FAQ: Financial Information for Employees

Below are answers to frequently asked questions about the conclusion of the COVID-19 paid administrative leave period, retirement contributions, investment planning and USC’s financial situation. See the General Employee FAQs for information about the work environment, updated policies, and more.

If you have questions that are not answered in our FAQs, please email covid19@usc.edu. Our response team will help find an answer.

Conclusion of COVID-19 Paid Admin Leave

The COVID-19 Paid Administrative Leave period began on March 16, 2020 and concluded on June 30, 2020. USC recognizes the challenges that COVID-19 has and will continue to present to our employees. We’ve gathered information and resources to help you and your loved ones through this difficult situation. View our employee resource guide that includes contact information and links for further information. Ver la guía en español.

General Financial Questions

We constantly evaluate our financial situation. Based on the projections showing a gap of $300 million - $500 million for FY21, we consulted extensively with faculty, staff, and student leaders to gain input that greatly informed our decision making. We engaged with the executive board of the Academic Senate, met with deans and school faculty councils, and consulted with individual faculty members. More than 1,000 faculty members attended the provost’s all-faculty meeting. We met with the Staff Assembly to discuss the financial actions under consideration and with elected student leadership. We value the input of all members of our community and will continue to seek that feedback.

We are looking at other actions that we can take to help ease the financial burden of COVID-19. We have asked the schools, academic units, and administrative offices to review their budgets for potential efficiencies that do not involve additional compensation changes beyond those discussed here. We are looking at options we can take centrally, including procurement, information technology, professional services and other areas. We already implemented hiring and merit increase pauses, senior leadership compensation reductions, and pauses on travel, discretionary spending, and capital projects. The university will continue to evaluate this evolving situation, consult with faculty, staff, and student leaders and communicate any future actions that may be necessary.

The USC endowment works to ensure the stability of our institution in perpetuity. It has grown through the generosity of a series of individual donors. The majority of these gifts are restricted, designated for a specific purpose. These gifts cannot legally be diverted to other purposes. USC, as with all universities, has established strict policies to ensure a sustainable endowment spend over the years.

Yes. The president is taking a 20% reduction in salary; the provost, senior vice presidents, athletic director, and all deans are taking a 10% reduction in salary; vice presidents are taking a 5% pay reduction as well. They are also participating in the retirement contribution pause.

USC will not be borrowing funds to cover the financial gap resulting from COVID-19. The university recently borrowed funds when interest rates were low in order to increase liquidity and ensure the university is well positioned to pursue new strategic opportunities. Borrowing now to close the financial gap would trigger higher interest rates and significantly weaken the university’s financial position.

USC has refinanced current loans twice in recent years, and this is not an option at this time. We will examine this again when the time is right.

The university is fundraising during this time. We are receiving donations for research projects and educational programs, we are helping to support the needs of our neighbors, and we are providing emergency funds to support the needs of our community.

We always want to maximize the value of our assets. However, asset sales are likely to suffer large losses in this economic climate. We will be reexamining this possible course at the appropriate time.

We are looking at all the ways the university can be more efficient. All academic and administrative units are examining their budgets to determine potential 5%, 10%, and 15% reductions. All budgets are currently under review.

We want to resume our merit raise program as soon as it is possible to do so. We will continue to update you on this.

Partnerships cannot be changed at this time because they are under contracts. They can only be changed when the contracts are up for renewal.

Every year, the university renegotiates rates with all of our health plan carriers and makes plan design changes. This is currently in process for the upcoming open enrollment season. We will provide updates as soon as we can.

The COVID-19 Technology Work From Home Stipend provides $53 per month (taxable) for employees to cover a reasonable percentage of the cell phone, internet expenses and other technology expenses that may be generated by working from home during the COVID-19 pandemic.

Employees with a university-issued cell phone that includes a working data/hotspot are not eligible for the stipend, but those with university-issued equipment who must still use personal internet for internet access are eligible.

Employees who believe that the stipend does not cover the reasonable costs they actually incur must maintain accurate records of such charges and submit them via the approved channels as per USC’s Reimbursements (Expenditures) policy.

Please direct questions about the stipend to your HR partner.

Yes. Employees can sign up for direct deposit in Workday. During the COVID-19 situation, direct deposit will be active within 48 hours of an employee’s enrollment. To sign up for direct deposit, please follow the steps in this guide.

See Benefits During Unpaid Leave, which includes a great deal of information for employees who have been placed on unpaid leave. In addition, employees who need help – or wish to help other employees – should consider the USC Employee Support Fund, or the new Major Disaster Leave Sharing plan.

