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January 24, 2005
Group continues review of Emory benefits package
BY MIchael TERRAZAS
Three years after Emory engaged in a passionate but difficult internal debate over employee benefits, the subject once again is being explored, but the mood surrounding the inquiry is decidedly different.
The Benefits Review Committee, made up of members from University administration, University Senate, Faculty Council and Employee Council, is spending this academic year examining Emory’s benefits package, benchmarking it against peer institutions and looking for possible changes that could tailor benefits more closely to what University employees want and need. The process got under way last fall, when the committee convened and commissioned a study of other Top 20 research universities and their benefits programs, and it continues this spring as the committee hopes to gain input from the Emory community itself.
In 2002—staring at declines in endowment income into the foreseeable future—Emory’s leadership decided to rein in spending by lowering the University’s overall fringe benefit rate. A series of benefits cutbacks were presented to the community in town hall meetings throughout the spring, and ultimately changes were implemented, effective Jan. 1, 2003. But the experience left a significant portion of the Emory community embittered.
When the University’s current leadership began to arrive in the summer of 2003, the benefits changes were examined in a new light. Working with the Senate’s fringe benefits committee, Executive Vice President for Finance and Administration Mike Mandl reinstated pre-2003 benefits for one constituency: 112 retirees who were not yet old enough to qualify for Medicare. The move cost $180,000 in the first year and will decline each year until the entire cohort reaches 65; Mandl called the decision a “no-brainer.”
Now the overall benefits program is under review, but instead of the end goal being to cut costs, it is to ensure that Emory’s benefits package is on par with the top universities in the country.
“It’s clear that Emory needs to revisit its benefits package if it wants to be a destination university,” said Senate President Sharon Strocchia, who chairs the review committee. “What’s different about the process this time is that the University now has a clearly articulated vision to help set priorities. The current leadership team also recognizes more fully that faculty and staff stakeholders have valuable insights into conditions of employment that should be taken seriously.”
“I am very pleased with the approach we are taking, using this process to ensure that our decisions are made in a strategic context consistent with our overall goal of enhancing excellence. I do think we are in reasonably good shape, as virtually all of our peers are struggling with the escalating costs of medical care,” Mandl said. “But I believe we will find that a few adjustments can make a significant, positive impact in helping advance us toward the Emory vision.”
Beginning this week, Emory employees will receive a survey intended to measure their satisfaction with the current benefits package and their perceived benefits needs. The committee urges every faculty and staff member to complete and return the survey, either in hard copy or electronically, by Feb. 4. The data will be used to determine what changes, if any, can be made to the benefits program to make it more competitive.
Last fall Emory exchanged benefits information with 16 of its fellow Top 20 research universities, providing insight into how the current benefits program matches up against the University’s peers.
“Most of the benefits groups themselves are fairly standard; they revolve around health care, retirement, security, paid time off and tuition,” Strocchia said. “Right now we’re focusing on making the basics more competitive with other institutions. Sometimes this work involves rethinking underlying strategies that have guided Emory’s benefits package in the past.”
One example Strocchia cited is the idea of making courtesy scholarships “portable,” meaning the scholarships could be used at other institutions. Other possible options being explored include revising the vesting schedule for retirement benefits to create a more attractive recruiting tool, especially for senior faculty and staff.
The committee’s goal is to work with Human Resources and present recommendations to President Jim Wagner by the semester’s end. The committee is not exploring vendor options, though Strocchia said she hopes the Senate’s fringe benefits committee will be more involved in vendor selection in the future.
“[The survey] will allow employees to identify those benefit groups of greatest concern and value,” Strocchia said. “That way, even if the University can’t implement all of the recommendations immedziately, we’ll have a clear action plan for future improvements.”