Newsletters

March 2007

From our President's Desk

In this newsletter, John Bauman summarizes the status of the Retirement, Disability, and Death Benefit Plan for fiscal year 2004. I urge you to read it. As John notes, it's already three years out-of-date, but it's the most recent such report available.

I'm among the statistically-challenged, but I doubt that any of us has difficulty in getting the key point. During the more affluent period of the 1990's, University of Missouri retirees received annual pension adjustments averaging 2.66%. (The key word here is "averaging.") But since 2000, UM retirees have received only one raise-that of 1%. Retirees did not share in salary adjustments distributed among active faculty and staff in 2001-2002, 2003-2004, and 2004-2005. No one received an increase in 2002-2003.

Refer again to John's message: During the 1990s, the goal of the retirement plan was to increase retirees' pensions by an amount equal to 2/3 of the salary adjustment available to active employees. Sadly, this policy has not been sustained. The 2/3 formula was the intention for years, so long as the University's financial situation-in the judgement of the President and Curators---could afford it. The following statement appears in a number of documents: "At the discretion of the Board of Curators, and when resources are available, consideration may be given to providing increases in retirement benefits" (read pension).

Overall, the UM retirement program is a good one. Unlike many others, it does not require contributions from participating employees. Moreover, the plan appears financially sound, with (an unofficial estimate) more than $2.3 billion in current assets. Point: The providing of a modest pension adjustment would not bankrupt the fundi Rather, it's a matter of convincing those who control the fund of the need, and making the point that an adjustment is deserved.

In that regard, the University of Missouri Retirement and Staff Benefits Committee approved in February 2007 a recommendation to the President for pension adjustments to take effect in September, 2007. It's now up to the President, the Board of Curators, and, eventually, the General Assembly.

Rod Gelatt

Nominees for election to Board of Directors

Our nominating committee is pleased to offer the following nominations for election to Board membership at our Annual Business Meeting on March 24, 2006. Terms begin July I, 2007.

Respectfully submitted,
Tom Freeman (Chair), Charles Cramer,
Gary L. Smith, Ruth Meluski, Al Hahn

President elect and Program Chair (l-year term) Kee Groshong

From 1965 to retirement in 2002: Assistant to MU's Director of Accounting, Accounting Services manager, Director of Business Services, Vice Chancelior of Administrative Services; Barbara S. Uehling Award for Administrative Excellence (1988); Columbia Chamber of Commerce Board chair (1998-1999), Citizen of the Year Award (2002); Regional Economic Development Inc. Board chair (2002). Presently: Mizzou Credit Union Board chair, First Baptist Church treasurer, Columbia South Rotary Club, Columbia Railroad Advisory Board, Mo. River Valley Steam Engine Association board, Chamber of Commerce committees, University Club board, MURA Board of Directors. Hobbies include travel and restoring antique farm tractors. Married to Columbia native Diana, sharing two children and two grandchildren-all of Columbia.

Member at large (staff) (3-year term) John Parker

Bachelor of Arts from M.U.-Psychology and Sociology, Bachelor of Science from K.U. Education and History, Master of Arts from the University of Denver, Doctorate of Education from M.U. Teacher of American history in Raytown Public Schools; Admissions Officer, Kansas Wesleyan University; Chief administrator of continuing education, University of Denver; administrator of continuing education at U.M.K.C.; At M.U., Business Office and Extension and Regional Director of Extension. Since retirement in 1996, campus liaison for Extension retirees; founder of Community Lecture Series in Colwnbia; founder of M.U.'s Lifelong Learning Institute; presently holding the title of Consultant with M.U.; working to establish ties with universities in Thailand and working to place retired M.U. professors in other countries. Elder, First Presbyterian Church

