeting with his remarks. First, in response to the Senate’s January resolution concerning designated smoking areas, Chace said he has asked public health’s Susan Butler and Facilities Management’s Bob McMains to chair the task force proposed in the resolution.

Turning to benefits, Chace said he has received numerous e-mails about the proposed changes, many of which described a set of “tacit understandings” about what it means to work for Emory. The courtesy scholarship, he said, is held in particular valuation by University employees.

“Any adjustments we must make, we must make in light of those understandings,” Chace said. “But we are also bound by an obligation to the future.”

Addressing those who have suggested Emory spend more of its $4.3 billion endowment until the economic situation improves, Chace said the endowment is not a “rainy day fund,” and the formula that has been calculated for endowment spending is designed to protect the body of the fund and is based on years’ worth of economic analysis and observations. “I think it would be a very serious mistake and probably a moral failure to increase the spending rate because we’d be cheating the future to pay for the present,” Chace said.

Sid Stein, chair of the Senate’s fringe benefits committee, said his group had met with senior administrators in the recent fortnight and received a lot of e-mail about benefits changes. Stein said the committee did not view its task as having to determine whether benefits changes should be made, but rather to evaluate proposed changes and possibly come up with alternatives.

Stein said the committee examined benefits packages at peer institutions and determined Emory’s benefits rank more or less in the middle range, though he did say benefits for Emory staff members do tend to compete more favorably with staff benefits at other institutions.

Emory Hospitals, Stein said, are particularly hamstrung by current benefits packages since their competition is other Atlanta health care facilities, not other universities. Since the hospitals are tied to the University in what benefits they offer, they are forced to provide greater benefits than other area hospitals and thus have more trouble competing economically in other areas. One possibility, Stein said, is to separate Emory Hospitals from the University, though he predicted this change would not be a popular one on campus.

Though the committee had not yet made any final recommendations, Stein said it was “favorably disposed” to three of the proposed changes: instituting a sliding scale for courtesy scholarships in which the longer an employee works for Emory, the larger the percentage the University pays for scholarships, with employees with 10 years or more of service receiving 100 percent funding; reducing from 26 to 21 the age at which employees can receive matching retirement contributions from the University while adding a five-year vestment period, which means if an employee leaves Emory before completing five years of service, all matching contributions revert to the University; and altering Emory’s contributions to its “VEBA” fund.

Emory’s VEBA (voluntary employees’ beneficiary association) trust is a fund into which the University invests money to pay for retirement benefits for future retirees. Emory is required to calculate and report the liability and expense associated with providing medical benefits to current and potential retirees, and the University goes beyond this by actually setting aside money. This fund, calculated over a 20-year period, takes into account existing assets, actual and expected investment returns, expected claims costs and other variables, and it is expected to increase sharply in the near future. Stein said the committee is in favor of at least temporarily altering the way Emory approaches the VEBA fund in order to deal with current economic realities.

Reporting for the Emory College Executive Committee, Judith Miller said the committee has set up a LearnLink conference to provide information and field questions about benefits. Stein, Judith Miller and Vice President for Human Resources Alice Miller said several town hall meetings have been scheduled to discuss benefits changes (see story).

With the meeting running late, Senate members voted unanimously to postpone Judith Raggi-Moore’s update on honorary degree recipients until the March meeting, which will be held March 26 at 3:15 p.m. in the Jones Room.

If you have a question or concern for University Senate, e-mail President Frank Vandall at