Faculty Senate Benefits
Advisory Committee
Issues considered by the
committee in 2008-9.
LSU’s most paltry benefit:
Retirement
– Most institutions have 2.5-3 TIMES LSU’s State
Contribution to ORP Retirement
– The Faculty Senate Benefits Advisory Committee
has felt that this is the most egregious example of
parsimonius faculty benefits at LSU.
– In 2009, the retirement benefits for Optional
Retirement Plan (ORP) employees was arbitrarily
lowered by 20%, which translates to the ORP
faculty taking about a 1% total Pay Cut vs those in
the teacher’s retirement system. Even Chancellor
Martin was not pre-warned about this pay cut.
– Why should only the ORP faculty take a pay cut?
Principal Issues, LSU Benefits
• Retirement Benefits:
– Teachers Retirement System,
– (LSU Employee Contribution of 8% is high with respect
to comparable institutions)
– Alabama, 5%; Kentucky, 5%; Georgia, 5%
– Arkansas, 6%; South Carolina, 6.5%
– Auburn, 5%; Mississippi State,7.25% (State=9.35%)
– Iowa State, 4.5%; Texas,A&M, Texas Tech, 6.4%;
– Kansas, Kansas State, 5.5%;
– Michigan, 5%; Penn State, 6.25%
– Oregon, 6%; Oklahoma, Oklahoma State, 7%.
• Average is 5.75%,
• LSU employee contribution is 28% higher.
State Retirement Benefits, ORP
– LSU State Contribution to Retirement WAS 6.77%
– In 2009, the State Contribution was LOWERED to
5.62% by the State Teachers Retirement board.
– 5.62% is 2% lower than standard employer
contributions to Social Security of 7.65%
– LSU has no contributions to Social Security
– Preliminary examination of comparable Institutions
shows Most institutions to have Social Security
contributions of 7.65% matching Employees, plus
a significant contribution to a retirement fund.
– Some institutions have ORP State Retirement
System contributions as much as 11%, making the
total State Contributions 17.5% of salary,
Why the cut to 5.62%?
• The State Teachers Retirement System
has “unfunded liabilities” that need to be
paid, thus, the ORP faculty have been
tapped to help bail out the TRS!
• Every month, retirement funds allocated
for each faculty at LSU are sent to the
TRS, including significant allocated
funds from the ORP members, to
cover “unfunded liabilities”!
• ORP deserve a >% of state retirement.
Why choose ORP?
• In the 1980’s,there was double digit
inflation for 5 years.
• Those who had retired, for example, after
25years of service, at 2.5% of final salary
for each year of service would have had
62.5% of their final salary as a retirement
income. With 40 years, 100%.
• In 5 years, they lost half of their buying
power, 31% salary equiv., because there
was no significant inflation adjustment.
Why choose ORP?
• Therefore many faculty (including myself)
switched to Optional Retirement Systems
(TIAA) in the 1980’s because there is no
guarantee that the state will adjust for
inflation. (and I had a generous TIAA from
Kentucky Medical Univ., Lexington)
• The state subtracted all prior state
contributions for those who switched to
ORP, some got 5-6 years of only employee
contributions to their ORP when transferred.
Why Choose ORP?
• High profile senior faculty hired to boost the
quality of their departments, or
administrators hired from the outside
usually choose ORP because their time in
job may be limited.
• This includes Chancellors, Vice
Chancellors, etc.
• In 2009 all of them had their total pay
package discriminately reduced by 1%.
• Can we depend on the State to play fair?
State Teachers Retirement
• If you plan to stay at LSU your entire
career,
• And there is no possibility of rampant
inflation some time in the future,
• Then the State Teachers retirement
system is comparable to other State
Institutions.
• But there will be inflation, and retirees
need contractual protection!
Social Security
• Social security benefits at retirement can
range from $20,000-24,000/year
• This can add 20% or more to retirement
income.
• Put it in perspective about retirement:
– 1000-1200 bottles of $20 red wine/year
– 5-10 vacation trips per year (new car, boat)
• Ohio State has no social security, but, has a
14% state contribution to retirement! We have 5.62!
• LSU needs to add 7.65 SS equiv. to the 5.62
Total State Contribution to Retirement (Percentage of Salary)
Percentage of Salary
25
20
15
10
Total State Contribution
5
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
1,LSU;2,Georgia,3,Iowa State;4,Kansas;5,Michigan;6,Indiana;
7,Oregon;8,Arizona State; 9, Mississippi State;10,South Carolina;
11,Kentucky;12,Kansas State; 13,Texas; 14,Michigan State; 15,Ohio
State; 16,Arizona; 17,Penn State; 18,Texas A&M; 19,Texas Tech)
Total Retirement Contribution, 19 Comparable Institutions
35
30
25
20
Total Retirement Contribution
15
10
5
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Retirement Benefits
• It was clear from comments of those on the
committee who had come to LSU from
other institutions that they took a big cut in
benefits, including LSU’s no state
contribution to Social Security.
• One member who transferred from the
Univ. of Iowa some years ago, calculated
$1,000,000 less than if she stayed in Iowa.
• This is a serious concern for new hires!
Retirement Benefits
• Draft Statements from Senate Benefits
Advisory Comm. to the LSU Administration:
• “It is imperative, for recruitment and retention
of Quality Faculty, and fairness to long term
employees, that LSU take immediate steps to
increase the State Contribution to retirement
benefits to be in line with comparable State
Universities.”
