At SPSU we've learned that a substantial cut is planned in the state contribution to the optional retirement plans (not TRS). This only affects those that are not in the TRS retirement system (i.e. those in American Century, Fidelity, TIAA-CREF and VALIC). That includes a great many faculty. For example, over 50% of SPSU's faculty are in one of these optional retirement plans.
Last year those in the optional plans contributed 5% of their salary, while the state contributed 9.66% . The planned change leaves the 5% unchanged, but reduces the 9.66% to a state contribution of 8.13%. On a $60,000 salary this is an annual cut of $918 (even before including the tax sheltered aspects of the contribution). Incidentally, the state contribution for those in TRS is planned to increase from 9.24% to 9.28% . I should mention, in the interests of full disclosure, that I'm in one of the optional plans.
Our president has provided me with all of the documents relating to this change that she has. In my opinion they provide no justification or explanation. It also seems that the decision was made by the TRS Board of Trustees with little discussion or input from those affected, and addressed only to the chief financial officers on each USG campus (not Academic Affairs or the Presidents). While the cut is obviously of concern to those in the optional retirement plans, I believe the way in which it is being done should concern all faculty.
Our Faculty Senate is working on sending the following resolution to the Chancellor today. Use it as you see fit. Note that, if your faculty is considering action, time is of the essence.
The Faculty Senate of Southern Polytechnic State University wishes to express its deep and serious concern over the recently announced cuts in the state contribution to the University System of Georgia Optional Retirement Plans.
1) Communication with, involvement of, and consultation with those most affected before the decision was made appears to have been non-existent.
2) The notice provided of the cuts was limited at best. Some of our new faculty this term committed to an optional retirement plan, only to be told shortly thereafter that the state’s contribution was to be cut.
3) No explanation of the rationale for the cuts has been provided.
4) For the many faculty that have made the choice, their ORP is not optional. It is their retirement plan. This cut is a real reduction in their compensation, and they are suffering it purely because they chose an ORP instead of TRS. It’s a point of particular concern that the state contribution to TRS is being increased as ORP is being decreased, and these adjustments will place the ORP state contribution rate at 8.13%, compared to 9.28% for TRS.
We hope that it is not too late to revisit this decision. If allowed to stand, inequities between TRS and ORP will jeopardize the function the ORP’s were designed for: to recruit and retain highly qualified faculty.
Dr. Joel Fowler
Associate Professor, Mathematics Department
Southern Polytechnic State University
(678)915-7414, jfowler@spsu.edu