Member at large (faculty) (3-year term) Dick Dowdy

Associate Dean Emeritus (Human Environmental Sciences). Joined the M.U. faculty in 1976. Received his doctorate (nutritional sciences and biochemistry) from North Carolina State University, worked for five years as a labbench scientist for the U.S. Army (Denver, Colo.), and served on the faculties of both Lincoln University (Jefferson City, Mo.) and Colorado State University (Ft. Collins, Colo.) before coming to M.o. to chair the Department of Nutritional Sciences, a position he held for 15 years. Before retiring in 2002 (actually, in May 2005, after being hired back for 2 1/2 years), he served as Assoc. Dean for Research and Graduate Studies in the College ofHES for II years. He served on M.U. Faculty Council (vice-chair for two years), the Intercollegiate Athletics Committee (chair for two years), was M.U. campus chair for United Way Campaign, served on the Columbia Area United Way Board for several years (including serving as Board President), and was awarded its Jack Matthews Award. He has also received the Gamma Sigma Delta Award for Excellence in Administration.

Benefits Program

by Mike Paden

UM's new Vision Benefits Plan (pdf) went into effect January 1,2007. Some 6,503 active faculty and staff and 1,158 retirees have enrolled in the plan. The good news for retirees is that VSP and the University have come to an agreement that allows retirees who chose not to enroll for 2007, to enroll in the plan during subsequent enrollment change periods. For those who did not enroll as of January 1,2007, the next opportunity to enroll will be during the 2007 enrollment change period in November, 2007. Retirees will be reminded of this option by our benefits office in advance of the enrollment change period.

On a different subject-periodically we receive questions from retirees regarding the use of Medigap coverage in addition to the coverage available through the UM Medical Benefits Plan or as a replacement for UM's Medical Benefits Plan. We, of course, can't advise retirees on this matter, but we can do our best to inform retirees of different aspects to consider.

Typically, the level of coverage provided by UM's plan and, particularly, the level of premium subsidy provided by UM toward this plan, preclude a retiree from considering Medigap coverage as a replacement for UM coverage. There may be certain situations where a person with a short employment period with UM (and a lower level of UM premium subsidy), may want to consider Medigap coverage as a replacement for UM coverage. The Retirement and Deferred Compensation Plans section of UM Faculty and Staff Benefits can help retirees who may want to consider Medigap coverage as a replacement.

In regard to purchasing Medigap coverage in addition to UM Medical Plan coverage, it's important to remember that the UM Medical Plan has annual out-of-pocket limits beyond that which the UM plan pays 100% of eligible expenses not paid by Medicare. In terms of risk exposure for plan-eligible expenses, that would be limited to the out-of-pocket limits under the plan.

The Pension Issue

by John Bauman

In our last newsletter I traced the beginnings of our Retirement Plan (pdf) of 50 years ago. In this column I want to bring you an up-date on the recent implementation of the plan. My data are complete to September 30,2004.

In 2004 there were 6,354 pensioners in the program: 50% academic and administration, 35% clerical and service, and 15% inactive. Retirees accounted for 85%, and beneficiaries and survivors accounted for 15%. In 2004, of the 100.6 millions of dollars paid out, 93.2 was in annuities, 1.0 in death benefits, 1.8 in lump sums to retirees and 4.6 lump sums to terminated vesteds. Total administrative costs for the year amounted to $10.2 million.

Income to the plan comes from University contributions and returns on investments. For 2004 the University contributed $48.3 million, which represented 7% of payroll. Total assets of the fund were $2.075 billion, and total actuarial liabilities were $2.144 billion. Funds were invested under two basic strategies, diversification and growth. Fourteen money managers were used. Asset evaluation by class included domestic equities, 45%; international equities, 20%; global fixed income, 19%; emerging market equities, 7%; real estate, 7%; and alternative investments, 2%. Return rates for 2004 averaged 13.1 %.

