Present: Debbie Kaminski, Pat Search, Ron
Eglash, Joel Plawsky, Bruce Nauman, Achille Messac, Mary
Anne Waltz, Ning Xiang, Bill St. John, Jeff
Durgee, Bob Block, Tamar Gordon, J. Keith Nelson,
Sandy Sternstein, Bob Degeneff, Shekhar Garde
Not present: Chjan Lim, Cheryl Geisler,
Guests: Bud Peterson, Tom Willemain, Cheng Hsu, Lester
Rubenfeld, Edwin Rogers,
William Randolph Franklin, Christoph Steinbruchel, Henry Scarton, Gary Adams
Approval of the Minutes from the 9/8/2004
Faculty Senate Meeting
Pension Plan Modification Discussion
Nauman, President of the Faculty Senate
Kaminski, Secretary of the Senate
Economic Talking Points
of the Minutes from the 9/8/2004 Faculty Senate
With minor revisions, the Minutes were approved: 11 in favor, 0 opposed, 0 abstentions.
Plan Modification Discussion
Nauman, President of the Faculty Senate
President Bruce Nauman began discussion on the pension plan
modification. He stated that no
decisions will be made during the meeting but he would like to discuss whether
or not the proposed change to the plan is reasonable and what other options
there might be. Bruce made the Faculty
Senate aware of the proposed plan that Vice President for
Human Resources, Curtis Powell, and Rensselaer’s new
actuarial firm presented at a Faculty Senate
Executive Committee meeting. The
financial details of the plan could not be verified by the current actuaries
since they were hired as of July 1,
2004 and did not have time to assess the proposed changes. C. Powell and the actuaries agree on a
concept for setting pension values. The
monthly pension benefit depends on whether faculty select the fixed- or
variable-rate option. The value of the
benefit is calculated by the actuaries so that it will have the same actuarial
cost to the Institute regardless of which option is chosen. Thus, when it comes to setting aside and
buying an annuity, the concept is that the annuities represent equal costs to
the Institute. Regarding the variable
plan, Curtis Powell told the Executive Committee that the cost to the Institute
is disparate because the cost of buying the annuity for that plan is higher. Curtis’s plan for an 85% reduction in the
initial benefit is one way in which equality can be achieved. This is the principle with which Human
Resources is working and is referred to as “equal actuarial cost”. One option developed during the discussion
with the Executive Committee, which Curtis found interesting, makes the process
of fixing the benefit clearer. Curtis
proposes to use the existing formula and cut the initial benefit of the
variable plan to 85% of that of the fixed plan.
Bruce suggests there is another, equivalent formula: keep the initial
benefit at 100% and modify the set point of the variable plan to 8%. The actuaries have to study this to determine
if indeed it is equivalent. The idea
behind Bruce’s suggestion is if two people retire at the same time and both
have $1000 in benefits and one takes fixed and one variable, they both would
get $1000 in the first year but the following years’ benefits for the variable
plan would increase only if the stock market rises at a rate greater than
8%. If the market increase is less than
8%, those in the variable plan would receive less than their initial $1000
benefit. Mr. Powell will be attending a future Faculty Senate
Meeting to discuss the proposed plan changes and alternatives.
Kaminski, Secretary of the Senate
Debbie stated that under the current plan, upon retirement,
a person can elect to take their benefit either 100 % fixed and no variable,
100% variable and no fixed or selected combinations in between. The variable portion returns a benefit that
tracks the S&P 500 and benefits would depend on the performance of the
stock market. If a faculty member
chooses 100% fixed, the stock market performance does not affect their
benefit. Faculty take the risk of which
way the stock market will go.
The basic problem with the variable plan (according to Human
Resources) is that the stock market has returned more than the 5.64% break-even
(set) point that was established when the plan was started. The actuarial cost of the variable plan is
therefore significantly higher than the fixed plan. If someone can tolerate the risk to take the
variable option, the likelihood that those faculty will benefit is high. Since that likelihood does exist, there is an
increased burden on the Institute to fund the plan. The argument made by Curtis Powell is that
few faculty elect the variable option and not many at 100%. Therefore, to fund
the plan, the Institute makes a disproportionately large investment to benefit
a small number of people.
