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CSU Budget Office

Frequently Asked Questions: Salaries and Benefits

Benefits Formula

Have you considered how changing the employee/employer contributions would affect lower paid employees?
Yes, we have considered how the change in employee/employer contributions would impact the lower paid employees and are looking at different design plan options that could address this issue.

Please note that reductions of benefits and increased workload will result in faculty attrition and loss of valuable CSU knowledge assets.
We recognize that many of the options under discussion could potentially have a negative effects on our ability to retain both faculty and staff.

You mentioned that the pay and benefits reduction would have to be bargained. What happens with those employees who are not represented?
While the CSU has the ability to reduce the salary of non-represented employees, before taking any action that disproportionately impacts one group of employees, we would have to weigh all the consequences. A change in legislation is required for both represented and non-represented employees before the employee share of health benefits costs can be altered.

Cell Phones

Why not eliminate cell phones for executives and management and provide cell phones for on-call employees only?
The chancellor's office has conducted an inventory of cell phones across the system, and eliminated thousands of them used by a variety of employees. Many employees are required to be available outside of work hours, and need to be reachable via cell. It would be difficult and unfair to disallow cell phones or make employees pay for cell phones used for work purposes. It is a tool that employees need to do their jobs, much like the university-provided computer.

Executive Compensation

Why don't we eliminate extra perks for presidents such as housing, car allowance and/or cut the salaries of top administrators?
While the compensation paid to executives, as well as the perks provided such as car and housing allowance, have been the source of much interest and focus, they represent a tiny portion of the overall budget. The allowances provided to presidents are part of their overall compensation packages. Presidents are expected to use their homes on a regular basis to hold fundraising events and host public gatherings to support the university. The presidents and the chancellor took furloughs along with the vast majority of employees in 2009-10, and along with the majority of employee, sitting presidents have not had any compensation increase in 5 years. The Board of Trustees receives no compensation to sit on the board, and the total compensation for all of the presidents and executives combined totals approximately $11 million.

Faculty

Eliminate FERP. If people are ready to retire, they should retire. This would also allow the hiring of new faculty at lower salaries.
The elimination of FERP would have to be bargained. In considering whether to seek a change to FERP, the CSU would consider the issues raised here but would also consider the role played by the FERP in transitioning faculty to retirement.

Freeze sabbaticals (temporarily)
Under the collective bargaining agreement, the President can deny a sabbatical based on impacts to the campus budget. While denying sabbaticals has the potential to reduce our expenses, it comes with a potential cost that needs to be considered.

The list of "challenges" to Larger Class Sizes (May 8th PPT slide #10) is not exhaustive. Also, even taken objectively, my own experience is that it varies greatly by discipline not to mention student ability. How can this decision even be made on a systemwide basis?
The lists of challenges for the strategies identified in the PowerPoint were not meant to be exhaustive, and nearly all of the items presented have associated challenges and negative impacts. We recognize that a number of factors, including academic discipline, level, and mode of instruction must be considered in determining whether offering a class in a large size format is appropriate. In addition, campuses differ in terms of available classroom space and room sizes. Thus, the details of implementing such a recommendation would have to be determined by each campus.

Furlough

Consider doing what community colleges recently considered: Furloughs for MPP's.
While the university has the ability to furlough MPPs, we would have to consider all impacts of implementing a furlough just for this group, including impacts on retirement benefits. Such a program would also require a significant reprogramming effort by the State Controller’s Office; as the SCO currently has a code freeze while they prepare to implement a new payroll system, we would have to determine whether it could be accomplished.

I don't understand why reduction in pay is considered a permanent solution, while furloughs are temporary? With furloughs, at least the employees who have not gotten pay raises in 5 years will get something in exchange for their pay being lowered.
Furloughs, by their nature, are temporary solutions that could assist the university in bridging a short-term deficit but do not offer permanent reductions. A permanent cut in pay also saves the institution money in regards to benefits such as cost of retirement, cost of life and long-term disability premiums, while a furlough does not.

Is one furlough day a month under consideration and what would this generate in savings?
If the CSU considers furloughs again, the lessons learned in 2009/10 will be taken into consideration. While there were layoffs in 2009/10, and while there were impacts on some individuals' workload, furloughs did allow campuses to reduce their expenditures and helped the university bridge the challenges we faced with minimal permanent impact. A rough estimate is that a one day per month furlough could save about $130 million over a year if all employees participated.

