Letter from Diane Peck
January 12, 2006
Dear Faculty and Staff Members,
As you may be aware, negotiations between representatives of the SEIU and the university are continuing. The union requested these negotiations as part of a "re-opener" clause in the current contract. Except for those issues now being discussed, the contract is in effect through August 31, 2006.
Contract negotiations are always challenging. However, I want to assure you that Stanford remains committed to treating all of its workers fairly and with respect. That means providing fair compensation and competitive benefits. Whatever the outcome of the current talks, that commitment will remain strong.
The negotiations (and some of the union's claims) have raised certain issues that we feel are important to address.
Let's look at the total compensation package
Just like wages, benefits cost real money and have to be understood as part of total compensation. On average, for every $100.00 in wages Stanford pays an employee, it pays an additional $31.00 in benefits. The combination of benefits provided to all Stanford employees demonstrates that Stanford is a market leader. Stanford provides:
- 100% of the health care premiums of the lowest-cost plan for the employee, or 82% of the premium of the lowest-cost plan for the employee and family.
- 100% of the dental premium in two different plans.
- A retiree medical benefit (only 25% of California employers offer such a benefit).
- Up to $5,000 in childcare assistance.
- Up to $5,250 in tuition assistance for the employee.
- Up to $15,000 per child in college tuition benefit for the employee's children.
- Free long-term disability insurance.
- Up to $50,000 in life insurance at no cost.
The university's position on pension plans: moving forward, not backward
The union has asked the university to expand the defined benefit pension plan (SRAP)* that remains in force for a minority of current bargaining unit employees. In response we have proposed to increase the base earnings year for SRAP to 1994 (from 1992), which will increase the benefit. However, most companies are moving away from these types of plans. In fact, several notable companies have not been able to keep the retirement promises they made to their employees. We have not proposed reducing the benefits that our defined benefit plan provides. However, the future is in defined contribution plans, and the Stanford plan (SCRP)**, which covers the majority of university employees, is where our focus will remain.
Stanford's SCRP is twice as valuable as most similar plans
Plans like SCRP are becoming more and more the standard. The vast majority of university employees are in this plan. The university contributes up to 10% of the employee's salary into the plan on the employee's behalf (5% basic contribution plus up to 5% in matching contribution.) In other words, for each dollar the employee saves, Stanford contributes two. That contribution is higher than contributions by most other universities and private employers as well.
Responsible stewardship of the university is our goal and responsibility
One of the hallmarks of our institution is that we provide the same basic benefits to every employee-staff and faculty alike. We know that 50,000 people a year apply to work at this institution-a clear demonstration that Stanford is a great place to work. We are also charged to be responsible stewards of the university's resources-to make decisions about benefits that meet our employees' needs without compromising the university's long-term mission.
Sincerely,
Diane Peck
Executive Director of Human Resources
*SRAP = Stanford Retirement Annuity Plan
**SCRP = Stanford Contributory Retirement Plan