Organizing Committee Scores University's Pension Formula

Members of the Harvard Employees Organizing Committee yesterday criticized Harvard's pension plan, chiefly because the plan's payments are not tied to a cost-of-living index.

Ronald E. Burns, a technician in the Physics Department, told the group that he felt it was "clear that in general employees are upset about the plan" which was instituted July 1, 1973.

He added that the "resentment is focused not so much on the plan as on how employees feel they have been treated by the University."

Burns said Harvard's plan is not compatible with social security policies, because the government's retirement program ties its benefits to changes in consumer prices each year.

The level of pension benefits under Harvard's plan is dependent on the amount of social security an employee is entitled to, but once fixed at the time of the employee retirement, Harvard's payments do not increase to compensate for inflation.

Joan Bruce, manager of benefit administration, said yesterday that the plan's objective was to provide employees, both faculty and staff who had served more than 25 years, with pensions between 70 and 80 per cent of their final take-home pay.

Claire C. Borguet, a research assistant at the School of Public Health, told the group that one of the major flaws in the Harvard plan was that it has no floor on pension payments, unlike employee benefit plans at other local corporations.

Borguet said it is ironic that employees are told when they are hired that high retirement benefits will compensate them for low pay, when those benefits are actually tied to the salary level.

But Bruce said that since social security is aimed primarily at those in lower income brackets, employees who are now receiving lower salaries will receive a greater percentage of their pension from social security, and will thus have more flexible pensions than those receiving higher salaries as the cost of living rises.