Last updated on 03/02/2015
Sure, it might be more accurate to say “Math faculty and Union cooperate to include differential ORP benefits in equity raise calculations”, but who would read a post with that headline?
Just in case you’re one of them, here’s the story:
UO faculty receive very different retirement benefits, depending on when they were hired, and on whether or not they opted into the defined benefit Oregon PERS system or the defined contribution Optional Retirement Plan. There are now 4 progressively less generous PERS tiers, depending on date of hire.
Faculty who choose the ORP get the same amount of money paid into their defined contribution plan as UO would have paid for the PERS defined contribution plan. PERS plans have been a better deal historically (sometimes amazingly so, as with Mike Bellotti and Dave Frohnmayer, now collecting about $500K and $250K a year respectively) but include some political risk if the legislature cuts benefits (as happened a few years ago) and if the courts go along with it (the lawsuit should be settled in a few months).
The retirement tier that you were hired into has significant consequences for compensation equity. The earlier you were hired, the better the retirement deal – even for faculty with the same pay and rank. Equity comparisons that ignore this consideration are not fully equitable.
UO Math faculty have pointed this out on this blog, and to the UAUO faculty union leadership. In response, the union has added this language to its faculty raise proposal:
5.c.3: In July 2015 the University [administration] and the Union will form a committee to made up of three members of each party to develop internal equity guidelines for distribution to departments and units addressing compression with ranks, inversion between ranks, gender disparities, and compensation inequities created by different retirement categories.
5.c.4 In August 2015 departments and unit heads shall allot their proportional share of this internal equity pool according to the guidelines give to address … and compensation inequities created by different retirement categories.
The full proposal (article 26) should be posted on the UAUO website soon.
Of course if the UO administration refuses to give equity raises, none of this will matter. We’ll find out when we get their counter on March 12, at Bargaining Session V.
Sounds like a good idea. Did the union object or actually support this before? Will the admininstration see it too?
I can see why Math is so interested in retirement benefits. Here’s some 2013 PERS data posted at OregonLive:
Name Annual benefit Benefit as % of final salary
ANDERSON, FRANK W $251,070 324.4%
BARNES, BRUCE A $115,376 141.5%
KANTOR, WILLIAM M $127,402 106.4%
KOCH, RICHARD M $150,631 199.1%
LEAHY, JOHN V $175,131 169.9%
SEITZ, GARY M $187,994 112.6%
SIERADSKI, ALLAN J $129,985 229.1%
Those ultra high benefits are of course, only to faculty already retired, so are mostly irrelevant today. That said, they illustrate several good points. One is the difference between benefits and cost. Almost certainly, the highest numbers are folks whose costs to university were the old pers rates 30 years ago, but they chose variable as the investment option and rode the mostly boom markets until they retired. Stupidly, as folks chose the riskier variable investment option, pers did not invest in mirrored account holdings so that what ever obligations accrued could be matched without either dipping into pers reserves or pushing employer costs up. As you can see, trying to balance all this out is not nearly as straightforward as it might look at first glance, and those already retired have no bearing on relative comparisons of current faculty.
Yes, the key point for the present is the disconnect between PERS costs and retirement benefits. UO will soon start trotting out the costs, claiming they are part of current faculty compensation. But in reality a good portion of those costs are needed to cover payments to long-retired faculty. Recent and future retirees are not going to see these sorts of extraordinary payouts.
Nothing makes my blood boil when PERS and Mike Bellotti are mentioned together. If Athletics wants to make the argument that they are a stand alone self funding operation then they should be on the hook for the retirement payments to their employees. Bellotti and whoever else can run under the legal definition of public servant all they want but we all know what a ruse that is. It would be nice to see some legislation done that cuts out athletic staff from PERS and makes it retroactive – especially for someone who walked out with millions over a hand shake deal.