important," the report reads.
For many other faculties, "stability and even ameasure of growth in the rate of salary increases,rather than a reduction, is a high priority,"according to the report.
The Corporation cited the School of PublicHealth as an example of why it could not approvethe faculty committee's recommendations; thatschool has currently enacted a salary freeze whichwould prevent the implementation of a salaryreduction.
The report also questioned whether a salaryreduction could even be sustained in the long run.
"We are inclined to think that a Faculty orSchool that made such a decision...would probablysoon have to reassess, and would find it necessaryto make up the salary differential in order toremain competitive," according to the report."
The Upside for FAS
The Corporation upheld the FAS committee'srecommendation that a "soft cap" be imposed withrespect to post-retirement health-care coverage.
Last June, the University adopted a "hard cap,"which would have held constant the dollar amountof the University's retirement health plan forpost-1995 retirees.
The "soft cap" allows the contribution to growafter 1999--but no faster than one percent belowthe inflation rate for health-care costs. A softcap thus removes the threat of inflation fromfaculty benefits, despite the lack of a guaranteedrate of increase in benefits.
Carnesale, who sits in on, but is not a votingmember of, the Corporation, said that the boardconcluded that its benefits package is bothcompetitive and fair.
"Within the Harvard community, the Corporationfeels a responsibility to be sure that people aretreated fairly," the provost said. "[TheCorporation] feels that [the changes] result in abenefits package that seemed to be fair."
Another Corporation member agreed.
"We decided for broad institutional reasons wehad to reject the report," University Treasurer D.Ronald Daniel said in an interview yesterday. "Wegot a very good report [and] we tried to respondwith equal effort."
Professor of Sociology Peter V. Marsden, chairof the FAS Committee on Benefits, refused tocomment to the press, but issued a statement withthe qualification that any further remarks wouldbe delayed until after the May 2 faculty meeting.
"The Committee appreciates the seriousattention that the Harvard Corporation has giventhe recommendation....It is pleased that themembers of the Corporation share its concern abouthow the benefits changes announced last Juneaffect plans and retirement decisions," thestatement said.
"Likewise we are glad that the Corporation hasdecided to replace the `hard cap' onpost-retirement health benefits after 1999 with a`soft-cap.'"
"Of course, the Committee felt that the groundsit set forward for rescinding the announcedreductions...were persuasive, and we are sorrythat the Corporation decided to leave thosereductions in place," the statement said.
Several other members of the committee referredall comments to Marsden.
The Corporation's report also reaches a thirdand much less controversial conclusion, astatement regarding "process, and future steps."The statement points to the recently-establishedUniversity Committee on Benefits as an appropriateforum for evaluation of the benefits process.
Carnesale, who will chair the committee, saidin a telephone interview late yesterday afternoonthat it will work largely through subcommittees.Among the issues to be covered by separatesubcommittees are those of faculty retirement,health care, administrative matters and issues ofparticular importance to the staff.
The provost said yesterday that he has alreadysolicited nominations from the deans, and thatinvitations will be issued to individuals"shortly." He said he hoped the committee couldconvene once before Commencement.
The benefits issue has been among the mostpressing in the FAS since the University TaskForce on Benefits' original announcement lastJune, which called for the one percent reductionand the "hard cap" on medical benefits.
The announcement itself was somewhat rocky. Thetask force had originally been chaired by formerprovost Jerry R. Green. Green, an economist andthe task force's only academic, left the committeeupon his resignation as provost last April, andsubsequently refused to sign the committee'sreport.
Faculty members revolted upon the release ofthe report. At full faculty meetings last Octoberand November, professors expressed outrage at boththe decision itself and the process by which itwas made.
President Neil L. Rudenstine's November reporton the issue further enraged members of thefaculty. In that month's faculty meeting, therewas open opposition and a level of animosity thatclearly surprised Rudenstine.
McKay Professor of Computer Science Barbara J.Grosz summed up the general feeling.
"It seemed as though we were being treated moreas employees of a business than members ofcommunity," she said.
The ordeal took an obvious toll on thepresident. At one point during the Novembermeeting, Rudenstine looked down at the table andshook his head in dejection. Just days after themeeting, the University announced that thepresident would take a medical leave of absence torecuperate from severe fatigue and exhaustion.
Although the Faculty has objected strongly tothe reductions, many impartial observers havedescribed Harvard's package as extremely generous.
The benefit cuts announced last June wereenacted to try to curb the yearly deficit theUniversity runs despite its almost $6 billionendowment.
Presently, the University contributes 11percent of salary up to $61,200 to the pensions offaculty above age 40 and 16 percent, an amounttermed "sumptuous" by Fortune magazine, ofany salary above $61,200.
The plan costs Harvard more for older facultywho generally earn higher salaries and, thus, reaplarger contributions. And with the averageretirement age increasing, the Universityestimates benefits costs will rise significantlyin years to come