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Benefits Changes Proposed

Committee Finds Faults With Administrators' Decisions

By Jonathan A. Lewin

The Faculty of Arts and Science's Standing Committee on Benefits called yesterday for the University to rescind one controversial change in faculty benefits and delay another change that professors rallied against last year.

The Faculty voted the Committee into existence last December after a number of professors charged the University with failing to consult them on the changes in their post-retirement health insurance and pensions.

The Committee recommended that the one percent reduction in the University's contributions to faculty pensions announced in June 1994 should be rescinded.

It also recommended delaying the implementation date for the changes in post-retirement health care coverage one year, to January 1, 1997, to give time for "serious University-wide deliberations... about how the risks in this area shall be shared."

Professor of Sociology Peter V. Marsden chairs the committee and summarized its findings at the meeting.

The Committee is currently writing a full report to Dean of the Faculty Jeremy R. Knowles, which will be done by the March 21 deadline Knowles imposed, Marsden said.

Neither the Standing Committee nor the Faculty of Arts and Science has the power to revoke or alter the announced changes; as a matter that affects the entire University and all its faculties, only the Corporation can change its original decisions.

The Faculty Committee, composed of five professors and two non-union staff, was told that any short-term recommendations it made had to be cost-neutral and any long-term recommendations had to consider the effects of any cost increases, Marsden said.

One subcommittee analyzed the process and content of the announced changes to faculty pensions.

The Committee found that the primary goal of the University's announced changes to pension contributions were to save money, that the faculty pension line had not been a considerable increase in rising benefit costs and that the University was not forced by legal requirements to make the changes.

It also found that the pension plans are not over-founded.

The increase in the fringe benefit rate caused by rescinding the one percent reduction should be balanced by a temporary reduction in the rate of salary increases, Marsden said.

He noted that professors were likely not to object to the affect on their salaries because pension contributions are tax-exempt.

Another subcommittee examined the issue of post-retirement health insurance benefits.

It found that newly-introduced accounting standards do require the University to acknowledge its liabilities butthat they do not require the institution of thecap on University contributions to post-retirementhealth benefits, which the University announced itwould institute on January 1, 1996.

Finding that faculty and staff will have to payfor 73 percent of their post-retirement healthinsurance coverage by 2015, the Committee decidedthat the University rather than faculty and staffshould take on the liabilities.

Doing so may provide less of an incentive forfaculty members to delay their retirement, Marsdensaid.

The Committee met seven times as a whole andmany times in the two subcommittees, Marsden said,reviewing much of the financial data available tothe original committee and having Universityactuaries run new projections.

Knowles praised the Committee's efforts afterMarsden finished summarizing its findings.

In response to a professor's question, Marsdensaid the Committee has not had time to considerwhat it will do after it delivers its report toKnowles on March 21.

He said it may consider the effect of changesto health benefits, which were instituted inJanuary

Finding that faculty and staff will have to payfor 73 percent of their post-retirement healthinsurance coverage by 2015, the Committee decidedthat the University rather than faculty and staffshould take on the liabilities.

Doing so may provide less of an incentive forfaculty members to delay their retirement, Marsdensaid.

The Committee met seven times as a whole andmany times in the two subcommittees, Marsden said,reviewing much of the financial data available tothe original committee and having Universityactuaries run new projections.

Knowles praised the Committee's efforts afterMarsden finished summarizing its findings.

In response to a professor's question, Marsdensaid the Committee has not had time to considerwhat it will do after it delivers its report toKnowles on March 21.

He said it may consider the effect of changesto health benefits, which were instituted inJanuary

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