The proposed change is that the variable portion be
discounted by 85% initially. The
variable portion is the greater of:
a) (Benefit at retirement date) x (variable election %) x
85%. The claim is that this would bring
the actuarial value of the two elections more in line. OR
b) (Benefit on June 30, 2004) x (variable election %)
Under this new plan, the fixed election and the variable
election will have the same actuarial cost to the Institute and Rensselaer will
save $5 million in the short term and $200,000 per year in the long term. The FSXC
explored and suggested an alternate proposal and received some feedback from
Curtis Powell suggesting that it might be viable. It was suggested that the set point be
changed to a more realistic value such as 8%.
The 5.64% set point was selected several years ago by a financial person
from Rensselaer using unknown criteria and has produced an imbalance between
the two options. With this alternate
proposal, the variable portion of the benefit is not reduced initially and it
has the same characteristics as the original plan in that both the fixed and
variable options have the same actuarial cost to the Institute. Slides from Debbie’s presentation will be
amended to the minutes.
Debbie stated that whatever is decided upon, the principle
of equal actuarial cost to the Institute is fair. On the other hand, Rensselaer needs to fund
the pension plan adequately. By choosing
either option mentioned above for changing the variable plan, Rensselaer
does put less money in the plan. Under
the changes proposed by Curtis Powell, people retiring in the next 5 years who
planned to use the variable option would receive a smaller, initial
Les Rubenfeld, Director, CIPCE/Prof, Mathematical Sciences
suggested that the faculty needs some guidance from someone who is well-versed
in pension plans to translate how the changes will affect the faculty. He thinks the independent expert(s) should be
invited to the meeting where Curtis will be presenting the proposed changes. Debbie agreed that the faculty need
professional help to understand the changes.
Randolph Franklin, ECSE, believes that the information presented so far
only shows the plan from the Institute’s point of view. He suggested the faculty hire their own
experts and that the numbers provided by the Institute cannot be relied upon.
Vice President Achille Messac stated that the faculty can
advise, suggest, and comment on the plan, but have no power to accept or reject
the plan. Randolph thinks that by going
along with the proposal, the faculty are tacitly accepting it. He does not think the faculty have to
acquiesce quietly. Achille stated that
when he saw the proposal last year, he was not pleased either. He also emphasized that his comments above
are simply pertinent factual information that are germane to the discussion at
hand and do not express any particular view.
During several meetings, he has tried to review the changes on their
merits, and he does see merits to each side.
He understands why people may be against it. As for the Faculty Senate,
there is the issue of not having influence and power, but Achille hopes to win
back senate influence in a constructive way. Today’s presentation is to bring the issue of
changes to the variable plan to the Faculty’s attention. If the Senate decides to go forward with
further discussion, it needs to be done in a calm and reasoned way.
Senator Bill St. John asked if anyone on the Faculty
Senate Executive Committee had received a copy of the
actuarial report. Debbie stated she does
not have one and that she is merely presenting information from the recent
meeting with Curtis. Bill suggested a
request be made for reports from the last 5 years. He also asked what the annual contribution to
the retirement plan is. Bruce stated
that it varies significantly from year to year. Provost Peterson agreed that it
does vary year by year but since Curtis will be making a presentation on the
plan, he suggested that Curtis be asked to provide those details.
Edwin Rogers stated that
because there was a great deal of stress over the retirement plan in the past,
he was appointed to the retirement committee.
He agreed it is important to have a copy of the actuarial reports as
well as to enlist someone with expertise to interpret the reports. The variable portion of the plan came into
existence in 1988 when the retirement plan was in upheaval due to faculty
concerns over the Institute’s funding of the plan. In 1988, it was seen that Rensselaer had not
contributed to the plan for some years.
Moreover those who had retired were not seeing an improvement, i.e. a
cost of living adjustment (COLA), in their retirement benefit. The variable option was introduced in part as
an alternative to COLAs. By letting
people have a portion of their benefits rise and fall with the state of the
economy, there would be some protection against inflation and no need for cost
of living adjustments. As of 2004, for
those on the fixed plan, there has not been a cost of living adjustment for 13
years though there has been a 33% or more increase in the cost of living as
measured by the consumer price index (CPI).
