In addition to establishing a number of subcommittees and recommending a handful of resolutions to other committees, committee members revisited the ongoing issues surrounding the university’s retirement plans, at the University Senate Faculty Affairs Committee meeting on Sept. 19.
Faculty and staff at Georgia State currently have two major options in terms of retirement plans, the state-operated Teachers Retirement System (TRS) of Georgia or the privately-held Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA-CREF).
“Both have their benefits,” Robert Maxwell, chair of the Faculty Affairs Committee, said. “TRS is easier to manage, always yielding, always growing. The other system is more hands-on, but more vulnerable to market fluctuation. So, it’s really kind of a personal decision where you want to go.”
Most new faculty members often opt for the private TIAA-CREF, but once someone receives tenure, the TRS, because of its built-in inflation adjustment and how it rewards long-time employees, is the more attractive plan. For example, after 30 years of employment, a TRS retiree can receive 60% of their salary annually for the remainder of their life.
The issue, Maxwell said, is that there is currently no way for a faculty member to switch plans.
“Some people have been pushed to one or the other based on their human resources department and onboarding, and there’s no way to switch,” he said. “So, if you’re kind of pushed toward one without all the information, you’re stuck on that system.”
The issue is hardly new. Maxwell said discussions about enabling faculty to switch plans has been ongoing since he joined the University System of Georgia in the ’90s. But University Senate members have been attempting to push the USG Board of Regents to take on the issue.
The Faculty Affairs Committee and the Senate Budget Committee have been crafting a resolution urging the Board of Regents to take a look at its retirement plans and correct inequities between them.
For example, when changes are contemplated for the TRS, there is a committee representing hundreds of TRS retirees and employees that can advocate or push back against the proposed changes. No such committee exists for the TIAA-CREF. Adding an advisory committee is one of the proposals the University Senate is including in its resolution to the Board of Regents.
Originally, the resolution included language that asked Jerry Radcliffe, vice president of finance, and Georgia State University President Mark Becker to advocate for faculty members to the Board of Regents. Radcliffe pushed back against that, stating that he and Becker already do address the policy inequities, primarily how the divided system affects the financial and structural integrity of both systems.
“Nudging people into TIAA-CREF hurts the stability of TRS,” Maxwell said.
State legislators have been attempting to stabilize the TRS fund in recent years with nearly $600 million in investment, according to The Atlanta Journal-Constitution. Last year’s legislation, H.B. 109, which sought to increase staff contributions and limit early retirees receiving full pensions, was met with resistance from those concerned that changes to the retirement system would hurt school systems’ ability to recruit and retain teachers. The bill later stalled during the legislative session.
Instead, Radcliffe suggested to the Faculty Affairs Committee that they restructure their argument in the resolution. Rather than emphasizing the inequity in how employees are added to each system, the committee should turn to how current policy affects faculty retention, he said. The Senate Budget Committee officially charged the Faculty Affairs Committee with researching and adding in that argument.
“All universities struggle with retention of faculty. This is one aspect,” Maxwell said. “If you get a job, you’re going to look at the benefits you get, and if the benefits of Job A are not comparable to Job B, you’re going to pick the one with the better benefits.”
The Faculty Affairs Committee plans to refocus the resolution on the employee recruitment and retention challenge the current retirement policy creates. The Board of Regents hearing that perspective from a university senate lends credibility to the argument, Radcliffe advised the committee.
“That’s the whole idea here: would this change actually make the system schools, and in particular GSU, more marketable to higher-end faculty?” Maxwell said. “Could we attract new people if we gave them more options or some choice to change?”
