Retirement funds cut for faculty


Breanna Rae Weber

$1.4 million had to be cut from the budget this year.

Leah Ulatowski, Editor-in-Chief

Due to lower enrollment rates this school year, Lakeland College has reduced the percentage of funds added to employees’ retirement plans from 7 percent to 3.5 percent, among other budget cuts, in order to maintain a surplus of $1 million to demonstrate solvency.

Before the change, if an employee was willing to place 5 percent of their own salary into a retirement plan, the college would automatically add another 7 percent. According to President of Lakeland College Dan Eck, the percentage was reduced mainly due to the college having a smaller amount of student tuition funds to help achieve a surplus.

“We have a bond issue that was issued several years ago to use some money to do some construction on campus, and we have to make payment on that every year. It is akin to a mortgage on a house,” Eck said. “The bank that holds that debt requires us at the end of every fiscal year to show that we have a certain amount of surplus cash leftover—about a million dollars.”

According to Eck, the college’s annual budget is approximately $36 million. At the end of every school year, the college must have a surplus of $1 million to demonstrate solvency to the bank. With less student tuition, Eck says the college needed to cut $1.4 million from the budget in order to show the necessary surplus.

According to Eck, reducing the percentage of funds added to retirement plans was not the first budget cut. Prior to that decision, the college kept several open positions unfilled, did not provide as high of raises to staff as originally intended, delayed an information technology project and put a freeze on professional development for staff members. The college is also reducing printing expenses by putting material online, as exemplified by the digital version of the student handbook.

After scaling back in every area possible, Eck says the college still needed $340,000 to achieve the surplus. As a result, they looked at the 7 percent going toward employee retirement plans and decided to take it down to 3.5 percent for this year.

Contrary to some misconceptions, Eck says they are not taking the money to perform projects on campus but rather to ensure the surplus required by the bank. At the end of the year, if they have that surplus, it is the same surplus used to repair roofs, fix windows and buy computer equipment. According to Eck, the end result is that the money may end up going toward purchasing equipment for classrooms and the residence halls, “but it was not the reason that we took it from 7 percent to 3.5 percent.”

“We didn’t like to do it. We’ve told people that if we can save this money over the course of the spring, we will put it back, so help us look for additional savings,” Eck said. “I know it hasn’t been a popular decision.”

The change has been mostly unwelcomed by employees, especially those nearer to retirement.

“One thing the student body ought to know is that—despite whatever degree of disappointment, or even discontent, may exist—in no manner will this decrease in employee benefits slow down efforts of faculty and staff or affect their dedication to the individuals whom they serve,” said Karl Elder, Fessler professor of creative writing.

“The college is still paying 3.5 percent over the salaries, and I wish it was more,” Eck said. “We were doing 7 percent and learned that the average for private colleges in Wisconsin is 5 percent, so we’ve dipped below average and (set a goal) to get it back up there, but we just have to see how enrollment goes over the next couple years.”