(excerpts from the)


                                                                    May 6, 2004


                                                     A.  Category I Recommendations


            1.  Savings from organizational and policy changes: $ 1,265,000

            We recommend a number of policy and organizational changes that we believe could achieve significant savings without diminishing the University’s ability to achieve its core objectives.  Although some of these changes will create inconveniences for employees and administrators alike, these changes are not likely to reduce the ability of the University to fulfill its core missions.  We are also convinced that these changes can be structured in such a way that they do not cause undue hardship to particular persons or programs.


            Reduce maximum future vacation accruals to the annual accrual rate of 192 hours plus sick leave to vacation conversion as permitted by Iowa Code (up to an additional 96 hours)

                                             $  250,000 [1]


            Vest employer contributions to TIAA-CREF after 3 years of employment rather than immediately: 

                                              $  360,000 [2]


            Add qualifying Organizational Effectiveness expenses to fringe pool 

                                               $  280,000 [3]


Change employee flex credit allocation policy for spouses or domestic partners when both are employed by the University so that only one spouse/partner receives the additional flex credits available for married/partnered employees 

                                  $  175,000 [4]



            [1]  Current policy allows accruals of 400 hours.  Employees who have currently accrued more unused vacation time than the new proposed maximum should be allowed to retain all accrued hours.  The proposal calculates savings on the assumption that currently-accrued hours above the maximum will be retained by employees and will remain in place until used by the employee.  The new maximum is for future accrual of vacation time.  In addition, the University should implement any change in a way that is sensitive to the needs of families who are taking leaves pursuant to the provisions of the federal Family Medical Leave Act.  This new policy will create savings when employees leave the University to retire or for other reasons.  Current policy is to pay the unused leave time after the termination date.  Lower accruals will mean lower payments. 

            [2]  Under this proposal, the University will continue to make contributions to every new employee’s TIAA-CREF retirement plan, but the University’s contributions will revert to the University if the employee leaves the University before the completion of three years of service.  The employee’s own TIAA-CREF contributions would, of course, vest immediately and remain with the employee regardless of the length of service.  Special arrangements would need to be made for visiting faculty and lateral hires at senior levels who are already in the TIAA-CREF system.

            [3]  Currently, many of the expenses of the University’s Worklife programs are paid entirely from the General Education Fund, even though those programs are intended to, and do, benefit employees across campus, including employees paid from sources other than the GEF.  The GEF, in effect, subsidizes services for these non-GEF employees.  Shifting funding for these expenses to the fringe pool reflects the actual use of these programs, reduces the GEF contribution, and permits recovery of some of these expenses from external grant funding.

            [4]  Currently, if both partners or spouses work for the University, each receives the additional flex credits.  We recommend that only one partner or spouse receive the additional credits.