Faculty Benefits Committee Annual Report
AY 2004 – 2005
Members of the Committee included Dale Atkins, Michael Chang, Chuck Donbaugh, Michael Elliott, Blair Funderburk, Heather Gorman, John Grovenstein, Jean Hudgins and Gayle Warren.
The Benefits Committee recommended against institution of a long term care insurance benefit for Georgia Tech. We acknowledged some advantages associated with a long term care benefit, namely that employees would probably receive a ten percent reduction in premium payment relative to what they would pay as an individual and, at least for the year of initial offering and for all future new hires, employees would be guaranteed issue. At the same time, we were concerned with the following:
§ uncertain future costs of the insurance and of the cost of long term care,
§ uncertain trends in government policy concerning long term care amongst the elderly,
§ the complexity of the insurance program,
§ the expense of the insurance, especially during a time when employees real incomes have been dropping (salary increases have not kept up with increases in health care costs and other inflationary impacts),
§ our expectation that only 4 to 8% of employees would purchase the insurance,
§ the concern that employees would trust the insurance vehicle simply because Georgia Tech had given it a “seal of approval” by offering this benefit, and
§ the high administrative costs associated with informing employees about options would mean that Tech would rely on the insurance company to provide that information.
The new online open enrollment system worked very well. Slightly more than half of employees (2,345 out of 5,615) made changes to their benefits using the TechWorks system. Under 100 of these experienced a problem with the system. These usually came from employees trying to access the system from home or a secure work site. The problems were usually corrected by adjusting the security preferences within their internet explorer. The committee recommended several changes in the design of the web site to promote clarity and ease of use.
Currently, leaves with pay are permissible for non-classified employees, subject to the president’s approval, for periods up to a year. Faculty in ten out of nineteen of our peer institutions are either entitled to or generally expect (though not entitled) to receive periodic sabbaticals. The remaining nine institutions have no formal policy on sabbaticals.
GTRI has the GO program (Growth Opportunity) which provides for leave with pay for education opportunities, IPAs and research development. However, few people have used this system in the last few years, probably because of budget problems in funding the GO program.
The Benefits Committee conducted an assessment of Georgia Tech and college policies concerning leaves of absence from Tech. These policies vary considerably across academic units, with some focusing on early career development and others on mid- and late-career development.
The committee believes that it would be helpful for the President’s Office to explicitly support the efforts of colleges and schools to develop policies promoting professional leaves, where appropriate, but that policies governing such leaves should largely be developed within each academic unit. Explicit support by the President’s Office would potentially promote more explicit faculty leave policies, which could be helpful both in recruitment and in development of current faculty.
The upcoming capital campaign provides an opportunity to provide a funding base for faculty development grants. A program of leaves in which 30 to 70 faculty per year were provided at least partial assistance would require an endowment of $50 to $100 million.
Maternity leave at Georgia Tech is treated as a medical issue. With a doctor’s certification, employees can use sick leave; otherwise the employee must use vacation hours. In Atlanta, doctors usually certify 6 weeks of leave for a normal delivery and 8 weeks for a cesarean birth. New employees planning on having a baby can buy short-term disability insurance (which covers disability leaves over 31 days long) until they accumulate enough sick leave.
Bright Horizons is currently under contract to run Tech’s child care center. The contract is up for renewal. Tech owns the building and can support 120 children. Tech splits the slots with Home Park residents on a 80-20% split.
It costs $190 per month to go to the center, which is at the market rate. Given the subsidy and Bright Horizons’ nonprofit status, the monthly rate allows the center to provide higher quality care. Currently, there are 179 children on the waiting list. It is hardest for infants, partly because the child-to-staffing ratio for infants is 6 to 1.
In addition, the Graduate Living Center has space for a 100-child child care center. OHR has organized a committee to review child care and other quality of life issues. It will have representatives of faculty, parents who uses child care, grad students, and the Benefits Committee. Michael Chang will represent the Benefits Committee on this ad hoc committee.
Tech is considering switching to a single administrator, whether this is required by the IRS proposed changes to 403b plans or not. Three firms have discussed serving this role with Tech: TIAA-CREF, Fidelity and Valic. The committee reviewed the advantages and disadvantages associated with moving toward a single administrator, with particular attention paid to the flexibility of options offered.
Jobs are benchmarked, depending on the appropriate market. Academic markets, which are national and international, are not examined by OHR, since appropriate salaries are discipline-specific and set by the academic programs. GTRI does some good survey work to estimate salaries, but other units are more informal. Most classified employee markets are local. Administrative and IT jobs are regional and national. These markets are used to benchmark compensation at Tech.
The EquiTech study of 1993 reclassified many of the classified employees based on job descriptions. The study was used to define job grades that would set salaries equitably. OHR is considering a formal review of the compensation plan. OHR would like Tech to develop a more strategic approach to hiring and promotion to improve competitiveness. Also, OHR needs to examine issues of equity relative to new hires and older employees.
Tech has now gone two years without a salary increase and one with a 2% increase. OHR expects to show a lag between Tech salaries and the market. While the weak economy is keeping many employees in positions, if the economy breaks, OHR expects lots of reshuffling, especially in IT. Lags in compensation are most significant at the lower level jobs. But IT is the most divergent from market conditions, especially in systems security.
The Benefits Committee examined materials associated with the living wage issues raised at Harvard University, which eventually led to new policies at the university level. Several issues led to low wages amongst some of its employees. First, Harvard’s use of outsourcing was putting a downward pressure on wages. Second, union representation appears to have been poor on the part of custodial and other employees. Also, low wage workers were not participating in benefit plans for which they were eligible, both because of a lack of understanding and because of the cost (co-pay) of the benefits. Finally, Harvard faculty found that low wage workers often perceived that they were marginalized within the work place.
Georgia Tech has significantly different policies in place. On the benefits side, life insurance and retirement benefits are mandatory, and almost all workers take health care benefits. On the wages side, Tech mostly offers competitive wages, but there are some exceptions. Last year, on the low end relative to the market, lab techs and some craft jobs were as low as 20 to 30% below the market. Salaries for custodians is low, (average $17,900, which is 3.6% less than the local market), in part because there is little opportunity to advance. There are opportunities for education, but this is primarily oriented toward college education.
So, while our lower waged employees are paid close to the market rate and benefits are good, wages are low and barriers to advancement high for these individuals.
GT retires 80 faculty per year.
Most of the benefits received by retirees are managed by the BOR, including TRS, health care, and life insurance. Tech manages benefits associated with access to Tech, such as the BuzzCard for access to the library and recreation center.
OHR has become more interested in building a stronger relationship with retirees, both because Tech may increasingly need to tap retirees as a labor pool, and because they offer potential advantages as mentors and workers.
Out of 185 retirees who are working at Tech, 91 are associated with GTRI. Academic faculty usually work for just a couple of years, often helping the academic unit through a transition as new faculty are recruited. GTRI retirees often work for much longer (5-10 years). GTRI often uses retirees to finish up projects.
TRS prevents retirees from earning more than 49% of terminal salary. The policy has been made more liberal over time. The old policy restricted TRS payments plus post-retirement salary to less than 100% of the retirees terminal salary. Hourly employees can work up to 19 hours per week.
The issue of retirees working seems to be mostly a human resource development issue (mentoring, working) rather than a benefits issue.