It is important to build into the pension plan some kind of COLA that
would be reviewed on a periodic basis.
At this point, there is no provision for a COLA in the plan although
certain cost of living adjustments have been made, the last one being in 1991. Edwin
Rogers reported that those who chose the variable option have
done fairly well over this same time period though for those who chose the
variable option just a few years ago; their pension has diminished by 20%.
Debbie suggested that the Senate devise a plan that provides for equal
actuarial cost to the Institute to those who choose the fixed or variable plan
while at the same time, incorporating some systematic way to allow for regular
cost of living increases.
Les stated that we are not arguing over the particulars of
the plan, but more about the process used to implement changes to the plan, and
what is best for the faculty. He feels
that although the faculty may have no legal influence on plan changes, the
faculty need their own expert to offer advice on the plan. He feels it is the responsibility of the Faculty
Senate to represent the faculty. He added that all the facts need to be
presented. He would like Curtis to bring
to the next meeting on this topic, the demographics for the defined benefit and
defined contribution plans and the numbers of faculty and staff who are
presently enrolled in, or eligible for, the variable plan.
Provost Peterson asked that during deliberations the Faculty
Senate look not only at what is best for the Faculty, but
also what is best for Rensselaer’s future. Bruce stated that his role as President of
the Faculty Senate is to represent the
faculty. The Provost suggested that
faculty forward their questions to Bruce so that Curtis will be prepared to
provide the information at the next meeting. In response to sentiment that the Faculty
Senate has no influence, Bruce indicated that as a result of
feedback received from the faculty and the Faculty Senate,
the decision to alter the variable plan was delayed so there could be
additional discussion. This cost the
Institute is $5 million in short-term savings.
The Provost thinks that soliciting faculty input is what Curtis’s
intention is when he attends the Faculty Senate
Christoph said it seems that the main issue is how to
determine actuarial equivalency and no one knows how to do it. He gets the sense that the people in the room
feel that RPI can do whatever it wants.
He asked if the Senate has tried to obtain legal advice on how much RPI
can change the plan and how much of the plan is a contract between RPI and
faculty when those faculty are hired.
When he was hired at RPI, he was under the assumption that the pension
plan was a contract. Edwin stated that
if one were to review the Plan, Rensselaer does have the option to alter the
terms of the plan. There are constraints
imposed by government regulations. He
added that the faculty does have influence.
Les feels that this is not an issue of numbers, but of
principle. There are many in this room
who do not feel capable of interacting with C. Powell or the actuaries who
represent RPI. He would feel more comfortable
having someone in the room who understands all the ramifications to the faculty
of changes in the language of the Plan.
He is even unsure of what questions the faculty should ask. Les stated that there is a proposal on the
table that the Faculty Senate endorse and
support the need to have an independent expert who represents the interests of
the faculty and can interpret the conversation for the faculty. Bruce suggested that it be addressed as New
Bruce provided Economic
Talking Points to the Faculty Senate
in a recent email and asked that they be read into the Minutes without objection
and to be treated as read.
Provost Peterson had several comments and additional information
to present regarding the talking points. He thanked the Senate for allowing time for
his comments and hopes to have more discussion on the topic in the future. The
Provost’s document is available as an attachment.
The Faculty Senate put
forth a proposal for an outcomes statement.
The statement was to assert what the faculty’s goals are in regard to
educating our undergraduate students. The proposal from the curriculum
committee consisted of 22 points.
Initially, the faculty was to vote on each point separately but at the
Spring General Faculty Meeting, it was voted to put forth the document as a
whole. The document was voted on as
such, and did not pass. Therefore, there
is no outcomes statement. The Curriculum
Committee did their best and is now unsure how to proceed, so they have asked
the Faculty Senate to assume responsibility
for the outcomes statement. Bruce asked
the Senate as a whole to determine what statements are needed, what the faculty
wants to do, and what is acceptable.
