The faculty union’s Executive Committee urges our members to vote against the Administration's proposal to eliminate the longstanding and popular Tenure Reduction Plan (TRP). Please vote No for your colleagues if not for yourself. The gist is that the Administration wants to take away the tenured faculty’s current guarantee of a year-and-a-half post-retirement income in exchange for a small increase in retirement benefits for PERS retirees and almost no increase for ORP retirees.
The Administration made its proposal to end the tenured faculty’s TRP, which has been in place for at least 30 years, two days before the end of last year’s bargaining round. The TRP guarantees 3 years of ½ FTE post-tenure teaching (or 5 years at ⅓) at current pay for those who want it, plus regular raises. Faculty on the TRP can also receive paid health benefits.
We did not accept the administration’s proposal to end the current plan. Instead, we agreed to meet with the Administration and try to come up with a better plan - one that would address their concerns with the TRP while protecting faculty interests. Our proposal was to replace the TRP with a continuing buy-out arrangement similar to what the Administration offered one-time during Covid, which was for a year of salary plus health benefits. We argued that this would save the University money by encouraging early retirement, compensate the faculty for giving up TRP income, and address the disparate impact of the TRP raises on PERS v. ORP faculty, which we explain below. It would leave open the option for faculty to keep teaching after retirement if their departments needed them, albeit at a potentially reduced wage given the buyout.
After what we thought were productive discussions, the Administration abruptly rejected this proposal without proposing changes. This is why their original plan to dismantle the TRP is coming to you for a vote. We recommend you vote No, and if you do we will bring our plan back to the table during the next round of bargaining, which starts in Winter 2024.
In brief, the Administration’s proposal is to replace the TRP program with a scheme that would remove the teaching guarantee and instead allow departments and the Provost’s Office to negotiate pre-retirement part-time employment with individual faculty, or not. This would presumably mean no post-tenure income for at least some faculty and reduced wages for many if not most others. In exchange, the Administration offered to increase the current 6% raise for tenured faculty who sign up for TRP to 8%. As we explain next, this is a bad deal for the majority of these faculty and an awful deal for many.
Some simple math shows that faculty who take full advantage of the current TRP can earn up to 1.5 times their regular salary, spread out over 3 to 5 years. Additionally, and this is very important to many of your colleagues, teaching on TRP comes with health insurance benefits for the faculty and their family. These guarantees are important in reducing the income uncertainty inherent in giving up tenure. This uncertainty is particularly strong for those who opted into the “Optional Retirement Program” (TIAA or Fidelity) rather than PERS, where benefits are mostly certain. About 40% of current retirement age faculty are in the ORP, and this proportion is growing rapidly.
While the Administration made the point that faculty who chose the ORP (many of them back in 1995) should have to live with the consequences, their proposal to increase the raise from 6% to 8% aggravates the disparity between PERS and ORP retirees. PERS faculty who sign up the full 3 years before giving up tenure and use the now popular “full formula” will get an 8% increase in the defined part of their retirement benefit, which will work out to roughly a 5% increase in yearly retirement income. But for ORP faculty, all they get is the raise and about 3% extra in their retirement account for those 3 years. If you invest the raise, and the market does well, this still will likely amount to less than a 0.5% increase in retirement income. And of course most faculty are unwilling to commit to retirement 3 years in advance. If you sign up 1 year in advance, divide the numbers above by 3. (Interestingly, because of peculiarities in PERS, these retirement increases cost the Administration very little.)
The Administration also argued that the TRP teaching guarantee is a very expensive way to teach courses. We pointed out that ORP faculty already work on average a year longer than PERS faculty - presumably because of the disparity in retirement benefits - and that taking away the teaching guarantee would simply mean that tenured faculty would delay retirement - potentially costing the university even more. We also showed them calculations on the disparate effects of the raises. Our math left them unmoved.
We expect the Administration will try again to dismantle the TRP in the next round of bargaining. A strong No vote against the Administration’s proposal now will make it much easier for us to bargain against their future attempts to do so without adequate offsetting compensation.
Voting will open Tuesday, 3/21, and close at 5pm on Friday, 3/24. All members in good standing will receive a separate email with a link to cast their electronic ballot.
If you have questions about this vote or TRP more broadly, we invite you to drop-in for virtual office hours on Thursday, 3/16 from noon-3pm or Friday, 3/17 from 9-11am. Zoom in here.
If you cannot make these meetings but have questions, you can email Bill Harbaugh, Professor of Economics and UAUO Treasurer, at [email protected].
Professor of Economics and UAUO Treasurer.