Close to 200 Loyola University employees have one more week to decide whether to apply for early retirement as the school tries to offset a $7.5 million deficit caused largely by lower-than-expected enrollment.
University officials are aiming to cut about $1.4 million from the school’s payroll through the offer, and may have to consider laying off staff or reducing the school’s contributions to employees’ retirement plans if that number is not met, officials said.
“It’s a step-by-step process,” Loyola spokeswoman Meredith Hartley said. “We have to go through this one, and then we’ll know what we have to do next.”
Loyola officials began bracing for budget issues over the summer, as it became clear that the number of first-year students enrolling at the school would come in far below expectations. The 625 first-year students who enrolled this year ended up about 200 students short of the administration’s goals. But that drop, projected to cause a $9.5 million deficit, was somewhat offset by increases in other types of enrollment, particular at the law school and the nursing program, and the highest retention rate the school has seen in three years, Hartley said.
Overall, about 4,864 students were enrolled at Loyola this fall, a 4.3 percent drop from last year’s total of 5,086.
The early-retirement offer is the second phase of the university’s effort to tackle the deficit, following a hiring freeze put into effect earlier this year.
The offer applies to 102 standard faculty members and 91 other employees, out of the roughly 1,000 employees at the university. To be eligible for the offer, an employee has to be at least 55 years old with 10 years of full-time employment at Loyola.
Tenured faculty who take the deal will receive a year and a half of pay upon retirement. Other employees will receive a year of pay. In addition, all those who take the offer will receive full retirement benefits, including options for health, dental and vision insurance.
The administration will receive applications from those interested in the early-retirement offer between Dec. 16 and 18 and then will decide which employees are accepted over the following month.
The administration had initially set caps on the number of employees in each group of workers whose applications would be accepted, but changes made Friday by the board of trustees will allow more flexibility in that system, Hartley said.
Should the early-retirement program fall short of its goals, the administration will have to consider other measures, Hartley said. Those could include cutting the total number of employees or reducing the amount the school contributes to its workers’ 403(b) plans, she said. Loyola now contributes an amount equal to 8 percent of an employee’s salary to his or her retirement plans, she said.
“We won’t know, and the president won’t make a decision, until mid-January, when we know the full dollar amount of savings” from the early-retirement offer, Hartley said.
Editor’s note: This story was changed on Dec. 9 to reflect that “tenured faculty” rather than “standard faculty” are eligible to receive a year and a half of pay upon taking retirement, and to explain that the university makes direct, rather than matching, contributions toward employees’ retirement funds.