Les suggested that a small subcommittee of the Faculty
Senate determine how best to proceed. He thinks there were multiple issues that
were brought forth that were disturbing and that it is important to know what
happened. Bruce asked what the faculty
would like to achieve rather than just why the document failed. Curriculum Committee Member, Christoph
Steinbruchel, said the main objection he heard is that people felt that these
outcomes were too specific that they told the faculty what to do. That perception is incorrect and the true
meaning of the proposed outcomes did not come through during the
discussions. The outcomes were to be
viewed as general goals and the schools and departments were to have latitude
in how to implement the outcomes.
Achille added that a potential reason for the statement not passing is
there was no indication of how much general control faculty would have and once
passed, would faculty have any control in how the outcomes would be
Bruce stated that the current mode of operation was to put
forth goals and then measure them. One
concern is that the outcomes were too specific and that no one knew how they
would be accepted or measured. The other
concern was how the assessments would be made.
Les stated that for a mathematics goal, once the objective is set, it is
the responsibility of the department to specify how it will be achieved and how
it will be measured. The outcomes (for
math) should not be to set specific mathematical content but to define what it
means to be a mathematician or an engineer.
Achille asked Christoph if his committee would find
additional information helpful and that the Faculty Senate
would provide additional guidance for the committee to continue their
work. Christoph said that perhaps they
would. He thinks the committee did not
make their point clear enough. For an
example, one of the outcomes which the committee thought was very specific was
that students should know what an algorithm is. For students in Computer Science and
Engineering it may mean they have to write a program, but for a student in
H&SS, it may be something different.
But after the process, the students have a sense of what an algorithm
is. The other issue is who the assessor
would be for the math goal in H&SS, Engineering or Architecture.
Jeff Durgee, Senator from
Management recalled that there were only a few of the 22 objectives that were
debated. Provost Peterson agreed that in
the discussion and on the Faculty Senate
website, there were some objectives that were well received and some that were
not. He believes one of the big
discussions was if this document passed, what did it mean, what is the process
by which the outcomes will be incorporated into the curriculum, and who will be
responsible for monitoring? The Middle
States Accreditation visit that will occur in spring 2006 requires that the
Institute have outcomes and that they have a mechanism by which the outcomes
can be assessed. The Curriculum
Committee tried to come up with global statements of what they felt all
students should have in terms fundamental knowledge. The process was never defined and Christoph
thinks that is what caused the angst. He
feels it is the responsibility of the Committee to address what the process is
by which the objectives will be measured and monitored, and that process be
Christoph said he realized what was put forth was lacking in
the process of how they would be assessed.
Therefore, people did not know what it would mean for them. However, if the committee had been asked to
define a process, people would view it as being told what to do. He thinks the outcomes process should be like
what the School of Engineering
is doing for ABET accreditation: each department has formulated goals and knows
how to assess whether they have been met.
If an outcome is that all students at RPI should have some fundamental
knowledge of life science, then faculty in Architecture knows what they will do
and it can be verified, for a different department, it would be a different
plan. The Provost agreed. If the faculty knows what they should do, the
department would determine what they have to do and how to assess it. He feels the Curriculum Committee should be
able to say if they do not think what a department is doing meets the
requirement. The department would state
the outcomes and the Faculty Senate Curriculum
Committee can determine if it is appropriate.
Debbie Kaminski believes there were too many objectives and
it would be difficult to assess each one individually to determine if they met
the requirements. Both Debbie and Tamar
suggested reducing and consolidating the number of objectives to only 7 or 8.
Keith Nelson thinks it is healthy for engineers to have
knowledge of biology. However, unless
the number of credit hours needed for graduation is increased or the number of
H&SS credits is cut, if Engineers are to also know biology, something will
have to be cut. Bob Degeneff said it is
important for Engineers to be able to listen, write, and speak, but was unsure
what to get rid of to also incorporate biology. Debbie agreed with Keith and
suggested that biology is important but asked where the credits would come
from. She asked whether total credits
should be increased to allow for it, or the H&SS core requirement be
decreased to expand the science core.
