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  • Recession over retirement plans
  • Posted By:
  • Jamie K
  • Posted On:
  • 22-May-2009
  • Recession has come to the schools and the universities. Everyone is trying to save what they have and what they can. In a recent article in the New York Times, The Brandies University was heard shutting its art gallery and museum. This was being done to raise money for the University. Now recent news states that they will be holding back the retirement payment accounts that would begin in the month of July.

    This is not the only institution with a problem. Universities across the continent are facing financial problems and incorporation various actions to curb these layoffs and suspensions. It is becoming more and more difficult to freeze retirement accounts for the educational institutions. Also other generous benefits that the staff members enjoyed are now curtailed.

    People were under the perception before that the corporate world was the harsher one. The non-profit organizations on the other hand were gentle and kind. But this is happening to the kind and gentle school organizations. As difficult it is for people to let it sink in, it is more difficult for people going to through it.

    They are now thinking of it as a breach of trust and faith, especially because people choose the non-profit organizations even though they pay them less. But these things are being done so that the economy remains stable.

    Brandies University’s retirement contribution through June 30, 2010 would cover $7.4 million of the $8.9 million deficit, the college is facing. The president of the college had wanted to share this news at the end of the week but then a college paper took up the topic so they had to talk about it sooner.

    The Vice President and other members agree that it is the most equitable option for now and it is bad but they know that many colleges will take similar actions now. It is starting to show in smaller institutions that are more vulnerable. It is feared that the nations largest and the most prestigious universities are planning the same move.

    They authorities at the Brandies university feel that a temporary freeze on retirement is fairer and will do less harm to the university’s mission and their future. It is a much better decision than layoffs or across the board pay cuts  that is happening across other colleges.

    As the staff at Brandies will be able to contribute money to their retirement accounts. But for the next year, the college will not be able to match up to them.

    Other colleges following the same rule are Corner Stone University, Dana College and Stephen’s College; it is an all women’s college.

    At the Dana College, there was staff lay offs and then the retirement freeze plan was accepted easily. This is because were afraid that if they raised their voices, they could have lost their jobs. Everyone is just happy to have their jobs for now.

    The Simmons College in Boston has suspended its retirement contribution from March to June and has asked employees to contribute only 6% of their money to the retirement accounts. So far 15 higher education institutions along with other non-profit organizations have suspended their employees retirements accounts.

    Even the University of Miami had considered suspending the retirement contributions as a part of the plans to deal with the money crisis but they have now decided against it.

    Many other colleges are following suit, first by lowering the percentage the college with match the retirement account or either freezing them.

    The recession will slowly affect everyone in a big or a small way. It is always best to be prepared for anything and everything.







 

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