The University of Utah is significantly reducing the retirement benefits that it will offer to new employees.

The change was announced in a statement posted late Friday, which set off a flurry of frustration among current faculty and staff at the school. A campus-wide newsletter sent to faculty and staff Monday — the first day of fall classes — also outlined the changes.

Jeff Herring, the U.’s chief human resource officer, answered some questions Monday during a meeting of the school’s Academic Senate, where about 100 faculty members represent their roughly 5,000 colleagues.

There, he said the U. has been “dramatically overinvesting” in retirement benefits at the cost of providing other competitive incentives to employees, including higher salaries.

Currently, for each eligible full-time U. employee that elects to have a retirement account, the university provides an automatic 14.2% contribution each pay period without any required contribution or match from the employee.

That used to start immediately when an employee began their job at the university. In January, that was adjusted to require four years of service before an employee would be vested; if they quit prior to that, they forfeit any earnings.

Herring called the 14.2% contribution “truly a national outlier” for 401(a) accounts (employer-sponsored retirement plans for government employees).

“Most public universities in the country offer retirement benefits that are substantially below that,” he said.

Moving forward — for employees with a start date after July 1, 2027 — the university will offer far lower retirement contributions.

Those employees will receive a 6% annual contribution from the university to their 401(a) accounts. Employees can then elect to personally contribute more to a supplemental 403(b) account. Those who elect to contribute 4% or more there will also receive a 4% match from the university.

That means, at maximum, the U. is now contributing 10% to a new employee’s retirement plan.

All existing employees at the U. have been grandfathered into the 14.2% plan, a detail that U. President Taylor Randall emphasized during the meeting Monday.

“To be clear, the benefits change will not affect individuals that are here at the university right now,” Randall said. “Anyone hired before July 1, 2027, will have the old benefits contribution package.”

That includes career-line faculty, who are not tenured professors and sign regular contract renewals, Herring noted. That had been a concern of the Academic Senate.

The new plan aligns, Herring said, with what the University of Utah Health’s hospitals and clinics were offering employees.

The school has discretion to update its retirement plans, he added, and the shift is compliant with state code. The state’s other public colleges and universities have not appeared to make a similar move, but it comes as all schools have been pushed to cut and reallocate funding.

Gabriel Lozada, a professor of economics who co-chairs the faculty advisory committee on retirement benefits, said he is concerned that his group wasn’t informed about the new policy or vesting changes that took place in January.

Herring noted more vesting schedule changes could come in the future, but that hasn’t been determined yet.

With the change, the hope is that more U. employees will actively contribute to their retirement accounts, Herring said. Currently, he noted, only about 40% do.

Yvette Romero Coronado, an associate professor in the College of Social Work, questioned the implications of that metric.

“Life is expensive. The cost of food is going up,” she said. “People might be prioritizing being able to live instead of that contribution.”

Herring said the U. will use its savings to reinvest into more competitive salaries for employees.

But that faced some pressure by faculty in the Academic Senate over how such increases may pan out.

Gerald Mace, a professor of atmospheric sciences, said he was “startled” by the change and asked if it meant being able to hire new faculty at a higher starting pay.

Herring hemmed. He said the changes won’t be “on an individual basis” but will instead go toward creating a bigger total compensation pool for the university — particularly for employees who make less than $80,000 annually, or for positions that consistently see recruitment and retention challenges.

“I’m not sure it will result in increased salaries for employees coming up,” he said.

Already, the U. has been working to study and realign faculty salaries, said U. Provost Mitzi Montoya, to be more competitive externally and more fair internally.

Career-line faculty at the U., mainly lecturers, saw their salaries raised in July based on rates at peer institutions, she said. Now, no one should be paid below the national averages for their discipline and rank.

The boosts came as an acknowledgement of increased teaching workloads for faculty instituted by the Utah System of Higher Education.

They were in addition to the state-mandated 2.5% salary increase for all public higher education employees.

This fall, the U. plans to do the same for tenure-line professors — after collecting more data for some disciplines. Some have already seen merit raises this year, said Sarah Projansky, vice provost for faculty and academic affairs.