Adjunct Insecurity

From Inside Higher Ed:

Adjunct faculty members don’t have a lot of power on most campuses, especially if they aren't part of big collective bargaining units. But adjunct faculty members and other temporary employees at the University of Memphis just skirted what many saw as a cut to their retirement benefits, with the help of their small union in state where it lacks the power to engage in collective bargaining.

“We are viewing this as a big victory since, as far as we can tell, this has never been an issue before,” said Steven Payne, a graduate student instructor in anthropology at Memphis and member of the United Campus Workers-Communication Workers of America chapter. “No one has ever said, ‘This is a problem, you can’t implement this program.’”

In mid-December, as the campus cleared out for the holiday break, the university announced that it was making changes to its retirement plan for temporary employees, including hundreds of adjunct instructors, and that it would need to lay off and rehire all of them. For adjuncts, who are technically rehired every semester – even those who have been working at the university for many years – the idea of getting laid off was jarring, but not that different from what they experienced when contracts expired.

Many were concerned about changes to their retirement contributions, however. Currently, employees contribute 6.2 percent of their taxable income to Social Security, which the university matches. With the proposed changes, temporary employees would no longer contribute to Social Security at the same rate (but would still contribute 1.45 percent to Medicare) and instead automatically be enrolled in a new “Temporary Employee Retirement Plan.” Under that plan, the university would stop matching the Social Security contribution and employees would contribute 7.5 percent of pre-tax pay to an individual, private retirement account. In informational material, the university said the change benefited employees because they had “full control of the investment options” and were eligible to withdraw retirement funds upon leaving the university, even before retirement.

The plan, which is technically a Federal Insurance Contributions Act (FICA) alternative, was made possible by the Omnibus Budget Reconciliation Act of 1990. The law changed the tax code to allow public employees classified as temporary, seasonal workers in new positions, to contribute to private accounts instead of Social Security. A number of colleges and universities, particularly in the South, have moved to adopt them in recent years for adjuncts and other contract employees, where union density is low and where some states – including Tennessee – bar collective bargaining for public employees.

Although FICA alternative plans for adjuncts aren’t new, there has been little to no blowback at other campuses. Experts attribute this to the difficulties associated with organizing adjuncts generally, and in right-to-work states in particular, along with widespread confusion about adjunct retirement benefits. Many adjuncts, especially those who work at different institutions, don’t know what, if any, retirement benefits to which they’re entitled; college and university plans don’t tend to be generous but do vary. Some employees also find privatized retirement preferable, since the plans offer more flexibility than Social Security.

But at the University of Memphis, a public institution where just 10 percent of eligible employees are paying union members, there was some outrage. Adjuncts and other temporary employees said they objected to what they saw as a disingenuous information campaign surrounding the change. For example, they said, individual adjuncts could travel with their accounts, but if balances got too low, banks would begin to charge maintenance fees (although those fees are nominal), and there are taxes upon withdrawal. The change also amounted to small monthly deduction in take-home pay, of a few dollars. Faculty members said, too, that private retirement accounts demanded a degree of financial literacy and a time investment not required by the current plan. But most important, opponents said, the change would likely make more adjuncts ineligible from drawing on Social Security down the line, since 40 fiscal quarters of active contributions are required to ever benefit.

“This is has a significant impact on their retirement,” Payne said of his colleagues. “Adjuncts and temporary workers already are the most vulnerable workers at the university, and the lowest paid, and the least likely to be able to maintain a comfortable lifestyle in retirement” without Social Security.

Read the full story here.