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Chancellor Ed MacKay on Benefits Program: What Has and Hasn't Been Decided

February 23, 2011

Dear Colleague:

At its meeting on Feb. 17, 2011, the University System of New Hampshire Board of Trustees made a number of decisions important to our future, including directional changes to USNH employee benefits and compensation. Given the level of concern and information (some of it inaccurate) circulating about these potential changes, I believe it is important to clarify exactly what has (and has not) been decided and to share with you how and when you can expect further information. 

First though I want to reassure you that we will continue to pursue additional means to limit spending and increase revenue that do not rely on reducing your compensation beyond the measures required by the action Thursday.  The reality is that our current level of benefits and rate of cost escalation was not sustainable for our institutions and the students we serve. 

Once fully implemented, approved changes to these programs are projected to reduce the annualized net cost of our total compensation by $8-9 million, equivalent to approximately 8 percent of the $110 million we spend currently on employer paid benefit programs.  It is also important to note that:

  • More than a third of these projected savings will come from administrative efficiencies that have no impact on the benefits that the individual may receive. 
  • The majority of the savings will come from retirement and medical benefit changes for which specific implementation decisions have not been made.  The board delegated the detailed design for these important programs to the chancellor and the administrative board so that we can ensure revisions represent the perspective of the employees who participate in them.  This will include the preferences expressed in the recent employee survey and input from the System Personnel Policies Council, which initiated its detailed review and recommendation process on Friday.
  • The board recommended future pay be more closely tied to performance so that we can better reward and recognize individual contribution and institutional success.
  • The board approved net additional investments of nearly $1 million in enhanced training, performance management, and employee services such as a new Roth savings option and access to post-65 MediGap coverage for retirees, all based on feedback received from the employee preference survey.

You can find the full Total Rewards Report online at http://www.usnh.edu/hr.  The report includes the results of various analyses that led to these changes, including the findings from the employee preference survey. In addition, we will be posting on this site the questions and answers (“Frequently Asked Questions”, or FAQs) received over the past few weeks from those who attended various campus forums or contacted my office.  

As noted above, we have started the next phase of this process by convening the System Personal Policy Council to advise the administrative board how to translate the board action into the detailed medical and retirement benefit designs. No decisions have been made about features like deductibles, copayments and/or employee contributions.  We anticipate these decisions will be made by early May so that we have sufficient time to fully communicate with you about these changes. Meanwhile, we will provide regular updates on our progress and encourage you to check http://www.usnh.edu/hr regularly.  

As we face unprecedented fiscal challenges, I am proud of our efforts to come together to provide leadership in creating a sustainable balance of continuing essential investments in our faculty and staff within constrained resources. The board has given us the opportunity to shape the implementation in a manner that best addresses our individual and collective needs.  I am confident that – together – we can craft solutions that reflect our common concerns for the future of our institutions and the talented people whose hard work and many contributions enable us to achieve our mission.

Sincerely,

Ed MacKay
Chancellor

 


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