TO THE EDITORS:

Robert Kennedy said that when men of good will do nothing in the presence of injustice, they must bear some of the responsibility.

I am a 76-year old alumnus writing you about an injustice being done by Harvard Resources Department to older staff employees when compelled by Harvard to take early retirement.

The injustice is not in the amount of the termination settlement, but in the method of payment; i.e., a lump sum payment which imposes on the employee an immediate, up-front, 40% tax liability.

This problem came to my attention when a fellow church member, a woman age 61, who was a staff employee of Harvard, came to me for financial advice, as I am treasurer of her church. She was being forced to take early retirement and had been offered a lump sum settlement of approximately $100,000, of which she would be obliged to make an immediate payment of 40% in taxes, leaving roughly $60,000. I prepared for her a proposal for a 10-year payout that would more than double the value to her at no added cost to Harvard, except for the administrative expense of ten payments vs. one.

My friend forwarded the proposal to Polly Price, Associate Dean for Human Resources. Ms. Price rejected it on the grounds that: "that particular form of benefit payment, under federal laws applicable to retirement plans, would constitute a retirement plan all unto itself. It could jeopardize our whole retirement program for faculty and staff."

Ms. Price's response, in which she characterized a negotiated termination settlement for an employee forced to take early retirement as a "retirement plan" was, in my opinion, disingenuous. Prior to my suggesting the 10-year payout plan, I had discussed with Phil Lima of the Benefits Administration the procedure followed in arriving at termination settlements. I specifically asked if multi-year payouts were permissible. His reply was that "FAS could strike any deal it wanted" and he went on to point out that negotiated settlements do not involve the use of restricted pension funds.

Even if it were the case that multi-year payouts are currently prohibited, surely the Human Services Department has the expertise, if it wants to, to modify its retirement plan structure so that multi-year payouts are permissible and still fall within federal guidelines.

At least there was one argument in support of the lump sum policy that, fortunately, Human Resources did not make; namely, that since 60% of the settlement was the full amount that Human Resources felt the retiree was entitled to, why should there be an outcry if the remaining 40% went to the IRS. That would be a specious and cynical argument. Harvard's proposed settlement, even including the 40% to the IRS, fell far short of making up my friend's lost retirement income. Hence, it us obviously in the interest of both Harvard and the retirees that the funds available for termination settlements should be for the benefit of the retirees and not the IRS.

The method of payout is of overriding importance in termination packages. Attached is a detailed comparison of two payout plans as follows:

*Plan A--

Type: Lump sum

Cost to Harvard: $100,000

Benefit to retiree: $60,000

*Plan B--

Type: Ten-year payout

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