To protect the health and well-being of our students, employees and candidates, the university has temporarily paused all hiring activity, with the exception of emergency, health care, grant-funded, fundraising, and regulatory-funded positions.

The payroll tax “holiday” program allows employers, at their option, to defer the employees’ portion of Social Security withholdings (6.2%) from September-December 2020 and only applies for employees who earn less than $4,000 biweekly (or equivalent). Employers who opt-in to the program essentially act as loan administrators, suspending Social Security withholdings for applicable employees from September-December 2020, and then collecting the tax obligation from those employees’ paychecks between January and April 2021 to repay the loan.

USC is currently evaluating our participation, assessing the potential financial impacts and operational feasibility while we await further clarification on the many open questions that remain. Meanwhile, we will continue to withhold all payroll taxes and any future participation in the program would not be retroactive.

Retirement Pause Questions

Due to the financial impacts brought on by the effects of the COVID-19 pandemic, USC will be implementing a pause on the University’s non-elective (automatic) contributions to employee retirement accounts under the USC Retirement Savings Program for all employees during the 2021 calendar year. This action will create savings to help the University close the COVID-19 financial gap in a way that minimizes the impact on take-home pay for employees. All employees, regardless of compensation, are subject to the financial and labor actions that the University takes due to the impacts of COVID-19 such as salary cuts for our executive team, a pause in employer retirement contributions, and other pauses to compensation or merit increases.

All employees of the University and the health system who participate in the University’s 403b Retirement Savings Program will have their 5% non-elective (automatic) contribution paused. The University will continue the 5% match program, that is to continue to match the contributions of our employees (pre-tax and/or Roth contributions) up to 5% of eligible earnings for eligible employees.

While the health system developed a separate clinical financial plan, the health system’s decisions for retirement contributions match the University’s plan.

As this pause only affects the USC Retirement Savings Program, the provisions of the Keck Medicine of USC 401(k) Retirement Plan are unchanged.

The University previously communicated that the full 10% of University contributions would be paused. Our revision comes after (1) thoughtful consideration of feedback from faculty and staff, and (2) encouraging financial performance projections. Through our reduction of unnecessary spending, increased remote work, paused travel, and reduced University campus activity we have realized significant cost savings this fiscal year. We appreciate all of these efforts, as they make our revision to now only pause the 5% non-elective (automatic) contribution possible.

We are one University dealing with unprecedented challenges and financial gaps, and this is the right course of action for our University and employee community. The pause on 5% non-elective retirement contributions is University-wide. All benefits-eligible employees have the same retirement pause for calendar year 2021.

Non-elective retirement contributions will be paused starting on January 1, 2021 for one year. Employees may increase their pre-tax and/or Roth employee contributions to the USC Retirement Savings Program in accordance with federal regulations during this time (up to $19,500 in 2021, or $26,000 if you are age 50 and over).

No, if you are eligible for matching contributions, the University will continue the match program, that is to continue to match your contributions (pre-tax and/or Roth contributions) up to 5% of eligible earnings. Your contributions will continue to be deducted from your paycheck unless you make a change through Workday. You can start, stop, or change your contributions at any time, with changes effective the next pay period. Please remember the USC contribution does not count toward the IRS annual employee contribution limit (for example, for calendar year 2021, employees can contribute up to $19,500, or up to $26,000 for employees age 50+, to their  USC Retirement Savings Program accounts, via the matched employee contribution plus any additional supplemental contributions).

Because of the uncertainty of operational and financial impacts of the pandemic, there are no current plans to provide additional benefits to make up for the retirement pause on non-elective (automatic) University contributions during 2021.

Our employees at USC Verdugo Hills, USC Physician Associates, and the Las Vegas Healthcare Center are enrolled in the Keck Medicine of USC 401(k) Retirement Plan, which remains unchanged.

The University is facing a budget gap of $300-500 million in FY2021. The retirement pause on non-elective (automatic) contributions is estimated to save $50 million in FY2021 (and an additional $50 million in FY2022), helping to fill the budget gap in a way that minimizes the impact on take-home pay for employees.

The savings generated from the retirement pause on non-elective (automatic) contributions will solely be used to cover operating costs and financial gaps caused by COVID-19. The savings will not be used for covering USC lawsuits, extending employee bonuses or increased compensation, or be redistributed to other University expenditures.

Many universities and hospital systems across the country have taken similar financial actions to stem financial losses, including retirement pauses, hiring freezes, pay cuts, furloughs, and layoffs.

The annual required participant notices for the USC Retirement Savings Program are sent to all employees on or around November 30 for the upcoming plan year. Employees can learn more about the USC Retirement Savings Program here.