FOLLOWING THE MONEY
University plans to cut employee benefits
The reductions ranged from fewer days off to healthcare and staff tuition assistance.
By COLIN STILLMAN
Amid layoffs and budget cuts, USC announced it intends to reduce employee benefits beginning Summer 2025. As of the 2023-24 academic year, the University reported over 22,000 staff and faculty.
During closed-door presentations to limited faculty and staff Oct. 16 and Oct. 18, Human Resources representatives announced planned reductions to benefits ranging from healthcare to tuition assistance. The University reverted some of the changes following pushback from employees. It is unclear whether these benefit reductions result from underlying budgetary issues, or if the University is being more conservative with its resources this year.
The University will remove the employee fitness incentive, which reimburses employees up to $220 each fiscal year for gym membership fees, fitness classes and more. Additionally, the Vitality health incentive — which subsidizes healthcare costs for employees — will be reduced from $40 per month to $25 per month.
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USC also planned to remove three paid winter break days before reversing the changes due to employee pushback. Extended winter break days were originally implemented during the coronavirus pandemic to improve the well-being of employees, according to a press release from President Carol Folt at the time.
The University also made major changes to Tuition Assistance Benefits. Under TAB, the University partially or fully covers the cost of degrees pursued by employees, children and their spouses.
Among the changes, eligible employees’ graduate certificates are no longer covered. USC also removed 50% of the coverage for a child’s graduate degree, and the age cap for dependent children on this coverage was decreased from 35 to 26 years old. Spouses will now receive 25% of tuition assistance, compared to 50% of coverage before the changes. USC anticipates saving roughly $20 million per year through these cuts.
Philip Turner is the founder of My15atUSC, a group that intends to peacefully contest the University’s benefit reductions. He alongside other employees plan to table Nov. 20 at Tommy Trojan during the UCLA rivalry week. Turner said the University’s decisions are a disservice to the employees who have invested time and resources.
“The University is making decisions that affect … thousands of peoples’ lives,” said Turner, an associate director for safety and security at USC Housing, “[This affects the] financial and life planning that has been done by our long-term faculty, staff and their dependents.”
USC provides tuition coverage based on how long an employee works at the University. Staff must wait two years to receive eligibility and must remain employed at USC for two years after completing their degree. This eligibility requirement was introduced in January 2019. There is no waiting period for faculty.
USC plans to eliminate its 15-year letter program, which allows staff and faculty who leave the University after 15 years of employment to receive TAB benefits for children.
Turner said some employees pursued employment at USC or remained at the University due to the expectation of receiving this benefit. Some employees expressed that they turned down other jobs in anticipation of the benefit or are now unsure about their dependents’ futures.
The University restored the extended winter break and TAB for current 15-year letter holders shortly after, as announced in an Oct. 29 email signed by Provost Andrew Guzman and other administrators.
“We apologize for any confusion and ensuing frustration,” they wrote. “We care deeply about the wellbeing of everyone at USC.”
The email further said TAB “remains a priority” but confirmed benefits would still be cut for employees who began a program from Summer 2025 onward. This includes employees who become eligible for a 15-year letter after this time, even if their employment began prior to 2025.
The meetings where TAB reductions were announced are not typically available to other employees. However, the recordings were uploaded online after multiple requests from attendees to administrators. There was no employee-wide announcement from the University until Oct. 29 — 13 days after the first meeting.
Before Oct. 29, employees learned of the changes through word-of-mouth, and many were concerned about the University’s lack of transparency.
Although the Faculty Senate and Staff Assembly have chairs on a committee recommending benefit adjustments, they serve in an advisory role. It is unclear what panel of individuals, if any, made the final decision and when.
The administrators said adjustments were made after the University “reviewed programs at 34 peer institutions.” They also cited “investments” related to USC Competes. Folt introduced this program with a goal of increasing employee compensation.
In a Fall 2023 brochure from the President’s website, the University wrote “[USC Competes will] make USC a destination of choice that attracts the best and brightest.”
It mentions a $50 million investment toward faculty diversity and a $700 million investment for salary increases, employee benefits and market adjustments. The brochure did not elaborate on the progress of dispersing these funds and where the revenue for these changes came from.
The administrators wrote that “close to $500 million in additional investments” had been made by June 2024 while acknowledging that reduced staff benefits were made with the aim of funding USC Competes.
When asked whether USC engaged in any communication with affected employees when deciding the changes, the University directed the Daily Trojan to their employeewide email.
After President Folt announced her retirement, former USC Board of Trustees Chair Rick Caruso told the Los Angeles Times he was “very confident that the university, fiscally, is just fine.”
In that article, USC said its financial situation is “very stable.” However, they acknowledged the University is “navigat[ing] major changes impacting higher education.”
The University’s public tax filings show positive returns in recent years. Over the five-year period from June 2018 to June 2023, USC posted a total profit of $879 million.
To some employees, the ramifications of these reductions will extend beyond employees’ financial futures.
“I can see how erosion of benefits… will only lead to deterioration of the culture at USC,” a LinkedIn commenter wrote. “This change seems like a destruction of the values that underpin [the Trojan Family].”
This article is the first in the Daily Trojan’s “Following the Money” series, which will take a deep dive into USC’s finances. It will also investigate how students, faculty and community members are impacted by the University’s fiscal decisions.
