To: Wellesley College Faculty and Staff
From: Piper Orton, Vice President for Finance and Administration, and Carolyn Slaboden, Chief Human Resources Officer
Re: Temporary Change to the 403(b) Retirement Contribution
Date: June 30, 2020
As President Johnson has shared, Wellesley faces a significant financial challenge in the upcoming academic year as a result of the COVID-19 pandemic.
Wellesley acted quickly and implemented several short-term measures including salary and hiring freezes, pay reductions for senior leadership, and temporary summer furloughs. Yet even with those steps, the College is facing upward of a $15 million budget deficit for the next fiscal year without further actions.
The remaining deficit is driven by several factors:
- Due to the need for social distancing in residence halls and classrooms, we will be unable to have all students residing on campus at the same time. This will significantly reduce room and board revenue.
- Given the economic impact of COVID-19 on students and their families, we anticipate a steep increase in the need for financial aid.
- We will incur new costs associated with protecting the health and safety of students, faculty, and staff, including outfitting new spaces for classroom use, modifications to other spaces to enable social distancing, acquiring personal protective equipment (PPE), and providing COVID-19 testing, health screening, and contact tracing.
Given the scope of this deficit, we need to take additional steps to reduce expenses in FY21. After careful consideration, we have decided to temporarily reduce the College’s 403(b) retirement contributions to 3 percent of salary for all eligible employees in FY21. The match from the college will also be suspended during this time. This reduction, which will begin August 1, will apply to faculty, administrative staff, and union staff who are part of the 403(b) plan. This will not impact union employees who are part of the defined benefit pension plan.
Please carefully review the Wellesley College 403(b) Plan Summary of Material Modifications and the Wellesley College 403(b) Plan Revised Annual Notice for details regarding this change to the College Contributions effective August 1, 2020.
These changes do not in any way limit an individual’s ability to contribute to their 403(b) account through payroll deductions, manage their account or investments, or change how and when to access retirement funds. We encourage all employees to schedule a TIAA virtual consultation for assistance with retirement planning. To make changes to your current voluntary 403(b) contribution rate, you can follow these Workday step-by-step instructions. Please contact Kelly Robinson at firstname.lastname@example.org or (781) 283-2215 with any questions or to request a paper version of the notices mailed to you at no cost.
This is a difficult decision, and we have not made it lightly. This is a temporary reduction in response to extraordinary circumstances and reflects the important principle of shared sacrifice, as it affects faculty, administrative and union staff, while having a meaningful impact on the financial deficit resulting from the pandemic. As part of our decision-making we consulted with several committees, including the Budget Advisory Committee, whose members include faculty, staff, and students and which is responsible for advising the president in the planning and preparation of the budget; and the Faculty Benefits Committee, which advises the President regarding faculty benefits and housing.
We know these are difficult times, and we deeply appreciate the myriad ways our community is meeting these challenges together. Thank you for your continued hard work, dedication, and understanding as we navigate changes and move forward.