Many countries around the world look to U.S. practices to improve their educational systems — not only for content and structure, but also for compensation and benefits administration strategies. As non-U.S. universities consider adapting public U.S.-based systems to their own needs, they closely evaluate the challenges and nuances of implementing these compensation and benefits models. Here, we share the findings from our recent work in this area.
This analysis is sourced from publicly available data among the 50 largest public universities in the United States based on U.S. News and World Report rankings (March 2024).
References made to “majority” and “prevalent” practices are related to the applicable sample of this research conducted. Prevalence of retirement, health and welfare benefits among the samples is set forth in the tables below, but all public institutions do offer some form of retirement (Table 1).
| Benefits | Prevalence | |
|---|---|---|
| Retirement Plans | Defined contribution | 96% |
| Deferred compensation | 84% | |
| Defined benefit | 82% | |
| Choice | 66% | |
| Medical | 100% | |
| Dental | 100% | |
| Vision | 100% | |
| Life insurance | 94% | |
| Disability insurance | 94% | |
| Tuition benefit | 90% | |
| Wellness program(s) | 78% | |
| Paid parental leave | 72% | |
| Childcare benefits | 36% | |
Source: U.S. News and World Report rankings, March 2024.
Although all institutions in the sample offer some form of retirement plan, it is unsurprising to find that defined contribution (DC) plans are most prevalent. These types of plans offer multiple benefits that other retirement plans do not:
Regardless of the benefits package offered by a university, a common question always arises regarding eligibility to participate in the benefits plans. Typically, from looking at the 50 largest U.S. public schools in this study, faculty with full-time appointments (tenured/non-tenured) and full-time staff are eligible. Adjunct and part-time faculty and staff are generally excluded from comprehensive benefit offerings (this practice generally differs among private schools, where both part-time and full-time faculty are generally eligible).
This practice may require rethinking as public universities continue to employ more adjunct and part-time faculty. This being said, without constant review of eligibility, public universities may risk losing their ability to remain competitive in the market; thus, they may lose their ability to attract and retain key talent.
All public institutions provide health and welfare benefits, including medical, dental and vision coverage, as well as disability and life insurance. While childcare benefits are less commonly offered at the public level, paid parental leave for faculty is becoming more prevalent across public higher education institutions.
This is in addition to job security requirements unrelated to pay as required by the Federal Medical Leave Act (FMLA). Public institutions aiming to differentiate themselves from standard compensation and benefits practices might consider incorporating childcare into their plans, setting themselves apart in the market.
In the 10 largest U.S. public school K-12 districts, compensation and benefits are administered slightly differently compared to their U.S. public university counterparts (Table 2). The most common method of delivering and administering benefits is through state-sponsored programs. One of the largest districts, New York City, manages these benefits under a collective bargaining agreement with the United Federation of Teachers.
| Benefits | Prevalence | |
|---|---|---|
| Retirement Plans | Choice | 100% |
| Defined benefit | 100% | |
| Deferred compensation | 100% | |
| Defined contribution | 90% | |
| Medical | 100% | |
| Dental | 100% | |
| Vision | 100% | |
| Wellness program(s) | 100% | |
| Life insurance | 100% | |
| Disability insurance | 100% | |
| Paid parental leave | 100% | |
| Housing | 10% | |
| Childcare benefits | 10% | |
| Tuition benefit | 10% | |
Source: U.S. News and World Report rankings, March 2024.
Like U.S. public universities, all public K-12 school districts in this exercise offer some form of retirement plans and health plans. Most offer a choice between DB and DC plans, along with additional tax-deferred compensation plans.
Additionally, all school districts provide comprehensive health coverage, including medical, dental and vision as well as disability and life insurance options. Paid parental leave is becoming a majority practice among these K-12 public school districts, in addition to job security requirements mandated by the FMLA.
Unlike the 50 largest U.S. public universities, housing, childcare benefits and tuition benefits are not common in these K-12 school districts. However, wellness programs are becoming a prevalent offering, either as standalone programs or as part of employee assistance programs (EAPs). These programs typically include mental health services, childcare search assistance, pet care assistance, counseling services, financial advising and more.
While many countries look to the U.S. public compensation and benefits structure as a model, it is important to recognize that these systems reflect local economic conditions and governmental structures, which may not directly compare to other countries. However, by studying and adapting U.S. compensation practices at the public level, countries can develop systems that attract top talent and provide sustainable, fair and motivating compensation packages that acknowledge the crucial role educators play in shaping the future.
Navigating these complex decisions and aligning them with your country’s regulations and organizational goals requires expertise. We help guide you through this process, ensuring your educational institution offers customized compensation and benefits packages that serve your mission but also consider global best practices.
