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 Questions

This action will create significant savings to help the university close the COVID-19 financial gap.

Retirement contributions will be frozen starting on Jan. 1, 2021 for a year. Employees may increase their contributions to retirement plans in accordance with federal regulations during this time.

The pause in university-paid contributions affects all administration, faculty, and staff employees, with the exception of Keck Medicine of USC employees, and faculty paid from clinical revenue generated through the CHLA medical group, the LA County contract, and USC Care medical group who spend the majority of their time in patient care activities. We are developing a separate clinical financial plan to close the gap for those in the health system.

Your USC retirement accounts provide free access to financial advisers. If you wish to discuss your current situation, contact your retirement provider – they are offering virtual and phone appointments now:

Fidelity Investments
Fidelity scheduling link
800-343-0860

TIAA-CREF
USC scheduling link
800-842-2252

Vanguard
Vanguard scheduling link
800-523-1188

Please visit the USC Retirement Benefits page for additional information.

Employees can request retirement plan loans and distributions under the CARES Act since the COVID-19 pandemic is a qualifying event.

To take a loan against their retirement accounts, employees should contact their retirement plan provider:

NOTE: The expanded loan availability under the CARES Act ends on September 22 - to meet this deadline, loan applications for loans under the CARES Act must be received by the HR Service Center in good order (including notarized spousal consent) no later than Friday, September 18, 2020. Please note that the investment providers will not process late applications no matter the reason for the delay. See the Employee Gateway for additional details.

Distributions under the CARES Act will continue to be available through December 30 of this year. For information on hardship distributions - and any other questions related to retirement plans - please contact the HR Service Center at uschr@usc.edu or 213-821-8100 Monday through Friday from 8am-6pm.