Why do the operating budget assumptions freeze or decrease employer contributions to employee benefits programs rather than reduce some other operating budget expense?
Approximately two-thirds (64 percent) of the College’s operating budget expenses are related to salaries and employee benefits expenses. As such, salary and benefit expenses must be reduced in order to balance the operating budget. Non-salary expenses are being reduced but cannot be reduced enough to avoid reductions in salary and employee benefits pools. Reductions in employee benefits pools minimize the number of positions that need to be reduced in order to balance the operating budget. Reductions in employee benefits pools also can be restored relatively quickly if operating budget performance exceeds projections. By order of magnitude, the $2,308,000 reduction in the College’s employer contribution to the retirement plan is the equivalent to the average salary of 28 full-time faculty members or the average salary of 46 full-time staff members. It is also the equivalent of a 5 percent decrease in the current salary of all faculty and staff members.
Related Questions
- How is a structural deficit different from an annual operating budget deficit that we would experience if we did not reduce spending to make up for state funding cuts and investment losses?
- What are the operating budget projections for FY 2009-2010 that result from the assumptions adopted by the Board of Trustees?
- May an employer sponsoring a 403(b) plan freeze (i.e., cease future contributions) the plan?