What about furloughs?
If furloughs are considered, we will consider lessons learned in 2009, potential employee impacts on areas such as retirement benefits, and feasibility of implementation, as well as how the program might be structured. The terms of a furlough program would need to be negotiated for our represented employees.

Layoffs

Can we expect staff layoffs?
No decisions have been made regarding the need for staff layoffs. In prior fiscal years, as reported to the State legislature, The CSU’s strategic response attempted to balance multiple concerns and to preserve, as much as possible, the quality of the academic program, access to necessary courses, access to financial aid, faculty and staff jobs, and the financial and fiscal integrity of the university.

What about layoffs?
If employees must be laid off, the collective bargaining agreements address the rules that govern layoff procedures, and the university is committed to honoring those agreements.

Miscellaneous

What type of cuts will be made if Governor Brown’s initiative is not passed? Will CSU employees be required to the 4 day 9.5 hour or 38 hour work week?
Governor Brown’s proposals for state employees, including the 4-day work week and pay reductions, do not apply to the CSU. For represented employees, any changes to pay, furloughs, time base reductions, and other proposals that affect wages, hours of employment, or other terms and conditions of employment would have to be negotiated with the unions representing those employees.

It is now going on six years since any non-exempt staff have had a raise, and our management continues to give themselves raises (the latest 30% to one of our VPs.). We need to freeze management salaries immediately.
Although no employee group has received general salary increases, all employees continue to be eligible for salary increases associated with promotions and reassignments. As required by the Board of Trustees, salary increases for Vice Presidents must be reviewed and approved by both the Vice Chancellor of Human Resources and the Chancellor.

Other

Has there been consideration of limiting or eliminating landlines?
This option is not under consideration as a system-wide strategy at the present. In general, employees who have access to landlines use those lines to communicate internally as well as with students and members of the public. However, campuses are examining their business practices for efficiencies, which could include reviewing this area for additional opportunities for savings.

Pay Reduction

If salaries are reduced, how would that impact retirement amounts, at time of retirement?
An individual’s benefit formula is based on highest one-year compensation for those hired prior to January 15, 2011; for those hired on or after January 15, 2011, it is based on three-year compensation while employed. According to CalPERS, “Final compensation is your average full-time monthly pay rate and special compensation for the last consecutive 12 or 36* months of employment. We use your full-time pay rate, not your earnings. If you work part-time, we will use your full time equivalent pay rate to determine your final compensation. If you think there was another period of 12 or 36 consecutive months during which your final compensation was higher, let us know when you apply for retirement. We will use that time period to determine your final compensation.”

It was said that 1% reduction in employee compensation would lead to a $28 million savings. What monthly percentage increase in employee contributions to health or retirement benefits would be needed to achieve the $28 million savings?
Employees now pay about 3% of health premiums, on average.  This amount would need to increase to roughly 10% of the total premiums for medical, dental, and vision benefits in order to generate $28 million in reduced costs to the university. Note that the actual amount paid by a given employee would depend on the level of coverage and the plan in which the employee was enrolled.

With talk of pay cuts and cost of benefits increases, the responses have been that these issues have to be bargained. What's the effect on MPPs and Confidential employees who are not represented?
Pay and benefit reductions are not negotiated for these employees.

Retirement Contributions

Has anyone considered having the state defer paying retirement contributions into our PERS for 1 year?
Any modification would require agreement from PERS as well as legislation. Every year the state adjusts CSU's annual appropriation for changes in CSU contributions to PERS, and therefore this does not seem to be a suggestion that would benefit the CSU even in the short run.

Retirement Incentives

Has there been discussion of a golden handshake or offer retirement incentive programs?
Golden handshakes and other retirement incentives are not being considered. Implementing these programs have associated costs and savings would only be achieved if the positions of those individuals receiving a golden handshake were not filled.

Work Schedule Modification

Would going to a permanent 4 day work week, where staff work a 4/40 schedule and the campus is closed 3 days a week, be a good cost saving option? 
Closing campuses one day a week would not generate reductions in salary expenses but could generate reduced energy expenses for the campuses. However, any such closure would have to be weighed against the impact to students and services needed by the CSU community. Some campuses now switch to a four day work week in the Summer, but the impacts were considered too great to extend this arrangement to the Fall.

What about job sharing?
Formal job sharing arrangements are not currently recognized in our collective bargaining agreements and the details of such a program would be subject to negotiation. Reductions in time base are possible and could be used to reduce payroll costs.

What about working reduced hours?
This option is now available upon mutual agreement between the employee and supervisor.