Results of Benefits Review
April 1, 2010
Dear Faculty and Staff:
As you know, one strategy in our $20 million budget reduction plan, adopted in 2009, was to consider reductions to our benefits budget. Before enacting changes in this area, I committed to conducting a comprehensive review of our benefits in the context of peer institutions and employment practices in our sector and region.
I appreciate the many benefits-related comments received from individual staff and faculty members, as well as the college’s leadership committees, during the course of this review. In your feedback, three strong themes emerged: 1) Minimize changes to Smith’s health insurance and retirement plans, the benefits used by the largest number of employees. 2) As much as possible, build benefits savings around future hires, “grandfathering” current employees from unanticipated changes. 3) Retain a competitive program of benefits, in order to continue to hire and retain the best faculty and staff.
Almost 90 percent of our benefits dollars are spent on three benefits – health insurance, retirement plans, and a variety of tuition-assistance programs. Having already eliminated the Emeriti retiree health program and adjusted our health insurance plan design, we focused the core of the review on opportunities for achieving savings in the area of tuition assistance. The scope of tuition benefits offered at Smith is not found outside of higher education. Nor are such benefits offered universally by other colleges and universities. The changes we have made to tuition benefits, and the grandfathering for current employees, are detailed below.
New policy: Employees hired after July 1, 2010, will be eligible for 40 percent of tuition up to a maximum of $10,000, subject to a five-year waiting period. This amount remains more generous than our peer institutions in the five-college consortium.
Grandfathering policy: All eligible employees hired before July 1, 2010, will receive the current capped benefit (40 percent of tuition up to a maximum of 40 percent of Smith’s 2008-09 tuition, or $14,423, with a three-year waiting period).
Both caps will be reviewed in 2012 to assess their competitiveness.
Smith is one of the few colleges or universities to offer a discount for primary school tuition. We will no longer offer this benefit. Employees hired after July 1, 2010, will not be eligible for discounted tuition at the Campus School. Current employees whose children are born after July 1, 2010, will not be eligible for the discount.
Grandfathering policy: The college will continue to offer the current discount to employees hired prior to July 1, 2010, for any children born or adopted prior to July 1, 2010. The current cap on the discount -- 25 percent of 2008-09 tuition, or $2209, for a first child, and 30 percent, or $2650, for other children in the family concurrently enrolled -- will remain in place.
Given the relatively limited childcare and early childhood education options in this area, we decided to retain the employee discount for infant and childcare offered at CECE. The current cap on the discount will be removed; effective July 1, 2010, we will revert to the previous policy (a discount of 25 percent of current annual tuition for a first child, and a discount of 30 percent for other children in family concurrently enrolled).
I understand that a reduction in benefits is never good news. While there are signs of economic recovery, including improvements in the investment markets, Smith must remain committed to the structural budget reductions we identified last year. The savings from these benefits changes will be realized over time and will be an important part of our ability to manage the long-term inflation of our benefits program. I thank you for your hard work and dedication as we continue to implement the collegewide strategies that are helping us meet our budgetary goals.
Carol T. Christ