Benefits Committee
Meeting Minutes: November 18, 2008
Clydesdale Hall, Room 301
Attendees: Chair Allen Hahn, Jack Batterson, John Bauman, Doris Littrell, David Mehr, Mike Paden, Jere Gilles, Lisa Wimmenauer and Roger Heath.
The meeting was called to order by Hahn at 10:35 am
We reviewed our committee charge from the website.
Mike Paden reviewed the impact of the economic situation on retirement benefits. Sept ’07, the retirement fund was around $3 billion. As of last month, it was $2.1billion. While this is a major concern it should be noted that the pension plan is coming off of 5 years of double-digit returns. The University’s actuarial consultants are currently determining the effect of this downturn on UM’s contribution requirements to the plan.
The University currently contributes 5.8% of S/W to the retirement fund (employees do not contribute) and will likely raise its percentage because of the current conditions of the market. The University has reserves that help deal with fluctuations. The plan’s actuaries assume a rate of return of 8%. Every 5 years they test actuarial assumptions.
The University has adequate liquid assets in the pension plan at this point in time so that it is not necessary to sell any equity assets. RETIREES HAVE A LEGALLY ENFORCEABLE RIGHT TO BENEFITS UNDER THE PLAN, SO UM RETIREMENT PAYMENTS ARE NOT IN JEOPARDY, AND THERE ARE NO PLANS TO CHANGE CURRENT RETIREES’ PAYMENTS.
Health plan and retiree retirement plan contributions are the first items addressed in the general operating budget before salary increases are considered. Independent actuarial consultants review the plan each year to determine the appropriate contribution requirements for the plan.
The hiring freeze, as announced yesterday by President Forsee, is real and campuses will be held responsible.
Our pensioners are in good shape compared to pensioners from other employers that offer only a defined contribution plan where employees bear the market risk.
Discussion of 403B and Roth options:
We had to re-contract with 403B providers. Vanguard has given some small problems in the process. The other 9 providers were no problem. Not all providers will allow Roth accounts. Mike Paden will notify us when the Vanguard situation is resolved.
Discussion of drug prices:
Wal-Mart and others may have “loss leader” prices, which would make prices different for different drugs and different pharmacies. University Pharmacy should be same price as Express Scripts Home Delivery for 90 day prescriptions of maintenance medications. Medicare eligible retirees enrolled in the UM Retiree Indemnity Medical Program will get a new i.d. card and mailing from Express Scripts the first of the year.
Questions about data leaks from Express Scripts:
Express Scripts is offering a $1million reward for apprehension of those responsible, and offering free identity theft protection for those affected. Anyone enrolled in the medical plan can be affected. Social security information was breached. No credit card information was breached.
For future reference, Mike will be exploring how to have retirees’ email addresses on a list to share information from the University.
Our next meeting is Tuesday, January 13, 2009, at 10:30 a.m. at the Faculty-Staff Benefits office, Building 7, Suite 210, Woodrail Center on Nifong.
Respectfuly submitted,
Doris Littrell
Secretaru Pro Tem
