Faculty Senate resolutions call on NU to create rainy-day fund, restore lost retirement contributions


Daily file photo by Catherine Buchaniec

Rebecca Crown Center. Faculty Senate recommended the University and trustees create a rainy-day fund within fiscal year 2021 at its May meeting.

Isabelle Sarraf, Print Managing Editor

Faculty Senate passed a resolution calling for Northwestern and its Board of Trustees to provide benchmarks for University finances that would prompt a suspension of retirement contributions on Wednesday.

Last May, the University announced its contributions to retirement plans would temporarily halt due to an anticipated $90 million pandemic-related budget shortfall, claiming the suspension would help offset the deficit. NU didn’t resume retirement contributions for faculty and staff until Jan. 1, and saw an unexpected $83.4 million budget surplus in fiscal year 2020. 

Faculty recommended the University and trustees create a “rainy-day fund” within this fiscal year — separate from its $12.2 billion endowment — to address future financial shocks without having to implement significant cuts across faculty and staff. 

Faculty Senate’s Executive Committee was informed on April 14 that the Board of Trustees didn’t view COVID-19 as a “once-in-a-century shock” to the University, instead comparing the pandemic to the subprime mortgage crisis and Sept. 11 attacks. 

The resolution noted that the University had made special draws in recent years. However, it stated that the communicated stance from the Board of Trustees indicated the pandemic was not severe enough to warrant such a draw.

Last May, University President Morton Schapiro announced the endowment payout rate would temporarily increase from 5.2 to 6 percent to offset budgetary struggles, but would not recommend the Board of Trustees raise the rate further.

Faculty Senate also passed a second resolution asking the University to restore lost faculty and staff retirement contributions and additional spending and staffing, given NU’s budget surplus.

“The University and its Board did not suspend faculty and staff retirement contributions following previous shocks, economy-wide or otherwise, but did for the pandemic, and by doing so unilaterally rewrote the implicit contract between the University and its faculty and staff,” the resolution read.

A previous version of this article misstated the nature of the University’s draws from its endowment. The Daily regrets the error. 

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Twitter: @isabellesarraf

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