I am pleased to notify you of two important decisions made today by the Wellesley College Board of Trustees. The board has voted unanimously to provide one-time discretionary non-elective contributions to the 403(b) retirement plan to restore the contributions that were reduced from August 2020 through June 2021 in response to the financial challenges of the COVID-19 pandemic. We will fund the additional pre-tax 403(b) contributions through a special draw on the College’s endowment. In addition, the board has approved an overall salary increase of 5% for eligible faculty and administrative staff, effective July 1.
Approving a draw on the endowment for this purpose is an unusual and unprecedented step, but these are unusual and unprecedented times. In the summer of 2020, we faced tremendous financial uncertainty about the impact of the pandemic on enrollment and the possibility of an $8 million deficit. It was in that context that the College reduced its contribution to the 403(b) to the 3% safe harbor for the duration of fiscal year 2021. No one could have predicted that just a year later the endowment would experience such significant returns, or that just a few months after that we would see the highest rate of inflation in 40 years.
Over the past two years, we have continued to provide an exceptional educational program despite extremely challenging conditions, operated effectively as an institution, maintained our financial equilibrium, and worked to keep our community safe. None of this would have been possible without the dedication, hard work, resolve, and ingenuity of Wellesley’s faculty, administrative staff, and union staff. Though it has become a cliché to say that we are all in this together, that is indeed the truth. Every one of you has contributed to the College’s ability to continuously adapt to the pandemic, while advancing our mission.
403(b) contributions. The College will contribute a percentage of compensation in the 2020 and 2021 plan years. Of the 900 people in the plan, we expect that all but 14 of the most highly paid employees will receive more than they would have under the plan in place in July 2020. Because the 403(b) plan operates on a calendar-year basis and individual employee maximum allowable limits are based on the calendar year, we are making contributions to two different plan years as follows:
- 10% of earnings between August and December 2020.
- 8.25% of earnings between January and June 2021.
These amounts are in addition to the 3% safe harbor contribution that plan members have already received.
To receive the contribution, an employee must have been eligible for the plan during the period of the reduced contribution and employed on December 31 of the respective plan year. Employees who retired, were disabled, or died during that period are also eligible, but employees who left the College for other reasons before the end of the respective plan year are excluded from the contribution.
The College will make the 2020 contribution by April 15, 2022, and the 2021 contribution by June 30, 2022. For information about your individual account, you may set up a virtual appointment with TIAA.
Below are some examples of what employees at different earnings levels would have received under the prior plan and the additional benefits they will receive for the spring 2022 contributions:
| Annual earnings | Would have received | Will receive | Additional benefit |
|---|---|---|---|
| $50,000 | $3,208 | $4,146 | $938 |
| $75,000 | $5,468 | $6,633 | $1,165 |
| $100,000 | $7,351 | $8,292 | $941 |
Salary raises for faculty and administrative staff. The contributions of faculty and staff were essential to the College’s ability to adapt to the conditions of the pandemic over the past two years. Recognizing this shared effort and commitment, and acknowledging the inflation we are all facing, we recommended to the board of trustees an overall 5% increase for eligible faculty and administrative staff. Our union staff members, who have provided critical in-person support throughout the pandemic, will receive raises in accordance with the collective bargaining agreements.
Faculty
Assistant professors, associate professors, FIP faculty, and full professors and associate professors not being considered for merit raises this spring will receive an overall 5% salary increase. Full professors and long-term associate professors being evaluated for merit raises this spring will receive a 3.5% increase (together with the same merit pool available as in 2021).
For the past several months, the Provost and Deans have been meeting with FIPAC (the elected committee representing Faculty on Term Appointments, Instructors in Science Laboratory, and PERA Faculty) to discuss a range of issues and concerns. These discussions are ongoing and are expected to lead to a number of recommendations, including for a merit review system for senior instructors in science laboratory (ISLs) and senior lecturers.
Administrative staff
Benefit-eligible administrative staff hired before March 31, 2022, will receive a 5% salary increase. We continue to believe in the value of a merit-based system and will return to a merit-based salary increase program next year.
Senior Leadership consulted with the Budget Advisory Committee, which indicated broad support among its members for the additional retirement contributions and the salary increase plan for FY23.
We are taking these actions with deep gratitude for your remarkable commitment to the College, our students, and our mission. On behalf of the board of trustees and all of Senior Leadership, I want to extend my deepest thanks and best wishes for a brighter and hopeful spring.
