Duke University to Suspend Contributions to Employee Retirement Funds
“necessary to alleviate a loss of revenue due to the coronavirus pandemic, which could reach up to 15% of Duke’s annual operating budget”
This just goes to show the crisis is affecting schools large and small. Everyone is feeling the pain.
The Duke Chronicle reports:
Duke to suspend University-paid retirement fund contributions, cut salaries for highly compensated employees
Facing a possible decline in revenues of more than a quarter-billion dollars, Duke will suspend University-paid contributions to the Duke Faculty and Staff Retirement 403(b) plan and cut salaries for highly compensated employees for the next 12 months, with President Vincent Price and other top administrators voluntarily taking larger cuts.
In a Wednesday news release, Price described the changes as necessary to alleviate a loss of revenue due to the coronavirus pandemic, which could reach up to 15% of Duke’s annual operating budget—a total loss of between $250 million and $350 million. The University will implement all of the new spending cuts July 1, according to the release
The University will stop contributions to the Faculty and Staff retirement plan—which covers employees who are paid on a monthly basis—for the next 12 months. While employees will still be able to add to their retirement funds out of their own salaries, Duke will no longer make separate contributions.
The Employees’ Retirement Plan—Duke’s pension plan for employees who are paid on an hourly or biweekly rate—will not be affected by the cuts.
Price wrote that by cutting retirement spending in addition to the steps it has already taken, Duke will save between $150 million and $200 million over the next year.
Meanwhile, for the next 12 months, all Duke employees who receive more than $285,000 in compensation will see a pay cut of 10% of their excess salary above that amount. Certain administrators, including Price, Provost Sally Kornbluth, Executive Vice President Tallman Trask and Chancellor of Health Affairs A. Eugene Washington, will voluntarily take larger cuts—20% for Price and 15% for Kornbluth, Trask and Washington.
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Comments
The pain has only just begun!
And to think higher education kicked off this economic shutdown, so they literally slit their own throats.
No room for feeling sorry for the crooks.
Cut the Deans and Vice Deans on down to the staffing of the Diversity, Inclusion, Race and Gender-Studies programs
That’s a pretty darn trivial reduction in pay. If I make $385,000 I lose $10k in salary, or about 2.5 percent.
I wonder if Penn State, the ‘Sanctuary City for Paedophiles’ will increase their child sex trade trafficking for additional income!
Duke University has an endowment of $8.6 billion. Just sayin’.
SURRE! what ever you do, DO NOT dip into the funds you have stashed to save the PEOPLE that took all of your NASTY “SHIT”!
This is robbery. Those contributions are the epitome of buy low and they are being snatched away from contracted compensations plans.
You should look into the trickery here. The 10% of salary over $285,000 or whatever is a trivial pay cut for a few people. It is deisgned to obscure the big pay cut for everyone, the size of which isn’t mentioned. I will guess. Suppose Duke pays 5% of your salary into your pension account. That means everybody is in effect getting a 5% pay cut— even the lowliest lecturer and one-year-cheap-visitor.
How can this be legal— especially for those low-paid workers, who mostly are just hired in the past year or two? Their pay is being cut before the ink is dry on their job offers.
The University can’t even claim financial exigency. Its endowment is $8.5 billion https://www.dukechronicle.com/article/2018/10/how-does-the-duke-endowment-stack-up-to-others-at-peer-universities. It has to use that up before it can start breaking contracts, I should think. A private corporation with $8.5 billion in untapped assets can’t break its contracts just because it has a loss this year.
If these are 401k contributions they’re usually set up as a profit-sharing plan, so if the employer is losing money they have no legal obligation to pay. The same would be true for bonus salary. My company has paid a Christmas bonus every year I’ve been employed by them, but I expect that will not happen this year.