Senate OKs benefits proposal

May 2, 2005
Senate OKs benefits proposal

BY michael terrazas

By a vote of 19-1, the University Senate has endorsed a broad slate of proposed changes to Emory’s employee benefits package, put forward by an ad hoc group that has been examining the issue throughout 2004–05.

The Benefits Review Committee (BRC)—composed of representatives from the Senate, Employee Council, central administration and Human Resources—presented its recommendations for a vote at the Senate’s April 26 meeting. BRC Chair Sharon Strocchia, who closed out her term as Senate president at the same meeting, had shared a preview of the recommendations at the March meeting, giving Senate members time to review the proposed benefits changes in preparation for an April vote.

As the Senate is an advisory body to the University administration, the endorsed changes still are simply a recommendation. President Jim Wagner now must decide whether and how to move forward with the package, which in its entirety the BRC estimated would add an additional $6 million each year to Emory’s fringe benefit costs.

“The proposals represent a significantly improved, equitable and forward-looking benefits package that will enhance Emory’s ability to recruit and retain excellent faculty and staff,” Strocchia said.

The BRC’s charge was to design an employee benefits package that would make Emory competitive with its peer institutions, and in its work the committee used benchmark data from all but three of the fellow Top 20 research universities. What the committee was not charged with, however, was finding a way to pay for the new benefits.

“On balance, these changes would require a significant investment of additional money,” said BRC member Mike Mandl, executive vice president for finance and administration. “We have a lot of work to do with deans and financial leaders, and ultimately the Board of Trustees, in terms of how and when to do what. While the committee took cost-benefit issues into account, it wasn’t appropriate for it to get bogged down in those issues.”

Senate debate on the proposed changes (see below) was relatively brief. In her presentation, Strocchia addressed many concerns that had been forwarded to her since the proposal was first put forward in March.

For example, as the table shows, the BRC proposed a sliding scale of University contributions toward employees’ 403(b) retirement accounts based on age; currently all employees receive a 6 percent base University contribution with a maximum of 9 percent. Some questioned whether the change constituted age discrimination.

“The answer is it does not,” Strocchia said, explaining that the graduated scale complies with federal anti-discriminatory guidelines. She added that some universities from the comparison group use an even more weighted scale, with the youngest workers receiving as little as 3 percent base contribution from their employers. “The committee considered this,” Strocchia said, “but decided that ultimately it would create too many inequities.”

Many of the comments Strocchia received centered on the proposal to reduce the maximum amount of allotted sick leave; currently staff employees with 20 or more years of service receive 24 days of sick leave each year, still with no cap on accrual. This is twice the amount of leave offered by most of Emory’s peers, and the committee recommended a flat allotment of 12 days per year for all employees, again with no cap on accrual. At the Senate meeting, Kim Collins from University Libraries said she has heard objections from constituents who do not want to have taken away what they consider a reward for extended service.

Strocchia acknowledged that the proposal could be viewed that way, but said that other benefits changes—such as the addition of three paid holidays for all employees and three paid vacation days for staff with 15–20 years of service—would partly compensate for the lost sick leave.

There were two areas—employee health plans and a possible “portable” courtesy scholarship—where the BRC did not make quantifiable recommendations. Regarding the first, there exists a steering committee with representatives both from the University and Emory Healthcare that each year designs employee health-insurance plans based on market conditions. The BRC decided to offer conceptual recommendations to this committee rather than strict, numbers-based suggestions.

On the latter, Strocchia said Emory is in “somewhat of a bind” when it comes to a portable courtesy scholarship, meaning a dollar-figure benefit which employees could use to pay tuition for dependents enrolled elsewhere. Ideally, she said, such a benefit would reduce the out-of-pocket expense or debt incurred by employees paying another school’s tuition; in practice, however, such scholarships typically result in the other school simply reducing the tuition grant it extends to students.

Still, Strocchia said, Emory needs to offer portable courtesy scholarships “to play in the big leagues.”

“We want it; we need it to mature as an institution,” she said. “But we struggled with how to make it a true benefit. Hopefully the Senate will be involved in developing the next steps.”

Outline of major changes proposed by the Benefits Review Committee

Retirement plan
• adopt sliding scale of Emory contributions; employees ages 21–34 would receive base 5 percent contribution, maximum of 8 percent; ages 35–49 receive 6.5 percent base, 9.5 percent maximum; ages 50 & over receive 7.75 percent base, 10.75 percent maximum. (Current employees age 21–34 would be grandfathered under existing plan.)
• eliminate one-year vesting period for new hires over 55 and those who previously participated in a qualified retirement plan.
• implement Roth 403(b) option; lower salary threshold for 457(b) plan to $125,000 and eliminate report requirement.

Paid time off
• add three paid holidays to winter break.
• increase annual vacation time for staff employees with 15–20 years of service to 24 days.
• introduce flat sick-leave allotment of 12 days per year with no cap on accrual.
• create leave bank to which employees may donate unused vacation and sick-leave time.

Health care
Suggest to existing health plan steering committee that:
• most medically effective drugs and those used to treat chronic illnesses be made available at lowest co-pay.
• operations of pharmacy benefit manager be more transparent.
• Emory endorse Medicare plan to retain retiree access to prescription drug benefit.
• health savings account option be developed.
• disease management and health promotion be addressed aggessively
• regular consultation between health plan steering committee and University Senate Fringe Benefits Committee be established.

Security
• increase basic-term life insurance from $10,000 to $25,000.

Tuition benefits
• change courtesy scholarship eligibility so that employees with one year of service receive
30 percent of tuition; those with two to four years receive 50 percent; and those with five or more years receive 100 percent.
• adopt some kind of portable scholarship that can be used at other institutions.

Family & maternity leave
• 12 weeks of leave guaranteed under the Family and Medical Leave Act be made available before employees are asked to use vacation and/or sick leave, rather than after such leave is exhausted.

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