More "help" from Trenton - not really helping

[srru86]

Star Ledger​

Rutgers and other colleges could save $90M with one change. Will lawmakers move on it?​

Basically State rules force RU and others to charge a 62% fringe benefit rate that causes us to be at a cost disadvantage for competitive research grants.
That number comes from the cost of the typical State employees' benefits. Of course very few of these research hires hang around long enough to get the very expensive defined benefit retirement plan.
A number around 30-40% is more typical.
There is an easy no-cost solution, we just need the legislature to allow the bureaucracy to change the process.

 

[retired711]

Star Ledger​

Rutgers and other colleges could save $90M with one change. Will lawmakers move on it?​

Basically State rules force RU and others to charge a 62% fringe benefit rate that causes us to be at a cost disadvantage for competitive research grants.
That number comes from the cost of the typically State employees' benefits. Of course very few of these research hires hang around long enough to get the very expensive defined benefit retirement plan.
A number around 30-40% is more typical.
There is an easy no-cost solution, we just need the legislature to allow the bureaucracy to change the process.

Why do I go to a google alerts site when I try to click the link?

 

[Tango Two]

Why do I go to a google alerts site when I try to click the link?

Rutgers and other colleges could save $90M with one change. Will lawmakers move on it?

Rutgers president says the legislature could change the way it provides benefits like health insurance and pensions for research universities, saving Rutgers alone $73 million.

www.nj.com

 

[srru86]

Rutgers and other colleges could save $90M with one change. Will lawmakers move on it?

Rutgers president says the legislature could change the way it provides benefits like health insurance and pensions for research universities, saving Rutgers alone $73 million.

www.nj.com

Thanks

 

[retired711]

Rutgers and other colleges could save $90M with one change. Will lawmakers move on it?

Rutgers president says the legislature could change the way it provides benefits like health insurance and pensions for research universities, saving Rutgers alone $73 million.

www.nj.com

The fringe benefits received by Rutgers employees are less monetarily than those received by state employees generally. The reason is that faculty are not part of the state pension system, but instead are in TIAA-CREF or similar investment carriers. (This is good for the faculty -- being in TIAA-CREF results in higher retirement payouts.) The idea,therefore, is to have a fringe benefit rate specific to Rutgers that reflects the difference in fringe benefits. The $73 million is an estimate of the difference.

 

[ElmiraExpress]

Star Ledger​

Rutgers and other colleges could save $90M with one change. Will lawmakers move on it?​

Basically State rules force RU and others to charge a 62% fringe benefit rate that causes us to be at a cost disadvantage for competitive research grants.
That number comes from the cost of the typical State employees' benefits. Of course very few of these research hires hang around long enough to get the very expensive defined benefit retirement plan.
A number around 30-40% is more typical.
There is an easy no-cost solution, we just need the legislature to allow the bureaucracy to change the process.

I don’t think any professors or researchers ever can get the defined benefit pensions. I heard that there are some old timers (40+ years) who qualify but everyone else has a 403b, which is same as 401k. For research grants under about $400K, it is just professors and graduate students. The graduate students leave about 4 or 5 years, but professors tend to stay a long time. For larger grants, it is a combination of professors, researchers (often called research professors), post-docs, graduate students. Sometimes this researchers stick around for a whole career, bouncing from grant to grant.

 

[retired711]

I don’t think any professors or researchers ever can get the defined benefit pensions. I heard that there are some old timers (40+ years) who qualify but everyone else has a 403b, which is same as 401k. For research grants under about $400K, it is just professors and graduate students. The graduate students leave about 4 or 5 years, but professors tend to stay a long time. For larger grants, it is a combination of professors, researchers (often called research professors), post-docs, graduate students. Sometimes this researchers stick around for a whole career, bouncing from grant to grant.

Rutgers faculty were part of the defined benefit pension program (PERS) until the adoption of the Alternate Benefit Program (ABP). I forget when that was, but it was long ago -- maybe the 1950s. Since then, as @ElmiraExpress says, faculty have a 403(b) program. Faculty members have a choice of which investment carrier to use, but most are probably still in TIAA-CREF, the original carrier. Rutgers contributes 8% of base salary; the professor contributes 5% of pretax salary. So it is a defined contribution plan rather than a defined benefit plan. Faculty also can kick in more voluntarily if they wish up to the IRS's ceiling. Given the long-term appreciation in the stock market, faculty in the ABP do much better than they would in the defined benefit pension program. Faculty can also, once they leave Rutgers, take their balance in the 403(b) program and transfer it to investments that pay better than do the investment carriers available in the 403(b) program.

 

[srru86]

Yes, faculty are ABP. But I don't know about the lower level Research Assistant types that make these labs go. At the smaller non-research State college I used to work at the comparable employees were in the CWA union and eligible for PERS.

Rutgers has a real mis-mash of unions as part of the UMDNJ deal was they couldn't collapse any unions. So you can have all sorts of mismatches. Not sure if still the case but when we had joint UMDNJ-RU labs you could have people at the same lab bench doing the same thing but with different pay rates and benefits depending on the employer of record.

And I think for budgeting they had to use the one fringe benefit rate provided by NJ OMB which included the higher costs.

At one time the State would automatically increase the appropriation for colleges to cover any the increase in cost of benefits and any increase in number of covered employees. Some time later they just fixed that benefits offset number in the appropriation to close the State budget gap. Any increases came out of the Colleges' budget each year. Not sure if that ever got fixed?

 

[retired711]

Yes, faculty are ABP. But I don't know about the lower level Research Assistant types that make these labs go. At the smaller non-research State college I used to work at the comparable employees were in the CWA union and eligible for PERS.

Rutgers has a real mis-mash of unions as part of the UMDNJ deal was they couldn't collapse any unions. So you can have all sorts of mismatches. Not sure if still the case but when we had joint UMDNJ-RU labs you could have people at the same lab bench doing the same thing but with different pay rates and benefits depending on the employer of record.

And I think for budgeting they had to use the one fringe benefit rate provided by NJ OMB which included the higher costs.

At one time the State would automatically increase the appropriation for colleges to cover any the increase in cost of benefits and any increase in number of covered employees. Some time later they just fixed that benefits offset number in the appropriation to close the State budget gap. Any increases came out of the Colleges' budget each year. Not sure if that ever got fixed?

The union agreements do not cover whether a particular staffer is in PERS or ABP. That's determined by state legislation. So it doesn't matter which union someone is in. The first page of the linked document specifies who is in the ABP. Unless I'm misreading it (which I may be), research assistants are not in ABP.

I recall a time in the 1980s when the state legislature declined to boost the appropriation for increases in higher education fringe benefit costs. I don't know what's happened since, but my guess is that the state legislature has not gotten more willing to cover these increased costs.https://www.state.nj.us/treasury/pensions/documents/factsheets/fact38.pdf