President Unveils Salary Freeze and Benefit Reduction

2006-05-30T16:38:00.000-07:00

President Welsh announced the first salary freeze and the first reduction in retirement benefits in the history of the University. This is a historic moment. Not once in the forty years of the University's existance has it been necessary to take such extreme measures to maintain financial integrity. The following is Dr. Welsh's message.

Dear Faculty and Staff,

The Board of Trustees recently confirmed the 2006/7 budget. As I outlined in my previous letter, we planned an operational budget that will bring us into balance over the next three years. I will not reiterate all the imperatives for reducing costs and increasing productivity that I described in my letter. Briefly, the rapidity of change needed for the renaissance we have undergone inevitably meant delay of the returns from our investments in the University, resulting in an operational budget shortfall. Accordingly, as we align the budget with our mission, this upcoming year will be particularly tough; we must reduce our operations by approximately seven million dollars. All of you have worked hard to find ways to budget towards this goal, and in doing so employed a number of the suggestions created by the task forces that worked so hard this past year. Measures have been taken that meant reorganizing some of our programs to reduce costs while maintaining effectiveness. In a few other instances this will mean that some of your dreams of new and progressive programs must be put on hold temporarily or slowed down. But commitments already made will not waver. In the next few weeks, you will be informed of a number of administrative changes resulting from the budget, important among which are those described below.

For a good number of years, University employees have enjoyed an exceptional thirteen percent retirement benefit, high by any standards. For this next budget year we have reduced this to ten percent, a figure that remains competitive with other universities in the region and nationwide. In addition, we will not be raising salaries this year. Instead, we will look for opportunities to provide year end bonuses if the budget exceeds our expectations. Attesting to this, and encouragingly, this past year has yielded a positive financial position because our investments have done better than expected. In the spirit of involving everyone in the success of our operations, I will distribute monies to the Deans and VPs to be used at their discretion for the provision of merit bonuses to faculty and staff. Those who qualify can expect to receive bonus checks of a lump sum before June 30. Senior administration will not be included. As a further enhancement, we are adjusting staff salary ranges according to the Hay Group assessment. We are increasing the lower range by five percent where the need for such adjustments has been identified. These salary raises will be paid beginning this budget year. The upper range also is being extended five percent, so that those already at the maximum range may become eligible for raises in the future.

I hope that you will realize these changes reflect responsible budgeting combined with a continuing commitment to identifying incentive opportunities. Thank you all once again for supporting the University as we continue to change and progress with success.

K. Michael Welch, MB, ChB, FRCP
President & CEO
ROSALIND FRANKLIN UNIVERSITY
OF MEDICINE & SCIENCE

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President Unveils Salary Freeze and Benefit Reduction