Sweet Briar plans temporary suspension of retirement benefits, layoffs to close budget gap

SWEET BRIAR -- Sweet Briar College will temporarily suspend retirement benefits and lay off some workers to make up for a $950,000 revenue shortfall caused by lower-than-expected fall enrollment numbers.

The college enrolled about 40 fewer students than it projected this fall, said President Jo Ellen Parker.

"This economy has been so hard on so many families . . . I think this year we underestimated how much families need for financial aid," she said.

The school plans to recoup the biggest chunk of the shortfall -- about 50 percent -- through a five-month suspension of retirement benefits for all employees. Other cuts include laying off up to five full-time employees, suspension of pay for senior staff, deferral of nonessential maintenance and purchases and a partial hiring freeze.

The goal of the budget cuts is to protect the school's $83 million endowment, which reached a low of about $65 million after the financial crisis last fall. Before the crash, the endowment was stable at about $95 million.

The school's annual spending rate from its endowment is 6.25 percent, just shy of its goal of 5 percent. The cuts allow it to balance the budget without dipping further into the endowment, Parker said.

Parker said that although Sweet Briar has experienced healthy growth in the past decade, the college is not immune to the ripples of the recession. The college attracted 225 freshmen in 2008, its largest class in 25 years.

"We have been very, very fortunate . . . but we're not immune and this year we have to respond to the current situation," she said.

The plan could change in coming months based on factors such as winter utility costs, the results of the annual fundraising drive and the overall health of the stock market, Parker said.