The University Record, January 31, 2000

Assembly Roundup

Editor’s Note: Click here for an article on the University’s salary program and the tables that are referred to in this article.


By Theresa Maddix

Chair Sherrie Kossoudji opened the Jan. 24 Senate Assembly meeting by reading a statement that was critical of the manner in which the University released salary information on Jan. 21.

Referring to the press release and accompanying tables, Kossoudji said “there is an inherent distortion running through this press release that misleads the public. The University knows that this information will be used to assess the health and well-being of the campus community. The University also knows that its method of reporting has made staff, faculty and administration salary raises appear to be reasonably comparable.”

In its press release, the University reported that faculty salary increases averaged 5.9 percent, staff increases averaged 3.9 percent, merit increases for the executive officers averaged 5.74 percent and merit increases for deans averaged 4.55 percent. The number reported for the deans did not take into account market adjustment increases received by six deans, which ranged from 10.12 percent to 20.88 percent.

Kossoudji said faculty should consider three issues in reacting to the salary information:

  • That information released internally was more restricted than that issued publicly.

  • That averages, “notoriously slippery measures,” were used, rather than median raises.

  • That the University “reported different averages in its press release, reporting, for example, all salary increases for faculty but only merit increases for deans.”

    “In the dean’s salary sheet, we find that five of the 14 deans received an average 17.6 percent increase. If the University noted that the average for the 36 percent of the deans who received market adjustments was 17.6 percent and the average for the 64 percent of the deans who did not receive market adjustments was 4.6 percent, we would have better information.

    “We are left wondering about the same breakdown for faculty,” Kossoudji said. “Without more meaningful information, we can do nothing but speculate. So let’s assume that the faculty look and act like the deans,” with 36 percent receiving market adjustments, making their increases 3.82 times higher than the raises of the 62 percent who received only merit increases.

    “Given the average raise of 5.9 percent,” Kossoudji said, “this means that market adjusters received average raises of 11.3 percent and the rest of us received raises of 3 percent.

    “What else is missing in this report? We don’t know. But one message in the University’s raise strategy is clear. We should all go out and get outside offers. Otherwise, the University can’t figure out how good we are.”

    Tenure guidelines

    The Assembly also voted to approve the Tenure Document Revision as presented by Charles Koopmann Jr., chair of the Tenure Committee. Koopmann summarized the document, indicating that it addresses the “lack of standardization between units within the University.” He also said the document protects the rights of faculty under consideration for tenure and strengthens the “role of faculty in tenure decisions.” The document is a proposed revision of the Standard Practice Guide section, “Guidelines Related to Tenure Reviews and Reappointment Reviews” (Number 201.50).

    The Revised Tenure Report is on the Web at www.umich.edu/~sacua/.

    Benefits

    Assembly vice chair Lewis Kleinsmith gave an update of Benefits Policy Advisory Committee discussions, focusing on imputed income of life insurance and drug benefits.

    Kleinsmith reported that each December, University employees have a line on their pay stub for “group insurance income.” He said the number reports “phantom income you don’t really get, but do pay income tax on” for life insurance beyond the basic $50,000. The number is “the IRS estimate of what that life insurance would be worth on the open market if somebody gave it to you.”

    Because employees are paying approximately 90 percent of the life insurance costs, Kleinsmith said, “I estimate that this has cost the faculty over $3 million in unnecessary income tax since 1993. It has also cost the University $1.4 million of unnecessary FICA.”

    Kleinsmith has presented the benefits committee with a choice of a restructured non-optional policy removing all imputed income. “Indications are everyone would gain from this.”

    The benefits committee also is discussing ways to deal with increased prescription drug costs—rising at a rate of 15 to 20 percent a year. “Something has to change,” Kleinsmith said. “Two general approaches for dealing with increased drug costs are either that the faculty and staff pay more” or that they exert control as to which drugs are paid for by insurance.

    “There is discussion going on to combine all the drug benefits into one provider that administers the drug benefits, no matter what health insurance you have,” Kleinsmith said. Under discussion is the possibility of “setting up a committee housed in Wolverine Tower made up of physicians and staff members of the University who would make decisions on what drugs you could or could not have reimbursed.”

    Senate members commented that HMOs already place restrictions on prescription purchases and said that they “may not have the full story here.” Kleinsmith was asked to provide a chart explaining what the new plan would mean in practical terms. He responded that the plan is only in the philosophical stage and hasn’t progressed far enough to be able to provide charts.