Sunday, January 03, 2010

Dayton Daily News: Pensions help in recruiting talented faculty, say colleges

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Pensions help in recruiting talented faculty, say colleges
An institution’s costs rise with the size of its payroll, which reflects growth.
Dayton Daily News, January 2, 2010
By Dave Larsen, Staff Writer
DAYTON — Based on current trends, Wright State University’s annual pension tab — currently $9.63 million — would rise to $11 million by 2013.
And that’s a good thing, said Jeff Ulliman, assistant vice president for finance and university controller.
“It means our enrollments are staying strong, our research is continuing to grow and we’re a healthy institution in that manner,” Ulliman said.
As Ohio’s economy continues to struggle, some government officials bristle at the cost of maintaining public pensions, which are all but untouchable in budget discussions.
But Ulliman said the payments are “the cost of doing business” for state colleges and universities.
Public institutions like Wright State pay 14 percent of faculty salaries to the State Teachers Retirement System (STRS) and the same percentage of staff and administrative salaries to the Ohio Public Employees Retirement System (OPERS).
“It’s a percent of salaries, so it is something we try to build in annually to the budget,” said Ulliman.
Fran Robinson, a spokeswoman for Central State University, said contributions to STRS and OPERS “are necessary to both attract and retain a world-class public employee work force.”
While the contribution rate has remained unchanged for many years, an institution’s pension costs rise with the size of its payroll. For example, Sinclair Community College’s STRS contribution rose $521,306 — or nearly 11 percent — from fiscal year 2004-2005 to fiscal 2008-2009.
“The increase that occurred there was solely a result of increased growth and demand in our programs that required us to have more faculty teaching,” said Jeff Boudouris, Sinclair’s vice president and chief financial officer.
Higher enrollments typically mean hiring more faculty, and Wright State, Central State and Sinclair each boasted record enrollments in fall 2009.
The health of the STRS system has suffered due to the recession and higher health care costs. In September STRS proposed boosting the employer contribution from 14 percent to 16.5 percent over five years, starting in 2016. Universities are closely watching to see how the legislature responds to that request.
Current pension obligations contribute to overall university expenses, but do not specifically impact tuition, according to Ulliman and Boudouris.
“I wouldn’t single out this particular cost any more so than others in our budget at this point, based on the fact that our contribution rates have not changed and most of the cost increase here is variable and related to increased growth and demand in our programs,” Boudoris said.
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