Cost to Harvard: $100,000
Benefit to retiree: $144,250
The extraordinary increase in benefit in Plan B is due to two factors: The elimination of the 40% up-front tax payment and the compounding of interest on the unpaid balance.
As you know, salaried employees have neither the tenure protection of faculty members nor the union protection available to hourly workers. My friend was therefore compelled to accept the offer of a lump sum payment, and has promised to sign a release stating that she will not contest the settlement. Her case, as far as I am concerned, is closed. My effort now is not directed at redressing the injustice done to her, but on seeking public opinion support to persuade Harvard, for the benefit of other employees in a like situation, to revise its restrictive policy on method of payment, which are counterproductive for all involved.
Although Human Resources' present policy of lump sum payments is obviously the easiest and fastest way to close the books on an older staff member who is no longer needed or wanted, in my judgment it is in Harvard's unlighted self-interest to move to a policy that permits multi-year payments and doubles the benefit to the employee, at no added cost to Harvard, except the administrative expense involved.
As a loyal alumnus and supporter of Harvard, I am perplexed and troubled by a policy that does not seem worthy of a great university such as Harvard particularly one with Harvard's financial acumen. On a personal level, I have been deeply moved by observing how an inappropriate policy decision condemns a friend to spend her retirement years with a significant portion of her meager retirement income forever lost to the IRS. Wendell Benway