New Paper on Pension Reform in Public Higher Education Published on eScholarship
Former UC Berkeley Vice Chancellor for Budget and Finance and CFO James A. Hyatt examines long-term fiscal prospects of university retirement programs.
BERKELEY, CA, December 21, 2015–The Center for Studies in Higher Education, UC Berkeley, has launched a new publication series, titled Berkeley Center for Studies in Higher Education Studies and Proceedings, on California Digital Library’s eScholarship component. The first paper in the series presents findings from research, conducted by James A. Hyatt, that addresses growing concerns about the long-term viability of university retirement programs. The study, titled Pension Reform in Public Higher Education funded in part by a grant from Fidelity Investments, examines changes to retirement and post-retirement benefit programs around the country. James A. Hyatt is the Associate Director and a senior research associate and principal investigator at the Center for Studies in Higher Education.
In recent years, severe economic conditions have caused come colleges and universities and state and local governments to significantly alter the structure and funding of their employee retirement programs. Changes include moving from defined-benefit to defined-contribution programs and increasing employee or employer contributions. The changes have meant reduced benefits or increased retiree contributions. Some states and institutions have chronically underfunded employee retirement programs, creating significant future financial liabilities.
“The goal of the project,” Hyatt states, “is to document best practices in structuring and deploying systems in higher education, to gain better understanding of the governance structure that supports higher education pension systems and to provide an overview of the various options for restructuring higher education pension systems.”
In his paper, Hyatt discusses how programs are funded, the types of programs and benefits offered (such as defined- benefit or defined-contribution programs), and whether health benefits are an employer and/or employee-funded component of retirement programs.
Hyatt’s study comprises three major components:
- A review of pension programs in higher education and the major issues facing these programs at both the state and the institutional level.
- A national survey of public multi-campus systems and institutions, governments, and other providers of retirement and post-retirement benefit programs. The survey provides information on how these organizations have restructured their programs to meet rising costs and decreased revenues.
- A description and analysis of best practices through case studies of pensions and post-retirement benefit programs at both the governmental and the institutional level
Why is pension reform an important issue in higher education? Hyatt states:
In the case of public colleges and universities, funding of pension liabilities competes with other state funding demands, such as public safety and infrastructure. In periods of fiscal austerity, this has frequently resulted in under-funding of pensions. It is therefore important for states and institutions of higher education to find ways of maintaining the fiscal viability of their pension programs.
James Hyatt is the Associate Director and Senior Research Associate at the Center for Studies in Higher Education, UC Berkeley; and former Vice Chancellor for Budget and Finance and CFO at UC Berkeley. Hyatt has extensive experience both as a senior-level executive at a number of the nation’s major research universities, including UC Berkeley; the University of Maryland, College Park; and Virginia Tech, and as a principal investigator on externally funded research projects in the areas of higher education financial management, financial reporting and campus safety and security. From 2008-2010, Hyatt served as the President of the World Institute for Disaster Recovery Management. He is a recipient of the Berkeley Citation for distinguished achievement and service to UC Berkeley. Hyatt received both his bachelor's degree in English and his master of business administration degree in accounting and operations and systems analysis from the University of Washington.
Center for Studies in Higher Education (CSHE) was established in 1956 and was the first research institute in the United States devoted to the study of systems, institutions, and processes of higher education. The Center’s mission is to produce and support multi-disciplinary scholarly perspectives on strategic issues in higher education, to conduct relevant policy research, to promote the development of a community of scholars and policymakers engaged in policy-oriented discussion, and to serve the public as a resource on higher education. http://cshe.berkeley.edu
eScholarship is California Digital Library’s research component that provides a suite of open access, scholarly publishing services that enable departments, research units, publishing programs, and individual scholars associated with the University of California to create and disseminate their scholarship.