move could reduce faculty retirement benefit
of several budget cuts Gov. Jim Gilmore proposes for the second
year of the 2000-02 biennium -- because state revenues haven't
risen as much as expected -- could lower statewide faculty retirement
benefits, U.Va. financial administrators told the Board
of Visitors at a Finance Committee meeting Jan. 19.
measure would decrease the amount of the state's contributions
for almost 80 percent of faculty, who choose an optional retirement
program. The governor's plan would reduce the current contribution
rate of 10.4 percent for the optional retirement program to 9.24
percent, the same rate applied to the Virginia Retirement System.
University is looking at several options to make up the difference
if the move does get passed, said Melody Bianchetto, U.Va. budget
two plans differ in how the retirement benefit is calculated.
The VRS plan for classified employees is a defined benefit plan,
based on years of service and salary. But the faculty's optional
retirement plan is based on a defined contribution, which affects
the eventual amount of the retirement benefit. The state contributes
a set amount every pay period.
offered an example of how the reduction would affect a faculty
member. Assuming a 2001-02 faculty salary of $81,500 for a faculty
member aged 40, if the faculty member gets an annual salary increase
of 4 percent and retires at 65, and the return on the retirement
plan investment is 8 percent, retirement assets would be almost
the contribution rate the same for both plans is like comparing
apples and oranges, Bianchetto said. U.Va. administrators plan
to explain the impact to legislators and the governor's staff.
The measure does not preclude institutions from subsidizing the
state contribution. If it passes, the University would have to
come up with $541,149 to make up the difference.
Although the governor's budget provides for faculty salary increases
averaging 3.4 percent, U.Va. would not rise to the 60th percentile
as intended and already has slipped back to the 48th percentile,
said U.Va. Vice President
for Management and Budget Colette Sheehy.
noted that the State Council of Higher Education for Virginia
recommends a 6.4 percent salary increase to move U.Va. to the
ought to find a way to keep ourselves where we are now and then
get ahead, not to let the state out of its obligation," said board
member William H. Goodwin Jr.
legislative proposal that would allow the Medical Center to keep
the interest on its medical revenues -- rather than that money
going to the state treasury, as it currently does -- passed out
of the House Appropriations Committee Jan. 30. The change would
add more than $4 million to the center's operating margin.
housing rate to increase
board approved increasing student housing rates by 5.8 percent,
which includes a special fee that eventually will be used for
The increase would raise the University's average housing rate
to $2,260 for 2001-02, still below the statewide average.
The new fee, starting at $50 this fall and increasing by $50 for
the following two years, is intended to build up the maintenance
reserve fund, Sheehy said. The surcharge will generate $1 million
for renovations, for a total of $4 million. It will be used for
making improvements to the Alderman Road dormitories and Lambeth
Three new professorships were established at the January board
meeting, bringing the total number of endowed professorships to
Bigelow Research Professorship in Business Administration is a
gift of E. Thayer Bigelow Jr., a 1967 Darden alumnus who chairs
the Darden campaign, with additional funds coming from the Batten
Family Leadership Challenge.
endowed professorship established in the School
of Architecture was named in honor of Professor Emeritus Mario
di Valmarana, who retired last spring after teaching at U.Va.
for 28 years. The chair was made possible by gifts from friends,
former students and the Center for Palladian Studies in America.
Valmarana started one of the University's first study-abroad programs,
which still sends students to Italy.
brothers who graduated from the McIntire
School of Commerce and their father made gifts to establish
the Murray Research Professorship. James K. Murray III graduated
from the Commerce School in 1985 and Michael Murray graduated