Average pension payments in 2004 were $21,80 I to academic and administrative personnel and $7,473 to clerical and service personnel. During the 1990's pensioners received annual increases averaging 2.66%. Since 2000 pensioners have received only a single 1% increase. CPI increased 3.59% per year in the 1990's and remains at around 3%. During the 1990's the goal of the retirement plan was to compensate retirees 2/3 of the salary adjustment for active employees. This goal has not continued. The Retirement and Staff Benefits Committee, as well as representatives of retired personnel at all four campuses, continue to pursue this matter with central administrators.

The Aging Front

by Ann Gowans

The Governor's Advisory Council on Aging recently heard reports from the Governor's office, Department of Health and Senior Services, Silver Haired Legislature, and Aging Federation.

Eric Feltner, aide to the Lt. Governor for Senior Services, reported that Missouri's Rx Plan (MoRx) enrollment began on November I, 2006. The Lt. Governor traveled throughout the state on November 27-28 promoting Missouri Rx awareness and outreach. Eric added that Assisted Living legislation continues to be in the process of being included in the administrative rules and regulations.

A working group created by the Lt. Governor is reviewing Single Entry Point for Missouri. They are working with DHSS to create recommendations and strategies for implementing SEP. Brenda Campbell, director of the Division of Senior and Disability Services, provided a brief report. The division serves the State Unit on Aging and expedites Missouri's mandate regarding services for seniors and adults with disabilities. The division is also working on issues such as Medicaid reform, the 'Money Follows the Person' grant, transportation, emergency response, Older Americans Act changes, and DHSS mental health issues.

The Silver Haired Legislature agenda for the coming year includes the following:

Support a Single Point of Entry for all programs
Support strengthening regulations regarding payday loans
Support continued funding of home delivered and congregate meals
Support raising the asset level for those on Medicaid and support increasing the monthly stipend for Medicaid residents in long-term care facilities.

One of our Aging Federation's top priorities for the coming year is the issue of taxation of retirement benefits, which will be presented to the General Assembly during its 2007 session.

Advisory Committee Restructured

On March 1, 2006 the MURA Executive Committee had its customary semi-annual meeting with Chancellor Brady Deaton to discuss retiree issues at MU. In that meeting, MURA reps drew attention to the composition of the Chancellor's Retiree Advisory Committee. In sum, in the opinion of MURA observers serving on the CRAC, that committee was largely dysfunctional, with its only material action being that of choosing recipients of the annual Retiree of the Year Award.

The structure of the Chancellor's Retiree Advisory Committee at that time was as follows:

(Previous Structure)

(Voting members):

5 Faculty (3-year terms)
6 Staff (3-year terms)

(Ex-Officio Non-voting members):

2 Retirees 1 From Administrative Services 1 From Human Resources

In that March 1 meeting, MURA reps called to Chancellor Deaton's attention the facts that (a) retirees are more knowledgeable in identifying issues affecting retirees, and (b) retirees are more aware of the good works of those retirees nomi-nated for the Retiree of the Year Award. Ergo, MURA reps went on to suggest that the structure of the Chancellor's Retiree Advisory Committee be revised as follows:

(New Structure)

(Voting members):

4 faculty members (3-year terms)
4 staff members (3-year terms)
4 retirees (3-year terms)

(Non-voting members):

1 Ex-Officio Human Resources
1 Ex-Officio Administrative Services

Chancellor Deaton approved MURA's suggestion at the March 1 meeting and immediately advised Linda Cook, of our Provost's Office, to move the suggested New Structure-in every detail-along to Faculty Council for its consideration.

On June 15, the New Structure appeared on Faculty Council's agenda as a discussion item.

On August 3, Faculty Council (with quorum) unanimously voted to accept the New Structure. The Staff Advisory Council was offered the opportunity to discuss the proposal, but SAC declined because of its crowded agenda.

The New Structure became in-effect with Faculty Council's approval and now appears on CRAC's web site.

MURA Treasury Report Now in August Only

Previous issues of our MURA Newsletter have included a report by our treasurer, Bob Marshall. It has been suggested that in future years we include a treasury report only in the August issue-the customary end of the fiscal year. We do hope that this meets with our membership' approval.