Haifa Univ. Can't Dip Into Pension Funds to Cover Deficit

Haifa University has been barred from using faculty pension funds to cover a budget deficit. Earlier this week the Haifa Regional Labor Court accepted several demands made by the union representing senior faculty members in a suit against the university, the budget and planning committee of the Council for Higher Education and the State of Israel. The court issued a declaratory order to insure that the university does not use monies withheld from current accounts for future pension payments for any other purposes.

The Faculty Union claimed in its suit that the university withdrew millions of shekels from the pension reserve fund unilaterally, without negotiating with faculty members. It also said faculty members feared the university would be unable to meet its commitments to the staff due to its financial difficulties.

The university argued that the funds backing future pension payments are meant to "bolster the university's finances at times when pension payments are high." It also claimed that it had recently encountered a situation in which "it weighed whether to withdraw reserve funds in order to pay for current expenses, service debts and reduce the deficit," and that it had consulted with senior faculty on the matter. The university maintained as well that it alone reserved the right to use the fund, and requested to withdraw 52 million shekels from it "in accordance with its needs, in amounts as it sees fit."

The faculty pension reserve fund is allocated from the university's current budget, whose sources are the Council on Higher Education's budget committee, the university's independent sources, and monies deposited by the university in "a fund to reduce the deficit in its pension arrangements with the senior faculty union."

The court ruled that while the university does not have the right to use monies it receives from the higher education council, it may use reserve funds from independent sources, but even these only to pay current pensions.

At the same time, the court ordered that the university may withdraw 52 million from the reserve pension fund - on condition that it be transferred to senior faculty pension payments after certain deductions for previous withdrawals.

In response, Haifa University officials said: "The Haifa Labor Court's ruling accepts the university's underlying position, which has never changed, that we reserve the right to use specially designated pension reserve funds to pay current pensions." In addition, the university spokesperson said, "We are studying the ruling in order to understand its implications on how we function administratively, and on our stance toward all our obligations, including severance pay to the senior faculty. Future steps will be taken in accordance with our conclusions about the ruling."

The university also responded that, "Administrators arrived at a creative solution to the dispute with mediators [senior faculty members], but the faculty committee rejected it, offering instead a highly problematic suggestion. The administration's goal is to come to an understanding with the union and include the faculty in the process of recovery and renewed growth of the university."