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Retirement Benefits: We Beat Harvard (and by a lot)
This is getting a little tedious. Everywhere I look, Dartmouth is providing benefits to its employees well above the odds: more than our Ivy sister schools and miles beyond the Upper Valley market. Today let’s take a look at pension plan contributions.
When compared to Harvard, a school not lacking in resources (it describes its benefits plans as “generous”), Dartmouth contributes more to its employees’ pensions at almost all levels. Here is a summary of the two schools’ pension contributions based on age and salary levels. Cells in red denote advantage Harvard; green goes to Dartmouth; and white is a tie. The age categories are Dartmouth’s; Harvard only distinguishes between employees younger and older than 40.
While Harvard is more generous than Dartmouth with most of its employees under 34 years of age, you will have already concluded that there are few, if any, employees in two of the three categories where Harvard is more forthcoming than we are (employees between ages 21-34 earning over $106,200). The great majority of the employees at each school fall into the categories where Dartmouth’s retirement contributions are far higher that Harvard’s.
Tellingly, Harvard makes a clear distinction between what it contributes as a percentage of employees’ wages below and above the Social Security Wage Base (currently $106,200). Dartmouth does not. Why would Harvard do this? Aren’t lower-ranking employees entitled to the same retirement benefits as professors and senior administrators?
If you are motivated by the radical egalitarianism of the Wright Administration (which, I hope, we are all coming to see is a bankrupting, institution-ruining egalitarianism), you don’t make this distinction. But if you are concerned primarily with retaining and motivating your most valuable employees — your best professors and senior administrators who compete in an international job market — then you do like Harvard: you provide them with better retirement benefits than the employees who are less important to you.
But even so, Dartmouth contributes far greater dollar amounts than Harvard to almost all of its employees’ pension plans — including highly paid faculty. Let’s look at a few examples of how these policies play out in employee pension costs:
Is there any justification for these disparities? Do we need especially attractive retirement benefits to entice maintenance workers, administrative assistants, and assistant deans to the College? If we don’t pay through the nose, will these good folks all leave Dartmouth and go to Harvard? Are housing and commuting costs higher in the Hanover area than in Cambridge? Is it more expensive to raise a family here (compare the public schools in both places if you are unsure)? Is the crime rate higher here?
The answers to these questions are: no, no, no, no, no, and most definitely no.
President Kim, as a first step, roll back Dartmouth’s pension contributions to the Harvard level. If anyone complains, offer them a free bus ticket to Cambridge. As a second step, call in some good compensation consultants and have them align the College’s benefits with the very best private employers in New Hampshire. If some of our top employees risk being poached by other schools, offer them extra salary (not benefits!) for competitive reasons.
The time for Jim Wright’s indulgences is over. Students and alumni should not have to pay for these irresponsible excesses; the many millions of dollar wasted each year on extravagant benefits severely limit the quality of Dartmouth College.
Addendum: A phone call to the friendly folks at the Harvard benefits office confirmed that Harvard offers its employees nothing like our 7% Special Benefit (Harvard retirement contributions are limited to those described in the table above), and that Harvard provides no tuition assistance to any of its faculty and staff at Harvard University or at other colleges and universities, save for discounted rates at the Harvard Extension School.
August 14, 2013
Breaking: Of Crips and Bloods and Memories of Ghetto Parties
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June 25, 2013
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October 9, 2009
D Afraid of a Little Competish
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September 4, 2009
How Regents Should Reign
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August 29, 2009
Election Reform Study Committee
If you are an alum of the College on the Hill, you may have received a number of e-mails of late beseeching your input for a new arm of the College’s Alumni Control Apparatus called…