Benefits Concerns Raised at HLS

Recent changes in the Harvard employees' benefits system have raised enough concern among the Law School faculty to warrant a letter from the dean and the formation of an advisory committee.

The changes, which are supposed to save about $10 million annually, were announced last month. They were determined by a University wide committee of administrators who worked on the issue with several advisory groups for several months.

Faculty are most affected by two change in particular--the reduction of Harvard's contribution to the faculty pension plan by one percentage point annually and the switch of Harvard's contribution to the array of health care plans available from a fixed percentage of Harvard's total health expenses to a percentage of the cost of the lowest-cost plan.

In a July 7 memo to Law School faculty, Dean Robert C. Clark referred to previous memos from and informal conversations with faculty members that had raised concerns with some planned alterations in the faculty health benefits and pension plan system.

"I understand that many of you were not enthusiastic about the University's recent announcement of planned changes in faculty and staff benefits," Clark said in the memo. "I have spent a good deal of time worrying about these changes, and have conversed with some of you about the issues they raise."

The members of the Law School advisory group, according to the memo, are Director of Personnel Services Mary A. Cronin, Scott Professor of Law David R. Herwitz, Warren Professor of American Legal History Morton J. Horwitz, Professor of Law Reinier H. Kraakman, Williston Professor of Law Robert H. Mnookin and Assistant Dean for Finance and Operations Paul W. Upson. The group held its first meeting last week.

According to the memo, several faculty members have inquired whether the savings from the cuts in benefits could be used to increase faculty salaries.

As Clark explains in the memo, though, the changes are meant to reduce deficit spending on benefits, which are administered through a University-wide pool. In the past several years, the difference between the revenue set aside for benefits and the actual cost has been made up by funds from other areas of the University.

Clark emphasized that "the planned reductions in benefits will not make a single extra dollar available in the Law School budget. Consequently...any compensatory adjustments to faculty salaries will have to come from reductions in other Law School expenditures or from more-than-incremental increases in operating income."

But a paragraph near the end of the memo seemed to hold out hope for salary increases.

"Incidentally, I do hope that, if the planned changes in faculty retirement contributions occur as scheduled on July 1, 1995, I will be able to give faculty salary increases that are higher than they otherwise would be," Clark wrote in the memo. "The ability to do so will depend on many factors; the picture will be clearer at budget-making time (early next spring)."

Clark did not return phone calls yesterday.

Upson said that he had not heard any talk aboutfaculty salary increases. "I don't know quiteexactly what he's getting at," Upson said,referring to the Clark memo. "I certainly have notheard any discussion about that."

Kraakman said that the issue was not discussedat the first meeting of the group. "Informationabout it is still percolating," he said. "There'sbeen a lot of discussion about it...Our first stepis to find out about it."

Kraakman said that much of the discussionsurrounding the issue has sprung from a desire forinformation about the impact of the changes.

"People wonder if it could have been done insome other way," he said. "I think most peoplewere surprised by it."

"It hadn't occurred to most people, I think,"Herwitz said

Clark did not return phone calls yesterday.

Upson said that he had not heard any talk aboutfaculty salary increases. "I don't know quiteexactly what he's getting at," Upson said,referring to the Clark memo. "I certainly have notheard any discussion about that."

Kraakman said that the issue was not discussedat the first meeting of the group. "Informationabout it is still percolating," he said. "There'sbeen a lot of discussion about it...Our first stepis to find out about it."

Kraakman said that much of the discussionsurrounding the issue has sprung from a desire forinformation about the impact of the changes.

"People wonder if it could have been done insome other way," he said. "I think most peoplewere surprised by it."

"It hadn't occurred to most people, I think,"Herwitz said