Update on Employee Retirement Benefits and University Finances
To: Faculty, Other Academic Appointees, and Staff
From: Paul Alivisatos, President and Ka Yee C. Lee, Provost
Subject: Update on Employee Retirement Benefits and University Finances
Date: November 5, 2021
Throughout the COVID-19 pandemic, employees across the University have worked tirelessly and sacrificed to advance our mission, manage costs, and extend the vital impact of the University. Thanks in large part to this dedication, we are pleased to announce that the University’s finances ended fiscal year 2021 with a substantially lower deficit than originally projected.
The overall deficit for FY2021 was $28 million, a marked improvement compared to the original projection of $150 million. The lower figure was the result of effective management of costs as well as reduced expenses for travel, events, and other operations affected by the pandemic.
Considering this improved financial situation, we are taking steps beyond the reinstatement of employer retirement contributions, which took effect July 1, 2021. The University will make a one-time, additional contribution to ERIP and CRP intended to replace the employer contributions that were suspended from January 1, 2021, through June 30, 2021.
Each employee’s additional employer contribution will be calculated based on the employee’s 2021 compensation (and for ERIP, their voluntary employee contributions, if any). The employer retirement contribution will take into account employer contributions already received for 2021. Eligible employees who are employed by the University on December 31, 2021, will receive these amounts in January 2022 as a one-time employer contribution for 2021 in their 403(b) plan retirement accounts. Employer contributions are subject to IRS limits for 2021. Information about the University’s CRP and ERIP is available on the Benefits area of the UChicago Intranet, and FAQs related to this announcement are also available.
The University continues to face financial challenges, including effects of the $208 million operating deficit from FY2020. Bringing our finances back into balance will require continuing discipline in spending, even as we work to advance an ambitious agenda in research, education, and other areas.
The shared commitment of our community has enabled this restoration of benefits. Thank you for your ongoing work to help our intellectual community surmount the obstacles of the last two years, which will allow the University to look to the future from a position of growing strength.