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Wage and Retirement Contribution Reduction Information for HR Professionals

On June 22, 2020, President Stanley announced ­the University’s decision to implement temporary wage and retirement contribution reductions to help address the financial impacts of the coronavirus pandemic. The following information provides further details on those reductions.

Retirement Contribution Reduction

Effective July 1, 2020, MSU reduced its matching contributions to the 403(b) Base Retirement Program from 10% to 5% of employees’ eligible compensation. In order to receive the University’s 5% match, employees must still contribute 5% of their eligible compensation to the 403(b) Base Retirement Program (just as they were required to do in order to receive the University’s 10% match before the reduction).

Who is impacted

The retirement contribution reduction applies to the following benefits-eligible employees with an employment percentage of at least 50% and an appointment for nine months or longer:

  • All executive management employees
  • Non-unionized* faculty members
  • Non-unionized* academic staff members

*For these purposes, “non-unionized” means the terms of employment of the faculty member or academic staff member are not covered by a collective bargaining agreement. For those faculty and academic staff members with hybrid Union of Nontenure-Track Faculty (UNTF)/non-UNTF appointments, the retirement contribution reduction only applies to the non-UNTF portion of their appointment.

The retirement contribution reduction applies to all benefits-eligible employees described above. For those benefits-eligible employees described above who have not yet completed a service requirement to start earning University matching contributions, the reduction will apply once they complete the service requirement and start receiving University matching contributions.

Wage Reductions

Effective Sept. 1, 20201, MSU will implement a temporary wage reduction using a graduated scale ranging from 0.5% for those with the lowest salaries to 7% for those with the highest salaries. View the full wage reduction scale here. Reductions will be in effect for at least one year but may be extended depending on the university’s financial situation as this unprecedented pandemic continues to evolve.

Who is impacted

This reduction applies to all non-union faculty and academic staff and executive managers with the following exclusions:

  • Individuals covered by the Union of Non-tenure Track Faculty (UNTF) collective bargaining agreement
  • Individuals with an employment percent of 89% or less
  • Individuals on visas
  • New 2  faculty and academic staff (tenure system, continuing system, fixed term) whose offer of employment was extended prior to July 1, 2020 and have not yet started their position

Please note: These reductions will apply to non-union faculty and academic staff (tenure system, continuing system or fixed term) and executive managers whose offer of employment was extended on or after July 1, 2020.

Offer letters of employment

Effective July 1, 2020, units and departments need to use updated offer letter language when making offers of employment to new faculty and academic staff (tenure system, continuing system, fixed term). Review the temporary pay reduction and offer letter language attachment communication here. Locate updated documents here:

Additional information and resources

A calculator is available to units to determine the reduction percentage and the new full-time salary rate for appointments with a hybrid UNTF/non-UNTF appointment. Please complete the calculator template for each hybrid UNTF/non-UNTF appointment, attach it to the addendum, and submit it with the appointment paperwork to MSU HR.

You do not have to take any other action at this time. The reductions will be applied automatically for the appropriate payroll periods.

View a list of frequently asked questions here.

If you have questions regarding these changes, please contact Academic Human Resources at ahr@msu.edu or 517-353-5300.


1Executive managers and deans will continue with a wage reduction effective July 1, 2020, at the new wage reduction scale.

2”New” is intended to mean those who are first-time hires under the classification of faculty and academic staff.

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