• “At a minimum, the usual state contribution
level for Social Security, 7.65%, should be
added to the current 5.62% to equal 13.27%.”
Sick Leave Conversion to
Leave with Pay.
• Currently there is allowed only
conversion of 300 hours of sick leave to
salary when retiring.
• The committee recommends that the
total of sick leave be converted to salary
at the time of retirement. (Some
individuals accumulate more than 1
year of sick leave.)
Issues: Health Benefits
• LSU Health Insurance Benefits seem to be low to
average with respect to comparable institutions.
• But: Long Term Care Insurance needs attention.
• Changes in Insurance Benefits have been made this
year to increase benefits and lower premiums. RAL
was a member of the committee in the Systems
Office that made proposals and selected a vendor.
• This Systems Office Committee, Chaired by Kenneth
Krogstad, LLD, has also recently obtained new, more
beneficial contracts for life insurance and dental. The
committee is currently working on Vision.
• Due to Kevin Cope’s suggestions to the Systems
office, we now have representation on the committee
that submits proposals and chooses best vendors.
Issues, Insurance
• Mr. Ken Krogstad, LLD, and System
Benefits Director Michelle Zeber invited
the Chair of the Senate Benefits Advisory
Committee, to participate in a committee
to recommend a better Life Insurance
option for the faculty. An RFA was issued
and several companies submitted
proposals, which we reviewed.
• The Hancock had a far superior plan than
currently available to faculty.
Issues: Equity and Raises
• Significant equity discrepancies in intradepartmental salaries need to be addressed for Faculty.
• Raises are recommended by Department Chairs,
and approved by Deans. (inadequate oversight)
– Significant political or personal input from the Chair,
outside the relevant considerations of professional
stature and performance can be problematic in these
decisions. Deans rarely turn over a Chair’s
recommend.
– Committees of members of related departments (Basic
Sciences, Humanities, for example) could be
established to either 1) review the chair’s recommendations or 2) submit parallel recommendations to
be considered by Deans to guard for discrepancies.
Issues: Patent Royalties
• In the early 90’s, patent authors received 50%
of royalties and payments and LSU 50%.
However, Patent and Legal costs were
subtracted before any distribution to inventors
• This was supposedly changed in mid-90’s when
a new policy was initiated to give 40% to the
Authors and 60% to LSU, but not subtract any
costs,with immediate distributions.
• This policy was conceived to raise the incentive
for patenting, with inventors sharing first dollars.
• Now, LSU is again subtracting legal and patent
costs before distribution. This abrogation of
the 40/60 split agreement needs revision.
Issues: Legal Benefits
• Legal insurance: No legal insurance is available as
a benefit to Faculty.
• Particularly problematic to the committee was LSU’s
administrator’s use of State Funds in some known
instances of Legal actions against faculty.
• In this case, faculty do not have access to State
Money to use a competing firm for defense, or for
bringing issues to the Administration not resolvable
by the “grievance route”.
• One committee member found that the Univ. of
Colorado has a $20,000 fund available for any
individual faculty member.
• The committee recommends that a fund of State
Dollars be available to faculty through the
Ombudsman or other mediation venue.
Tuition for Dependents
• LSU has no provision for providing Tuition for
Dependents of Faculty
• This is a significant benefit for retention of high
quality faculty, who may be mobile in their
careers when they have college-aged children.
• Upon preliminary research, the committee found
many Universities provide Dependents’ tuition,
and some have exchange tuition programs with
other similar institutions.
• This significant benefits issue needs attention!
Parking Benefit?
• Most LSU Faculty commute to school
via private automobile.
• This is due to a lack of a workable
public transportation system in the city.
• Why, then, if the faculty are obligated to
commute to LSU by auto, should they
pay for parking? It should be a benefit!
• Many universities do not charge for
faculty parking. (Michigan State, e.g.)
Reasons to Address Benefits
• Fairness to long term employees.
• Recruitment of high quality new faculty
– (some faculty have complained that they were not
apprised of LSU’s comparably low State
Contributions to retirement when being recruited)
• RETENTION of highly successful faculty.
– These are the mobile faculty, those whose careers
are top notch and who can easily obtain offers from
competing institutions. They are high profile faculty
whose reputations enhance the stature of LSU.
• For higher salary, concomitant with success.
• Better Benefits, retirement, health, tuition for dependents
– The proportion of tenured, mediocre (not mobile) will
increase with time if the successful ones trend to
leave for better benefits.
Members who had input:
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Lillian Bridwell-Bowles <lilbrid2@lsu.edu>,
"Dr. Muhammad Wahab" <wahab@me.lsu.edu>,
Frank Cartledge <fcartledge@lsu.edu>,
John L Protevi <protevi@lsu.edu>,
Barbara L Dutrow <dutrow@lsu.edu>,
rogerlaine@gmail.com,
Douglas Carlson <dcarlson@lsu.edu>,
Denise Egea-Kuehne <dekueh@lsu.edu>,
Tara Z Laver <tzachar@lsu.edu>,
Leigh Clemons <clemons@lsu.edu>,
Cecile C Guin <cguin@lsu.edu>,
Robert K Doolos <rdoolos@lsu.edu>,
Radhey S Sharma <rsharma@lsu.edu>,
Vincent J LiCata <licata@lsu.edu>