Funny about Money

The only thing necessary for the triumph of evil is for good men to do nothing. ―Edmund Burke

Rumors start to fly

Oh, heaven only knows: maybe they’ve been flying for awhile and I just haven’t noticed, what with my nose tightly attached to the grindstone.

Over lunch with a friend, I happened to mention the rumor to the effect that Our Beloved Leader will shortly announce that everyone in my job category will be laid off. She said, “Well, that must have to do with the plan to convert all academic professionals to classified staff.”

Uhm… “Say what?”

Supposedly that’s the plan afoot. Academic professionals (the likes of moi) are exempt employees. Classified staff are nonexempt. “Exempt” means you’re exempt from a variety of state and federal rules that govern the degree of fairness with which you must be treated. So…why would you agree to take a job whose terms allow your employer to fire you with no reason, to shaft you with élan, to set you up like a 14-point stag in open season?

Why else? Money, of course. Exempt employees get paid more than nonexempt types in similar positions.

If they convert our positions to nonexempt classified jobs, then what they’ll have to do is can most of us and then make us reapply for our positions. This is because the university offers nonclassified slaves two retirement options: the state pension plan and a 403(b) plan. Classified (nonexempt) flunkies are eligible only for the state pension plan. The hook is that once you’ve selected one or the other, you can’t change! Ever. No, not ever, no matter what your beloved Dean says. So, the only way the administration can move an exempt employee who has selected a 403(b) as his or her pension plan to a nonexempt position is to have the person quit or be fired and then rehire him or her into a different job.

Cute, eh?

My job was originally advertised as a classified position at significantly less pay than my starting salary. When the hiring committee asked me what I would like in the new job, I said I’d like to keep my pension plan (little knowing, at the time, the significance of that seemingly innocent request). You could see the “uh-oh” in the collective mind: “And, uhm, ahem, which plan would that be?” When I told them I was enrolled in one of the 403(b) plans, they knew they were going to be forced to pay me a fair wage. Hence I started at about $8,000 more (in a 12-month job) than I was earning as a senior lecturer (in a 9-month job), rather than about $8,000 less.

🙂 

The state pension plan’s cost to the employee is significantly more than the cost of the 403(b): 9.6 percent of your gross pay, as opposed to 7 percent for the 403(b). Not only that, but it takes ten years to become fully vested! If you quit before you die in the traces, you can opt to roll over your contributions into an IRA; but you can’t roll over any part of the state’s contributions until you’ve been in the plan for at least three years, and even then you can have only a small part of them. You can’t get all of the state’s and your contributions until you’ve been in the plan for ten years. Understand: I’ve worked for the Great Desert University almost 15 years, but I would have to start anew in the pension plan. That would mean I would have to stay on the job until I’m 73 years old to retrieve all the money poured into the plan in my name. I would not reach even the lowest level of investiture until the year I’m eligible for full Social Security.

While the pension plan costs employees more, it obviously costs the state lots less. And you can be sure these “new” jobs will pay lots less, too. Chances of being hired back at your current salary are nil.

My job, slash-named “editor/publisher,” is ranked M51. The salary range for an M51 is $37,308-$59,948. The highest figure in that range is $2,550 less than I’m earning!

The nonprofit job I just applied for ranges in pay from $45,000 to $55,000. Interestingly, however, the proposed nonprofit employer pays the entire tab for the employee’s health insurance and dental insurance, and rather than gouging 9.6 percent out of your salary, it matches a modest 3 percent contribution to an IRA and leaves it up to you to decide where the rest of your retirement savings, if any, should go. Thus I could put 3 percent into the workplace IRA and deposit the remaining 4 percent to my Roth IRA.

A little arithmetic reveals that if I stay at ASU and continue to earn my present salary (highly unlikely), my net biweekly pay will drop $61 per paycheck, from $1,522 to $1,461 (as if the $220/month pay cut that happened with the switch from bimonthly to biweekly weren’t enough!). But if I go to the nonprofit and start at $55,000, my biweekly pay would be $1,459: a three-dollar difference.

Think of that. And what if the nonprofit organization is generous enough to pay bimonthly instead of biweekly? Well, then my paycheck would be $1,580, $58 per pay period more than I’m taking home from a salary that’s $7,500 more, the salary that GDU is paying me today!

Argh! Why does anyone keep working for this place?

Well, I’ll tell you why: I hardly work at all. Creative malingering—my own systematic scheme to avoid working at all costs—not only has failed to raise any eyebrows, it actually has resulted in higher annual review scores. Last spring I got a 4.5 rating on a scale of 4!!!!!

If I go to the proposed nonprofit, I suppose I’ll be expected to actually work. That could be depressing. I don’t know if I remember how.

The Continuing Saga…

1.Unemployment for Christmas?
2.Does any of this have meaning for individuals?
3.Rumors start to fly
4.On the trail of the elusive job
5.Beating the layoff stress

Author: funny

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5 Comments

  1. Pingback: On the trail of the elusive job… « Funny about Money

  2. I can’t understand why they even offer two different plans? I work for state government in Louisiana, and it was mandatory to put into the LASERs, their cute acronym for the state retirement pension, and they do have vestment rules, but you don’t pay Social Security taxes and there’s rules on how much SS you can draw out while you get LASERs. I didn’t learn all the details since I never paid much into SS with the other jobs I had, regardless of its solvency in twenty to thirty years.

    We also had the option of joining the 457(b) deferred compensation plan, which acts like a 401(k) or 403(b) without an employer match, but it isn’t an either/or set-up. I’m contributing to both, which means I’m saving 10% towards retirement (I’m planning to increase it as I get out of debt).

    It’s the either/or that confuses me, but at least you got a higher paycheck out of the deal. Granted, I don’t know how Louisiana universities have their retirement set-up since I have never worked at one at a higher level than a student job. It may be just like Arizona. *Shrug*

    Good luck with the job hunt. You’ve had enough problems at GDU to justify moving to a different setting of employment.

  3. Why the State of Arizona or any if its illustrious universities do anything is a little over my head.

    I think it has to do with the exempt status. People who are exempt (i.e., they can be fired at will, at any time, without reason) have the option of choosing a 403(b) plan, which is the nonprofit organization’s equivalent of a 401(k). At the time I started with GDU, various advisors suggested that a plan that gives you control over your investments was somehow better than a defined pension plan.

    If I’m understanding the legal mumbo-jumbo associated with the AZ state pension plan, apparently (! take this with a grain of salt) the state has an agreement with the feds that opts it out of the rule that says state government employees are exempt from Social Security. State of Arizona employees pay FICA and Medicare, whether they’re in the state pension plan or the 403(b).

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