Facing devastating financial losses related to the coronavirus pandemic, colleges and universities are cutting costs just about everywhere they can. Increasingly, that includes faculty and staff retirement benefits.
Duke, Georgetown, Northwestern and Texas Christian Universities are some of the institutions to announce cuts to retirement contributions in recent days. Some of these decisions have been more severe and more controversial than others.
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.