Dickinson College will temporarily stop its retirement contributions for employees starting December 1. The pause is part of the college’s effort to balance the budget in the face of large losses due to the pandemic. All contributions to employee 403(b) plans will be halted for ten months.
Vice President for Finance and Administration Brontè Burleigh-Jones told The Dickinsonian the ten-month time frame was specifically chosen because the expected savings for that window will be $3.1 million, which, when paired with other cuts, will reduce the deficit.
The college has taken other measures, too, including a set of layoffs and furloughs, and a ten percent pay cut for members of senior staff, which includes President Ensign and the members of the leadership team.
The college contributions to 403(b) plans is an automatic fixed contribution of eight percent of an employee’s salary, and then a match of 0.25 percent of every dollar the employee contributes. The eight percent contribution was raised from seven percent in July 2016, while the additional matching contribution was added in July 2017.
Burleigh-Jones said, “Aside from financial aid, employee compensation represents the largest component of operating expenses in the budget. Given the size of the reductions we have made since fiscal year 2016, we needed to look at the overall compensation base when balancing the budget.”
Higher education is facing broad challenges amidst the pandemic, and Dickinson’s decision not to bring back students for the fall semester has added to the fiscal stress. Burleigh-Jones noted that some peer schools had taken similar measures. Ursinus College suspended contributions to employee retirement and both Gettysburg and Muhlenberg Colleges have reduced their retirement contributions for employees. Gettysburg reduced their contribution from 10 percent to five percent, while Muhlenberg has reduced their contribution from 10 percent to four percent.
Cuts to retirement contributions are part of a broader set of budget changes the college is undertaking to meet the pandemic-induced shortfall of between $33 and 39 million. The Dickinsonian reported last week the college has laid-off 19 employees and furloughed or partially furloughed 78 other employees.
Burleigh-Jones said Dickinson was able to delay some of these changes due to operating reserves the college has maintained for emergency situations. “Many of our peer institutions do not have reserves and were required to make tough budget decisions beginning last spring,” she said.