Administration Announces Cuts to Employee Health Care, Retirement Benefits

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Picture courtesy of Mount St. Mary’s University

Mount St. Mary’s University administration officials announced that employee health care and retirement benefits would be cut beginning next Jan. during an assembly of faculty, administration and staff members on Oct. 29.

One anonymous source questioned why officials did not seek cuts on “administrative high salary and administrative bloat” before making the decision.

“This seems to be a heartless application of business procedures,” the source said. “It also was not done way the Mount does things; President Newman did not follow the governing documents in terms of consultation. It almost seems like he made his decision with financial advisers external to the Mount Community.”

Under former university president George R. Houston Jr., the Mount no longer allowed retirees to be on the health care plan. Instead, according to one source, they would be given a set stipend every year to purchase their own health insurance.

Gradually the university ended that policy, but grandfathered it in so that employees hired before 1996 would still have this benefit. Most Mount retirees and longtime employees have planned their retirement in light of this promised benefit.

Currently, the Mount contributes 6 percent of an employee’s salary to a retirement plan. After Jan. 1, the university will contribute 3 percent of an eligible full-time employee’s pay, and will match 100 percent of employee contributions above 3 and up to 6 percent of pay.

“It is hard to imagine that this new policy is not targeting those employees with low wages. The only way the Mount could meet their financial goal is by hoping that these low wage faculty members won’t make the 3 percent quota. It seems hypocritical that a president who advocates social justice would exploit these members of the Mount Community,” another source remarked.

Traditionally, when a Mount faculty member retires from working in the classroom or office, he or she remains on the university’s health plan and pays for whatever his or her premium may be.

“Suddenly, with about a month and a half notice, we were told ‘You are getting nothing from the Mount,’ and there is a lot of anger,” a source said.

The health care cut will also hurt those employees who are currently working and planning on retiring soon because they did not receive the forewarning about the loss of this benefit. One source said this lack of proper notice will probably cause such employees not to retire as planned, which would in turn create more expenses for the university.

“Faculty was told that President Powell left the Mount with a horrific financial situation,” one source said. “It angers people to know that the board was not monitoring this, and now President Newman is telling us we have this large debt, and that the Mount is in a dire financial situation which will lead to the cutting of programs.”

“However, he is cutting in such a way that is causing grievous harm to the people of the Mount Community.”

The employees most vulnerable to these cuts are those with large families and those with low salaries, who give exemplary services but are not paid well.

“The President has mentioned doubling the scholarship stipend for faculty,” an anonymous source said, “which is praiseworthy, but if you have the money to double that why are you cutting health care?”

One Mount faculty member commented that the university’s benefits have usually been very family friendly, but that this will no longer be the case. A report from one source shows officials have now issued a spousal carve-out: if an employee’s spouse is employed at an organization that offers an insurance plan, then that spouse will no longer be eligible for the Mount’s health insurance.

These couples will have to pay two separate deductibles, an expense that some can’t afford.

“They are already paid so poorly, so to harm them on an additional level where they lose anticipated benefits just seems heartless,” a source said of the cuts in relation to the university’s staff. “Some of these people will be living only on social security.”

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