Throughout the pandemic, even as our operations and finances were impacted, USC has remained committed to supporting our faculty, staff and students, protecting the excellence of our programs, and ensuring a strong future. Together, over the past seven months, we have generated savings by limiting hiring, reducing travel and entertainment expenses, and cutting back on operating expenses.
We have continued to evaluate our cost mitigation strategies over the past several months and we are pleased to share today that we have decided not to institute the full 10% pause on University contributions to USC’s 403b Retirement Savings Program, as previously communicated on June 8, 2020.
Effective January 1, 2021, the University will continue the 5% match program, matching the pre-tax and/or Roth contributions of our employees, up to 5% of eligible earnings. The University will pause only the 5% non-elective (automatic) contribution that USC usually provides employees whether or not employees contribute any funds into their retirement account. This applies to all University employees including those at Keck Medicine.
The pause in the 5% non-elective (automatic) contribution will generate a savings of $50 million over FY2021 which helps to close the projected financial gap of $300-$500 million. Over the full calendar year, this amounts to about $100 million. While our pause in hiring and merit increases remains in place, we made the decision early in the summer not to implement across the board furloughs and layoffs to close the budget shortfall.
With the current rise in COVID-19 cases, we will be required to begin our Spring semester fully online, but we are speaking regularly with health officials and are hopeful we will be able to resume some on-campus activity during the semester. As we continue to plan for and project the impact this may have on our operations and finances, we encourage you to use your entrepreneurial skills to come up with cost saving ideas to share with leaders in your departments. You can also share them at “Ways to Save.”
Please visit the Financial FAQ for Employees for more information. Later today you will also be receiving the annual retirement plan notice from the USC Retirement Plan team.
Thank you again for all that you do for the USC Community. We wish you continued good health. Fight On!
Felicia A. Washington
Senior Vice President,
Charles F. Zukoski
Provost and Senior Vice President,
James M. Staten
Senior Vice President, Finance,
and Chief Financial Officer
cc: Office of the President
President’s Senior Leadership Team
Provost’s Leadership Team