COVID-19 Planning

April 29, 2020

Dear members of the Mount Holyoke community,

These are anxious times, for us all and for our families, for our community, and for Mount Holyoke. The COVID-19 pandemic has brought profound change to our lives and to our beloved College. The virus continues to spread in Massachusetts, across the United States, and around the world, creating acute illness in some, and leading to devastating loss of life. Our thoughts are with those of you who may be at increased risk, sick or recuperating, who are caring for others, or who are mourning loved ones. Please know that we are thinking of you as you confront challenges and uncertainty in your own lives, and as you continue your studies or your work at this remarkable institution. In these most difficult times, I continue to be inspired by the resilience and goodwill of so many, and by the adaptability and creativity that is sustaining learning and our community. Thank you for all that you continue to do.

With each week that goes by, I look for signs that we might tether our planning to some certainty, or plot with a degree of confidence a few coordinates on the map to a return and recovery. I know that many are hoping for answers, but it is still too soon to say with confidence when we might resume our work in person, or gather again. By its very nature, Mount Holyoke is about global human interaction and a distinctive education in residential proximity. Our strengths are the very things that make us susceptible to this outbreak, and we are carefully weighing our mission with health and safety advice. Please know that it is our fervent wish to return to the vibrancy of campus life, and we are actively exploring and mapping out different scenarios. In the weeks and months ahead, we shall continue to engage in the kind of thoughtful contingency planning that our community deserves, and that such circumstances require.

Even as we do this planning, and with so much yet unknown, we must face other painful realities. Mount Holyoke has a solid financial foundation, but higher expenses and uncertain future revenues on already thin margins mean that we must act now to address our financial losses and to position the College for continued excellence. The uniqueness of this crisis requires us to act not only for the moment, but for projected longer-term impacts and a recovery that may take longer than any of us know. These will necessitate phased, structural changes, and demand of us difficult choices and sacrifices, both now and later. None of this is easy, and I hope you know that we are making these decisions with a concern for equity and for the continued strength and affordability of a Mount Holyoke education.

Actions Taken to Date 

We have, as you know, already taken some steps to address the projected deficit for the current fiscal year, FY 2020, which ends on June 30. These were described in my message of April 7, namely:

• On March 21, we froze all open and unfilled positions for 30 days, with one or two approved exceptions in the academic division. That hiring freeze is now extended at least through the end of December 2020. We continue to look for opportunities to redeploy existing staff to support operational needs.
• There should be no nonessential expenditures from now until June 30 in order to offset the estimated cost of COVID-19 to the College.
• There will be no overtime, except in limited approved circumstances.

In addition, we are looking to apply $3 million of accumulated restricted fund balances to relevant expenditures in the current academic year. With these measures, we anticipate that we will be able to reduce the FY20 budget deficit to about $2 million. We will continue to look for ways to reduce it further. 

Moving Forward with Shared Commitment

We are now proceeding in line with the principles that I articulated in my message of April 14, and in the transparent and consultative way described there. Our early conversations have focused on shared actions that we might take, both to reduce our deficit in FY20 and to prepare for the continuing expected financial impact next academic year and beyond.

In recognition of the sacrifices that will need to be made across the College, I will return 20% of my annual compensation to support student financial aid and the operating budget. The vice presidents of the College will each also return between 10% and 15% of theirs, and for the same purpose. Other senior leaders in the College are considering similar gifts. 

There will be no salary increases in FY21, except for those resulting from the contractual obligations stated in collective bargaining agreements, and from promotions in faculty ranks. 

Compensation comprises approximately 70% of the College’s annual budget. We deeply regret that we are not able to recognize the hard work and effort of our employees through an annual salary increase. Human Resources and division heads will work with employees and managers to ensure that equitable compensation models are in place in the event of any structural changes that result in significant adjustments to roles and responsibilities. The College’s performance evaluation process will continue, with a goal of completing all staff performance conversations by September 1.

Together, these actions total $2.3 million in reduced costs in FY21. 

Changes to Mount Holyoke’s 403(b) Retirement Plan

We will be introducing changes to the employer contributions to Mount Holyoke’s 403(b) retirement plan. The College’s contribution will decrease from 10.5% of eligible compensation to 5% of eligible compensation, beginning on June 1, 2020. We intend this to be a temporary measure and hope to resume our current level of contribution in July 2021. This decision will, of course, be based on analysis of financial constraints as the situation unfolds.

