For years, USC has been boosting retirement payouts to its highest-earning employees in a little-known practice that has cost at least $10 million over the last three years, an Annenberg Media analysis has found.
The university at large learned about the retirement policy when interim President Beong-Soo Kim announced it was ending in a Nov. 3 email.
Kim said USC would halt a “payroll practice benefitting many of the highest compensated members of our community.” This practice likely had been paying out thousands to Kim in his role as the university’s general counsel since at least 2022.
Using USC’s tax documents, Annenberg Media conducted a detailed analysis of the decades-old practice.
In a statement to Annenberg Media, the university described the policy as a way “to provide the same 10% maximum retirement match opportunity to all employees covered by the university’s 403(b) retirement plan.”
“Because employees above a certain compensation level ($350,000 as of 2025) are subject to IRS contribution limits, USC would bridge the difference between those contribution limits and the university’s 10% maximum retirement match,” the statement read.
In other words, the highest-paid employees are receiving a direct payment to boost their earnings beyond what USC needs to pay. The practice is referred to on at least one internal document as “retirement restoration.”
Traditionally, the university pays 5% of an employee’s salary to their retirement account. If an employee contributes 5% to their account, the university will match that. This means an employee can get 10% from USC toward their retirement savings — a substantial employee benefit that is not a standard workplace offering. However, if the employee makes more than $350,000, the IRS will restrict the amount that USC is allowed to contribute to the account.
This means the university is spending heavily to give even more to people earning above that annual salary; the retirement boost is 10% of the portion of the salary that exceeds $350,000, and it is paid directly to the employee. For example, Trojan Football Head Coach Lincoln Riley, due only to his salary of $10.2 million, would be paid over $1 million through this policy.
Using employee salary and retirement contributions listed on USC’s Form 990 — a mandatory public tax form submitted by nonprofits — Annenberg Media estimated the cost of this particular bonus for the fiscal years 2023 and 2024. The former year amounted to almost $3.4 million. The latter amounted to more than $3.5 million.
Considering that four of the five highest earners of “retirement restoration” were still working for the university during fiscal year 2025 and the amount attributable to the policy was on an upward trend, Annenberg Media calculated a low-end estimate of $10.2 million for the past three years.
The university did not confirm nor deny Annenberg Media’s estimates.
Those listed on USC’s Form 990 include top-earners such as former USC President Carol Folt and Keck professors Vaughn Starnes and Louis Vandermolen. All were paid millions by the university, well above the $350,000 limit.
The university stated that not all employees that are covered by the policy are listed on the Form 990. Because of this, Annenberg Media’s estimates are likely to be far less than the actual amount spent.
The abolition of the policy will save the university millions of dollars going forward. However, some faculty members — like Staff Assembly President Phil Turner — claim the damage has already been done.
“I would equate it to going to your spouse and telling them the following: ‘I want you to know that you should be really proud of me, because I’ve decided to stop cheating on you sometime next year,’” Turner said to Morning, Trojan in regard to the policy.
The university stated to Annenberg Media that the retirement policy has “been in place at USC for several decades, is not unique to USC, and has never been hidden in any way.”
“At a time when everyone in our community is leaning in to support the university, it is unfortunate that anyone would mischaracterize this longstanding practice in ways that needlessly sow division,” the university wrote.
Predating Kim’s announcement, the only online reference to this policy was on a contract template document that appears to be created by Keck Medicine labeled “CONFIDENTIAL.” The document, which does not appear on public-facing websites, notes, “This program is subject to change or elimination with notice.”
Analysis of the Form 990s submitted for Stanford University, the University of Notre Dame, Ohio State University and the University of California system did not reveal signs of similar retirement policies.