November 3, 2006

 

 

David Frohnmayer,

President, University of Oregon

 

 

Dear Dave,

 

On behalf of the University Senate and the Senate Budget Committee, we wish to register our strongest objections to the proposed changes in the TDI and ORP retirement programs currently administered by OUS, and we call for the immediate suspension of the retirement redesign process. Colleagues in Economics and Business who command scholarly expertise in retirement investments identify several significant features of the proposal that are especially problematic.

 

Although many of the details of these proposed changes remain uncertain, and although we realize that negotiations are ongoing, it seems clear that OUS intends at the very least to:

 

  1. shift the costs of management to participants in the various retirement plans, effectively reducing salaries and/or benefits.

 

  1. de-couple ORP from PERS in violation of promises made in 1996 to keep ORP contributions equal to PERS contributions and to impose no additional fees upon ORP faculty

 

  1. drastically limit available vendors, even to the exclusion of TIAA-CREF, the largest fund of its kind in the United States and one to which large numbers of current faculty already belong.

 

  1. adopt a fund-management model that economists here and elsewhere roundly consider inefficient and unnecessary

 

It is absolutely essential that OUS understand the irreparable damage that will be done should these changes be allowed to go forward. As you know, faculty compensation at the University of Oregon remains significantly below that of our comparators across the nation. The morale of an underpaid faculty will sink even lower should this redesign go foward,; our anger at a system that seems not to consider the best interests of its employees will increase,; those faculty who have been tempted to leave for other institutions will have one fewer reason to stay; and it will be even harder to recruit new faculty who may already belong to such funds as TIAA-CREF elsewhere. Until now, the U of O’s retirement benefits (not to mention health benefits, which we understand will also be reduced) have been one of the few advantages we could offer to potential faculty. These changes will eliminate that advantage at a stroke, and as a result the academic quality of this institution will rapidly decline.

 

It is not clear to us that OUS administrators realize the extent of the damage that it is about to be done, or the bitterness that will ensue.

 

It is our hope that you will raise these and other objections with the responsible parties in OUS as soon as possible, and that the process can be halted immediately, so that basic assumptions and models can be re-considered with more consultation of the system presidents, provosts, and faculty.

 

Respectfully,

 

Jeffrey Hurwit, President, University Senate (fall)

David Frank, Chair, Senate Budget Committee

 

Cc:       George Pernsteiner, Chancellor, OUS

            Linda Brady, Provost

            Frances Dyke, Vice President

           

 


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