The threshold for mandatory employee contributions (also known as TAMRA contributions) will also change, although we are unable to introduce that change before January 1, 2021. Currently, employees are required to contribute 5% of eligible compensation exceeding $30,000 each year in order to receive the employer contribution. This threshold will increase to $40,000 in 2021, which will also mean the amount of the employee’s mandated contribution will decrease as well. Employees may, of course, make voluntary contributions, subject to annual limits.

This action is projected to save $3.6 million in the period to June 30, 2021.

Changes to the College’s Health Insurance Plans

You may recall that, in spring 2019, the College announced changes to health insurance benefits — changes that expanded choice for employees and aligned our offerings with those at peer institutions. These changes were also introduced to mitigate increases to premiums that threaten to outpace our ability to support them.

With health insurance claims in our community continuing to rise, the College’s health insurance premiums were projected to increase by as much as 10% in the coming year. Even before we were impacted by COVID-19 and its economic consequences, we were considering how we might have to make further changes to our plans in order to reduce the cost of our premiums. We have now determined that we must move forward with these changes.

In short, the plan changes may result in an increase in your health insurance costs, and/or in deductibles, as well as in copayments for office visits, emergency room visits and prescriptions. Human Resources will be sending out more detailed information, and I encourage each of you to pay very close attention to the plan offerings since they have changed over time. There may be a plan that is more affordable and better suited to your current needs. This year, the College’s Open Enrollment — the  period during which employees may elect changes to benefit options — will be held virtually from May 18 to June 19.

With these actions, health insurance premiums (shared by the College and employees) will only increase 6% instead of nearly 10%.  

Accrued Vacation and Collegewide Shutdown May 26–29, 2020

The College’s longstanding and generous program for paid vacation is designed to encourage time away from work to recharge, pursue interests or manage personal matters. For many, the current pandemic and the changes it has imposed upon us have required intense focus, long hours and sacrifices of time and energy. 

Each year many of our employees do not take full advantage of their vacation time. At the end of the fiscal year, staff are able to carry over a significant amount of that vacation time (up to 150 hours), and the College must record an expense on its financial statement for this unused, accrued vacation liability. This year, to facilitate the individual recovery of our employees, and to assist with reducing the College’s liability for accrued vacation, Mount Holyoke will shut down from May 25 to May 29. Employees will be required to use four days of vacation or floating holiday time during that week (May 25, Memorial Day, is a holiday).

Any employee who believes they do not have four days of accrual should contact their supervisor, who will work with Human Resources on possible options. The limited number of employees who will be required to work should discuss with their supervisor an alternative arrangement to use this vacation time. There will be no change and no exceptions to the College’s regular vacation carryover policy. Departments should, therefore, work with staff to use any accrued vacation time that exceeds the carryover limit before June 30, 2020.

Employees can access a list of FAQs and contact information for further questions.

Planning for the Future

Taken together, these actions represent an overall reduction in expenditures of about $6.5 million, or about 5% of anticipated costs for FY21.

We are facing continued financial uncertainties and pressure on our resources. The reality is that these are likely just the first of many difficult decisions that we may be compelled to make in the coming weeks. You have my assurance that we will proceed with great care, evaluating the conditions in which we must operate, and doing our very best to retain and support what makes Mount Holyoke so special: its people, and their talent and creativity.  

As I write, the Academic Planning Group is accelerating its efforts to plan for the fall, and the Financial Review Group is turning its attention to the financial implications of those scenarios, as well as to reviewing the approved capital projects. All divisions are being asked to reconsider their FY21 budget submissions, to reprioritize, and to identify short-term savings and more permanent reductions. 

As we move forward with this work, we will continue to consult as often and as widely as we can, and I will continue to be proactive in sharing information with you.

I have the utmost confidence in our community, in our ability to navigate these new waters with discipline and imagination, and in our shared commitment to Mount Holyoke, to each other, and to our students. 

In the hope that you will continue to stay well and be safe, and with my gratitude and admiration

Sonya Stephens
President