Green Criticized Benefits Changes

Former Provost Jerry R. Green had several criticisms of the final result of Harvard's benefits review process which he outlined in a June memo, officials confirmed yesterday.

Green, who served as the head of the benefits review task force until March, sent a memo to President Neil L. Rudenstine and Vice President for Administration Sally H. Zeckhauser on June 14, less than two weeks before the final decisions of the review committee were announced.

Green's memo criticized the benefits changes generally for not taking long-term factors sufficiently into account.

"Policies that will not stand us in good stead have been included due to short-term considerations or political expediency," the memo read. "The neglect of longer-term, indirect, effects of policies is a serious defect of the package of changes you have put forward."

Reached while vacationing in Scotland, Green, now the Leverett professor of political economy, said of the memo, "I think it speaks for itself."

Green announced April 12 that he was stepping down as provost. Former dean of the Kennedy School Albert Carnesale ascended to the job July 1. Zeckhauser took over the reins of the task force following Green's departure.

The proposed changes in Harvard's benefits structure for faculty and staff were announced in late June. Some of the most noticeable changes include: a one-point percentage reduction in the University's contribution to faculty pensions, some pro-rating of health benefits for part-time employees and the pegging of Harvard's contributions to health insurance premiums to a percentage of the lowest-cost health plans available.

Task force memeber Candace R. Corvey, associate vice president for human resources, said yesterday that she and the rest of the task force found the final result to be equitable.

"Coming to the final recommendations was an [exhaustive] process that took into account many viewpoints," she said. "It was complicated and there were many tradeoffs. Not everyone can be happy with the outcome....This is inevitably an issue on which reasonable people will disagree."

The memo did not mention any of Green's opinions of the financial soundness of the plan, but he was critical of that aspect in a short piece in the latest Harvard Magazine.

"At least $4 million a year is being wasted," Green told the publication.

In the memo, Green outlined three principles that he said he believes must be reflected in a "sound" benefits system: benefits are "a highly tax-advantaged form of compensation;" benefits can be used to influence the behavior of individuals "in the broader interest of institutional objectives" and large employers such as the University can use their market power to obtain group benefits unavailable to individuals and to

procure more "advantageous" benefits terms.

Green said the "deficiencies" of the plannedchanges are in the areas of faculty pensions,salary benefits for part-timers and short-termdisability coverage.

He described the new system of pension plancontributions as "highly inefficient," as itreduces the tax-exempt contributions of theUniversity. Green also warned that the changecould hamper long-term incentives to retire.

While Green said in the memo that he supportsreducing health coverage for part-timers, headvocates linking it directly to specific hoursworked rather than creating broad categories ofworkers with different amounts of coverage.

But he also expressed disapproval of thelinkage of health benefits to salary.

"By violating the principle that all Harvardemployees get the same health benefits packages weleave ourselves open to many counterproductiveforces," he said. "To say that we need asalary-linked benefit policy on the grounds ofequity is to ignore the great disparities in meansand circumstances that exist within salarygroups."

Green briefly criticized what he calls the lackof attention paid to short-term disabilitycoverage, saying in the memo that the task forcewas given numerous examples of "abuses andinequities" that have occured under the currentsystem.

He specified two of his own proposals--healthcoverage based on family composition and primarycare outside of Cambridge in a Harvard basedplan--which he described as only some of his moreimportant suggestions.

"I proposed and advocated a number of creativeideas, none of which has found its way into thepackage you offer," Green said in the document.

Green wrote that he advocated the creation of aseparate category for a single adult with a childor children, which he said would cost noticeablyless than the proposed family benefit plan for twoadults with any or no children.

"Creating a single parent familycate-gory...would create the incentive for twoearner couples...to enroll the spouse in his orher employer's plan," according to Green.

A copy of the memo was sent to the Law Schoolfaculty this Monday by Fessenden Professor of LawBernard Wolfman.

Wolfman also sent out a copy of a memo he wrotein late July to the Law School's advisorycommittee on faculty benefits changes in whichWolfman says that Green also criticized a decisionto eliminate retirement plan contributions by theUniversity on salaries in excess of $150,000.

Wolfman did not return a call to his officeyesterday.

"In our conversation, Jerry expressed hisnegative appraisal of the move on its merits, andhe was equally critical of the University's lackof candor in its decision to ignore it in thebrochure," Wolfman wrote in his memo. "He told mesomething of the discussion of the move that tookplace at a meeting in which the Deans participatedand in which he voiced his opposition."

Corvey said yesterday that that particularchange was part of the plan, and said that itwould be part of the upcoming final report on thematter.

"The final report of the task force will bereleased in September," she said. "It will providethe reasons behind why [certain changes wereadvocated].

procure more "advantageous" benefits terms.

Green said the "deficiencies" of the plannedchanges are in the areas of faculty pensions,salary benefits for part-timers and short-termdisability coverage.

He described the new system of pension plancontributions as "highly inefficient," as itreduces the tax-exempt contributions of theUniversity. Green also warned that the changecould hamper long-term incentives to retire.

While Green said in the memo that he supportsreducing health coverage for part-timers, headvocates linking it directly to specific hoursworked rather than creating broad categories ofworkers with different amounts of coverage.

But he also expressed disapproval of thelinkage of health benefits to salary.

"By violating the principle that all Harvardemployees get the same health benefits packages weleave ourselves open to many counterproductiveforces," he said. "To say that we need asalary-linked benefit policy on the grounds ofequity is to ignore the great disparities in meansand circumstances that exist within salarygroups."

Green briefly criticized what he calls the lackof attention paid to short-term disabilitycoverage, saying in the memo that the task forcewas given numerous examples of "abuses andinequities" that have occured under the currentsystem.

He specified two of his own proposals--healthcoverage based on family composition and primarycare outside of Cambridge in a Harvard basedplan--which he described as only some of his moreimportant suggestions.

"I proposed and advocated a number of creativeideas, none of which has found its way into thepackage you offer," Green said in the document.

Green wrote that he advocated the creation of aseparate category for a single adult with a childor children, which he said would cost noticeablyless than the proposed family benefit plan for twoadults with any or no children.

"Creating a single parent familycate-gory...would create the incentive for twoearner couples...to enroll the spouse in his orher employer's plan," according to Green.

A copy of the memo was sent to the Law Schoolfaculty this Monday by Fessenden Professor of LawBernard Wolfman.

Wolfman also sent out a copy of a memo he wrotein late July to the Law School's advisorycommittee on faculty benefits changes in whichWolfman says that Green also criticized a decisionto eliminate retirement plan contributions by theUniversity on salaries in excess of $150,000.

Wolfman did not return a call to his officeyesterday.

"In our conversation, Jerry expressed hisnegative appraisal of the move on its merits, andhe was equally critical of the University's lackof candor in its decision to ignore it in thebrochure," Wolfman wrote in his memo. "He told mesomething of the discussion of the move that tookplace at a meeting in which the Deans participatedand in which he voiced his opposition."

Corvey said yesterday that that particularchange was part of the plan, and said that itwould be part of the upcoming final report on thematter.

"The final report of the task force will bereleased in September," she said. "It will providethe reasons behind why [certain changes wereadvocated].