Tamar said that in her recent conversations, there is a
sense that the methodologies of sciences and engineering are overrepresented
and the humanistic approaches are underrepresented. It came up in recent conversations that there
are competing notions of what every student needs to have across the
board. However, students should be media
Bruce stated that a number of people think 120 credit hours
are too little. The Curriculum Committee
or Faculty Senate could suggest an increase of
4 hours or return to the 3-hour course. Tamar suggested getting rid of the
4x4. Bill St. John asked the Provost how
difficult it would be to revert back to the schedule before 4x4. The Provost said he did not get the sense
that the change to 4x4 was done easily.
Bruce suggests that the Curriculum Committee use the
guidance that 22 objectives are too many and to reduce them to 7 as well as
address and satisfy the items that can be assessed. Christoph said he will report to the
committee that there is some more guidance and see if they are willing to
address the outcomes issue again. He
said the committee spent a great deal of time on this issue and on plus/minus
grading. Bruce suggested that additional
members could be added or a subcommittee could be formed. Debbie said that it would be helpful to have
an alternate proposal and feels it will be difficult to pass accreditation
without an outcomes statement.
The Provost commented on the 128 credit hours, which is the
Institute cap. There exists a pseudo
limit of 128 credit hours. By just
looking at the requirements, he thinks the two issues are being mixed and feels
one cannot be solved without the other.
He has stated that he is not prepared to automatically increase the
number of credit hours to 132. Some of
the departments in the school of Engineering have incorporated additional
courses in their curriculum. He thinks
it would be a mistake to just automatically add 4 credit hours in order to add
Lester stated that as educators, the faculty are confronted
with depth vs. breadth philosophical issues.
4x4 was created to provide an in-depth experience by increasing the
number of credits per course but decreasing the number of courses. This group is trying to do both which he
thinks is virtually impossible. The
alternative is to go to a Brown University
concept and let the students take whatever they want. He thinks a compromise exists without
imposing additional requirements for biology or entrepreneurship.
Tom Willemain said that he is always frustrated with
students and thinks something is not right.
He feels the root of this frustration is that it seems that students are
not engaged in their learning. He finds
more and more students working outside campus and that these outside activities
erode their sense that their full time job is to be a student and receive an
education. He stated that at other
schools, students are excited about being in school. At RPI, students do not come in to learn
things on their own. The faculty are
trying to channel them into something to be interested in, but they are not
biting. He would like the students to
believe in themselves and believe that their future matters. Les agrees that if there is real excitement
and engagement between students and educators, students will not want to
leave. He thinks there is something
missing in the core culture of the Institute.
There are many who are engaged.
The Institute is seeing a manifestation of a core issue that will not be
solved in 4x4 or 2x2.
Henry said he did not learn in the same way as the students
learn now. They have TVs, a clicker
mentality, they flip from one thing to the next, and the faculty continue to
teach the same way though the students are learning differently. He thinks the faculty have to adjust and that
they need to stay current with laptops, etc.
Cheng Hsu agrees that the faculty are a part of the problem. He confines himself to the core curriculum
issue and the notion of the core curriculum, but at other schools, more
emphasis is put on making the core work. Rensselaer tried
to do it on the cheap. If Rensselaer
is serious about the curriculum and life science for everyone, the curriculum
needs to be looked at globally, from the Institute-wide perspective.
The Provost thinks there can be no single issue that is more
important to the Institute and for the Faculty Senate
and faculty to be involved in, than to determine how to facilitate learning and
to get the students to be more engaged.
When thinking of outcomes, the 22 were too specific but they should
focus on issues for students that are engaged.
He is pleased that the Faculty Senate
is having a discussion on what is to be done and how to ensure that the
students are more engaged.
Les stated that the Provost made the point about the issue
of culture and engagement of the students.
He thinks it is important for the Faculty Senate
to address it, and if it isn’t, they are remiss in their responsibilities. He feels the Faculty Senate
will have support from the Provost if a campus-wide way to discuss the issue of
engagement is structured. He said it is
different than curriculum, but the two are linked. President Nauman said it requires some
discussion and it should be discussed as a topic for a future meeting. The agendas for future meetings have not been
determined and he requested suggested topics are emailed to him.