Colleges Lower the Boom on Retirement Plans

Colleen Flaherty:

One-Year Contribution Suspensions

At Duke, President Vincent Price said in a campus memo that the university is cutting contributions to the Duke Faculty and Staff Retirement 403(b) plan for a year, starting July 1. This follows a hiring freeze, suspension of salary increases, new construction holds and other measures. The goal, Price said in the announcement, is to reduce projected expenditures by between $150 and $200 million within the next fiscal year to “sustain the university’s academic programs for the near-term.”

While cutting retirement is “painful,” he said, it affects only deferred income for a year. Approximately 300 university employees who earn more than the federal 403(b) contribution threshold of $285,000 also will have their salaries reduced by 10 percent of the amount above the threshold.

Georgetown president John J. DeGioia also announced that the university will suspend all contributions to its employee retirement plan for the coming year, starting next month.

“These contributions would have required $47 million in the coming year,” he wrote in a campus message. “If we find ourselves in a stronger financial position during the coming year, we will revisit this decision.”

Same story at Northwestern. President Morton Schapiro, Interim Provost Kathleen Hagerty and Craig Johnson, senior vice president for business and finance, wrote in a financial update that they anticipate a shortfall of roughly $90 million for the 2020 fiscal year.