Princeton confirms employee benefit cuts amid far-reaching budget cuts

University Provost Jennifer Rexford ’91 separately emailed faculty and staff on Aug. 31 with an update on the University’s finances, marking the first formal communication to faculty regarding employee benefit cuts since a June 3 memo from Vice President for Human Resources Romy Riddick.

The June memo told faculty and staff they would pay more for medical insurance premiums and services. It also introduced a new $600 annual surcharge for spouses covered under a University health plan but employed elsewhere, and reduced retirement contributions, from 15 percent to 12 percent, for earnings above the Social Security Wage Base, which is currently $184,500. The University also said it would switch pharmacy benefit managers from OptumRx — which it sued in June for allegedly overcharging on insulin prices for University employees — to Judi Rx. 

In her email to faculty, Rexford noted that, since 2020, Princeton’s salary increase for continuing full professors was 5.5 percent per year, a 30.5 percent cumulative increase she stated is slightly higher than the average of peer institutions Harvard, Yale, Stanford, and MIT. She also stated that the University will “continue to operate in a more financially constrained environment for the next couple of years as we transition to a new budget model to match the expected lower long-term returns.” 

Faculty hiring will continue at a slower pace, she wrote, with a goal of maintaining rather than growing the size of the faculty. Administrative units, by contrast, are growing at just 1 percent and face further staffing reductions; according to Rexford, University staff headcount has already declined by more than 3 percent over the past year through layoffs and unfilled vacancies, with more cuts expected.

In February, the University said it would reduce employee benefits and sharply limit salary increases for the upcoming fiscal year as part of a broader effort to tighten its budget amid lower expected long-term endowment returns and uncertainty over federal funding. However, specifics were not communicated to staff until Riddick’s June memo informed faculty and staff that they should expect to pay more in medical insurance premiums and medical services. 

The memo states that University employees will “have access to the same range of insurance companies, health plans, and provider networks.” The University will continue to contribute 9.3 percent of salaries to retirement for employees who make less than the Social Security Wage Base and offer programs including dental, vision, gender-related healthcare, fertility care, GLP-1s, and life insurance. 

Former University spokesperson Jennifer Morrill wrote to The Daily Princetonian in July that basic life insurance is covered up to $100,000 — which marked a reduction from 2025, when the University covered supplemental coverage up to three times base salary or $500,000, whichever was lower. Princeton’s average academic year salary for full, associate, and assistant professors was $314,734, $185,612, and $150,135 respectively for the 2024–25 academic year, according to data from the National Center for Education Statistics. Lecturers, which are not separated by seniority in the data, earned an average of $115,112, and the average for all instructional staff was $228,190. 

Faculty reactions to the cuts varied, with some questioning the University’s rationale and decision-making process while others described the changes as a reasonable, if painful, response to financial constraints.

Professor of Economics and Public Affairs Owen Zidar learned of the changes through the June memo, after some colleagues had already received notice that their insurance coverage had changed.

“Most of us found out by getting a letter in the mail from the insurance company saying our coverage was canceled,” he wrote to the ‘Prince.’ “Frankly, it is shocking how little input and power faculty have in the governance of this University.” 

“All faculty and staff were notified in the fall through open-enrollment materials including emails, booklets, and the website. Those impacted by the change also received a letter notifying them of the change with an opportunity to enroll in continued coverage,” Morrill wrote to the ‘Prince.’ According to two University employees, the change was not mentioned to them prior to receiving the letter in the mail. 

Zidar told the ‘Prince’ that the benefit cuts caught him by surprise. “I don’t recall being notified, and neither did several others who were surprised by it,” Zidar wrote, calling the notice “very easy to miss.”

Associate Professor of Religion Garry Sparks wrote to the ‘Prince’ about the financial burden these changes are placing on University employees. 

“My general practitioner physician now adds a $175 out-of-pocket fee to cover annual physical exam blood tests that were previously covered by my Princeton medical insurance,” Sparks wrote. 

Professor of History and Hellenistic Studies Molly Greene questioned the University’s rationale for cutting benefits rather than drawing on its endowment. “The administration says it has to because it can’t simply spend the endowment,” she said. “Others say that’s ridiculous — the endowment exists precisely for such a rainy day. Which assertion is true?” 

She added that faculty had little say in the decision: “The administration always says that it is ‘listening,’ but in fact decisions are simply handed down from on high.”

Professor of Physics Robert Austin said he viewed the changes as designed to affect those best able to absorb them, calling them “progressive” and writing that they “target those most able to afford the increased costs and lower coverages.”

Zidar disagreed, saying the retirement contribution cut alone could cost younger faculty roughly $300,000 in lost retirement wealth over a career. “These moves are more aggressive than those of peers who have been hit far harder — schools with medical centers and much greater federal grant exposure,” he wrote. “Princeton, one of the wealthiest and most insulated universities in the world, appears to be cutting the most. Predictably, these cuts are eroding faculty morale and are hurting retention and recruiting.”

A Sept. 2 email to faculty from Assistant Vice President for Human Resources Elaine Britt added that monthly medical premiums, deductibles, copayments, and out-of-pocket maximums will all rise in 2027. Employees can review the full details of the 2027 changes on the University’s open enrollment website ahead of the enrollment window, which runs from Oct. 26 to Nov. 13.

Meghana Veldhuis is a senior News writer for the ‘Prince.’ She is from Bergen County, N.J., and typically covers graduate students, postdocs, faculty, and campus unions and labor. She can be reached at mveldhuis[at]dailyprincetonian.com. 

Please send any corrections to corrections[at]dailyprincetonian.com.