Brandeis has allocated $1 million to compensate faculty and staff whose retirement contributions were not matched by the university between July 1, 2009 and June 30, 2010. Employees who were on the payroll between those dates, fiscal year 10, and who remain on the Brandeis payroll as of June 30, 2018, will receive $1,000 and some former employees may also receive payment.
Only university employees who were enrolled in Brandeis’ 403(b) Basic Retirement Savings Plan on June 30, 2009 or those who “would have become eligible to participle during FY10 [fiscal year 10]” will be eligible for compensation, according to an announcement from the Office of the President on June 18.
Employees who left Brandeis in fiscal year ten or later may also be compensated. According to the announcement, “An employee who left in FY10 (the year the matching benefit was suspended) will receive $100. An employee who left in FY11 will receive $200. An employee who left in FY12 will receive $300. The $100 increments continue up to FY18: An employee who left the university during this period will receive $900.” For example, if an employee left Brandeis in August of 2015, they would receive $600.
Former employees of Brandeis who can receive compensation have been mailed letters to fill out so the university can verify their identity and eligibility for payment. Once the employees respond, they will be paid by the end of September.
This would not affect employees who left Brandeis under a written agreement. For example, if an employee left Brandeis under an agreement that gave them more compensation than the standard severance policy, they would not be eligible for this payment, according to Director of Benefits and Wellness Kevin Pierson.
Brandeis suspended matching contributions to retirement accounts beginning July 1, 2009 and ending June 30, 2010, or for Brandeis’ 10th fiscal year, rather than enacting broad layoffs or pay cuts during the financial crisis, according to a New York Times article. Normally, Brandeis employees would allocate a certain percentage of their salary to their retirement fund, and Brandeis would match that amount, dollar for dollar, up to eight percent (or 10 percent for employees over 50). For employees not exempt from the Fair Labor Standards Act, which requires overtime if an employee works over 40 hours per work week, Brandeis matches up to 6 percent (or up to 8 percent for employees over 50).
Employees then have the option to invest their money in Fidelity Investments or TIAA, two companies that invest retirement savings so those savings then earn interest over time. Employees can specify how they want their money invested.
The amount allocated is not intended to replace the amount lost between 2009 and 2010, according to Pierson. “The issuance of awards of up to $1,000 is not intended to replace missed matching contributions, but rather, to act as a gesture to acknowledge the pain this difficult choice caused affected employees.”
If Brandeis were to compensate employees for the exact amount lost in fiscal year ten due to the freeze, it would be considerably more expensive. According to a current professor at Brandeis who was an assistant professor at the time, their salary was about $65,000 and they were putting away 5 percent into their retirement fund. Brandeis would have matched that 5 percent, or $3,250, dollar for dollar. That money would also accrue interest over time, making it considerably more than the planned $1,000 awards.
This freeze would have affected younger professors more than older professors, as they tended to invest their retirement savings into higher risk, higher reward accounts, and they have a longer period of time for their retirement accounts to gain more interest, according to the aforementioned professor. This concern was raised after the freeze was announced in 2009.
