Dear Faculty and Staff Colleagues,
The anxiety and displacement caused by COVID-19 and the economic downturn, combined with more recent incidents of racist violence, have affected all of us in ways great and small. Some of us have lost loved ones; others have loved ones who have lost their jobs; many of us have seen reduced salaries; all of us have made sacrifices. These are the stark truths of our lives today.
And yet, we persist. We care for our patients and our students and our campus. We plan for the ways we will safely teach and learn and conduct research as we gradually come back together. We attend another Zoom meeting. Even with the lowering uncertainties we face every day, the University of Rochester community has demonstrated, again and again, resilience and dedication and a commitment to living by our Meliora values. This is something to be recognized and celebrated, and all of us could not be prouder of or more grateful to you.
As you know, this ongoing crisis has had significant negative effects on the University’s finances. We have already taken steps to mitigate our current and projected budget shortfalls in many areas–tuition, fundraising, and clinical care, to name a few. But we have recently determined that the actions we have taken thus far will not be enough. And so, with deep regret, we have decided that effective July 1, and continuing with quarterly reviews through the fiscal year, we are planning to reduce–but not eliminate–the contributions the University makes to employee retirement accounts.
Currently, the University contributes 6.2 percent of the first $59,200 of an employee’s salary directly to TIAA; and then 10.5 percent of an employee’s salary above that, up to the IRS limit of $280,000. For fiscal year 2021, which begins on July 1, 2020, the University will provide a 6.2 percent contribution for the first $100,000 of faculty and staff earnings. We plan for this change to be temporary and hope to return University retirement contributions to previous levels as soon as we find ourselves in a more favorable financial position.
We have taken this decision now to coincide with the beginning of the retirement plan year, which in the University’s case is July 1. We can increase contributions at any time, and our goal is to do so as soon as possible. We know that many of our peer institutions, including Boston University, Duke, Georgetown, Johns Hopkins, and Northwestern, have entirely eliminated employer retirement contributions, but we were not comfortable doing this, as we believe such action would most adversely affect our lowest paid employees. In addition to these retirement contribution reductions, all University faculty who earn over $280,000 a year will have their salaries reduced by 10 percent of the amount earned over $280,000.
As with the retirement contribution reduction, we are planning for this salary reduction to be temporary, beginning July 1 and lasting for 12 months subject to quarterly review. As a reminder, executive leadership has already taken salary reductions of 20 percent of the amount earned over $200,000 a year. These reductions remain in effect.
We are deeply grateful to our faculty and staff for their contributions to the financial health of the institution. We sincerely wish we did not have to take these steps, but we are doing so in order to ensure that we can emerge from this health and economic crisis in a strong position. Again, we recognize the challenges so many of you have met and the sacrifices so many of you have made in the last few months. Thank you for your service, not only to the University, but also to our broader community.
Sarah C. Mangelsdorf, President
Robert L. Clark, Provost
Mark B. Taubman, CEO, University of Rochester Medical Center
Holly G. Crawford, Senior Vice President, Administration and Finance