CONTACT: Stanford University News Service (415) 723-2558
Retirement plans to be consolidated under new plan
STANFORD -- All non-exempt employees who are not under union contract will be eligible beginning in 1997 to participate in the Stanford Contributory Retirement Plan (SCRP) -- which is currently limited to faculty and exempt staff -- announced James Franklin, director of Total Compensation, and retirement manager Lori Lee at the Oct. 26 Faculty Senate meeting.
Retirement benefits for staff members who are under collective bargaining agreements are determined by provisions of those agreements, officials said. The effect of retirement plan changes on those staff members is yet to be determined.
Recommendations by the Office of Total Compensation to change the university's retirement programs were approved by the Board of Trustees last month. The redesigned retirement program will be implemented in phases and a detailed time line of the changes will be distributed to all employees in late November, according to a staff memo issued by Barbara Butterfield, vice president of faculty and staff services.
The changes came after a two-year review of the programs. The Committee on Faculty and Staff Benefits, a special retirement redesign task force and other advisory groups participated, Butterfield said.
Stanford currently offers two retirement plans. The SCRP covers faculty and exempt staff, and the Stanford Staff Retirement Annuity Plan (SRAP) covers nonexempt and bargaining unit staff. Employees enrolled in SCRP manage their own funds at their own risk, and do not lose their contributions if they leave Stanford.
In contrast, the university directs employee investments and guarantees benefits under the SRAP. But participants in this plan who leave Stanford receive less retirement income than if they had retired from Stanford, Lee said. "If you leave Stanford [under this plan], you lose out."
Nonexempt staff who move to SCRP will retain the benefits they have earned in SRAP as of Dec. 31, 1996. But future growth in benefits will accrue in SCRP, said Claire Hamilton, communications specialist for Total Compensation.
SRAP participants above a certain age, which has yet to be determined, will have the option of remaining in the plan or moving to SCRP. Detailed information outlining both plans and modeling disks to help employees compare their projected retirement income under each plan will be provided so informed decisions can be made, Hamilton said.
The plan that goes into effect in 1997 will be a slightly modified version of the SCRP plan, in which the university currently contributes 5 percent of an employee's salary to the retirement fund per year and matches employee contributions to the fund up to an additional 5 percent.
Participants under the new plan still will receive a contribution from Stanford equal to 5 percent of their base pay without making any contribution to the plan. But they will only need to contribute 4 percent to get Stanford's additional matching contribution of 5 percent of pay.
Employees who invest 3 percent will receive an additional 4 percent contribution from the university; those who invest 2 percent will get an additional 3 percent contribution from the university; and an employee who invests 1 percent will receive an additional 1.5 percent contribution from the university.
"That really helps people who are not making as much money get the maximum amount from the university," Franklin said.
Additional changes to the current SCRP plan and the Tax Deferred Annuity program that will be implemented in 1996 include:
"Our objective is to deliver a better benefits program for less money if possible," Franklin said.
Other Senate actions
At the conclusion of the retirement benefits report, Provost Condoleezza Rice provided the senate with a brief update on the tuition benefit program for children of university employees.
There continues to be a strong likelihood that the university will lose more than $1 million in annual federal funds that help pay for the program, Rice said.
"I want to allay people's fears. At least for the next year there shouldn't be any change in the benefit even if there is a change in federal regulations," she said.
In other action, the Faculty Senate unanimously supported President Gerhard Casper's recent statement affirming the goals of affirmative action at Stanford and approved a plan to give students participating in the Continuing Studies program the option of auditing a class.
The senate tabled a proposal to give Stanford credits to students who complete courses in the Education Program for Gifted Youth (EPGY) after several faculty expressed reservations about the motivation for awarding such credits.
Some senate members sharply disagreed with language contained in the proposal indicating that recruitment is one of the justifications for awarding credits to these highly gifted students.
"We should not get into the habit of giving credit for recruitment goals," said Michael Bratman, professor of philosophy. "The rationale should be that the students did the work and earned the credit."
This is an archived release.
This release is not available in any other form.
Images mentioned in this release are not available online.