UDMPU Professional Negotiating Committee
Cover Letter
Detailed Explanation
The PNC presented a summary of UDMPU member reactions including the uncertainty of the legitimacy of the financial crisis, an alternate proposal and a number of options to gaining $145,000 without reducing TIAA-CREF contributions. Discussions led to the entire PNC unanimously agreeing that the budget crisis needed to be resolved. Presenting an option of using some of the UDMPU travel fund as part of this $145,000 evoked several comments suggesting this action was not an equitable contribution and, in fact, seemed to punish faculty who were active in research and reward faculty who were inactive in academic pursuits. In addition, it seemed to go against the academic nature of any educational institution and the UDM mission. The same basic arguments were used to question the appropriateness of using the CLAE research fund, particularly the equity argument.
Further investigation into considering this reduction in 403b contribution as a loan resulted in several reasons why this would be both unacceptable to lending institutions (and therefore to the administration) and, in some scenarios, illegal. Should the University consider this a loan, it would have to carry this as a future obligation, showing the banks that we have an increased debt and, as a result, not really having a balanced budget. The possibility of getting a loan for capital improvement, therefore, would be dramatically reduced.
Discussions regarding how to strengthen language to guarantee repayment revealed several problems. The administration could paint a rosy picture and include language that implied they would pay back this amount in future years, but then they would be faced with the likelihood of not being trusted in later years when this repayment was not made. They refused to lie at this point as a strong signal this is a new era in faculty/administration relations. They would rather present an honest picture, even if that led to UDMPU members not ratifying this proposal, than to get this passed by having to go back on their word at a later date, using the information available to them at this point. Moreover, it is illegal to create a situation where members were treated differently in TIAA-CREF contributions. Hence, individual accounts could not be tracked for repayment at a later date as some members might no longer be with the University, while some members might not have been with the University when reductions were made. Likewise, allowing individuals to determine if they wanted to contribute directly to the University rather than have a reduction in TIAA-CREF contribution also indicates inconsistent treatment of retirement fund contributions across UDMPU membership, which is illegal. TIAA-CREF contributions from the University must be the same for all UDMPU members.
Several suggestions indicated that individual members who preferred to contribute directly to the University rather than lose retirement contributions could, if they so chose, increase their own contributions to TIAA-CREF by the same or increased amount, thereby not losing any retirement fund build-up. In addition, it was noted that contractually agreed upon increases, and for many, the equity increases, also increased the TIAA-CREF contributions made by the University at the rate of 10% of their annual increases. Thus, an “average” paid member would be gaining over $28,000 in base pay over the term of the contract, which means an $2800 increase per year in University 403b contributions.
This, alone, is greater than the $650 one-time reduction in retirement fund contribution by the University. Even if the same faculty member did not qualify for an equity increase, his/her base would go up $23,000 over the life of the contract. The increase in employer contributions would be 2300, of which 900 would be paid out in the first three years of the contract. This more than offset the $650 reduction for next semester.
( More details on the economic impact may be found at http://www.udmpu.org/BudgetCrisis/Impact.pdf. )
The changes made in language of the Letter of Agreement #15 formalize the administration’s commitment to be financially transparent. In particular, we will receive both financial and staffing information to be used by a committee of the UDMPU for purposes of creating our own financial analyses and providing an opportunity to make our own recommendations. Toward that end, the UDMPU Board created a new committee, chaired by Trevor Crick and including Prasad Venugopal, Jerry Curtsinger, Mary Higby and Mike Canjar to conduct an independent study of expenditures and staffing levels and to make recommendations for any changes resulting from these analyses. It is hoped that this process will become institutionalized by a shared governance structure. Note that Clause 2 of the Letter of Agreement commits the University to cooperate fully with this committee, and to provide it with all the required information.
Finally, we gain a number of “chips” from this action. First, we take a leadership role in investing in the future of this University. By our action, the rest of the University community will now also take part in helping the administration balance this year’s budget and allowing the University to continue to grow into the future. We have a much stronger relationship with the administration to help us in future contract negotiations, showing we are indeed a partner in shared governance and concerned about the survival of our University. And, we “save” many jobs, probably more than we will ever know, in the short-term and protect our image with our non-UDMPU colleagues.
Nobody wants to give back anything, especially when it took so long to get our due in the first place. But we were able to reduce the sting (coming down from $217,000 to $145,000), make it more equitable than a $5,000 cap and gain significantly in our relationships with the administration and the entire University community.
View the Tentative Agreement
View the Detailed Explanation
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