Newsletters

November 2006

From Our President's Desk

Congratulations I We won aT-shirt! "We" are MU and UM retirees living in the Columbia area who have collectively contributed $41,802 to the Columbia Area United Way as of October 19 -85.07% of our goal. That's the highest percentage-of-goal among the several divisions-and that achievement earned us a T-shirt. Those contributions came from 9.04 % of all campus and system retirees in this area-up slightly from the participation level a year ago at this stage. But the flip side of is that about 91 % had not participated at the time of that tabulation. But, it's never too late. While the United Way campaign officially ended on Oct. 31, be assured that a post-deadline check will be accepted. Please help boost that level of participation. (Campus-wide, as of Oct.17, $318,113 had been pledged, 59% of our campus goal of $540,000.)

Now, many of us have had it with requests for money! How many requests? Over a recent four-day period I counted all that came to my mail box: ten from charitable organizations; three from political candidates; two invitations to join organizations (for a fee, of course); and one to enroll in yet another insurance program. I didn't count the actual bills for recent purchases, nor credit card applications. All those charities are worthwhile and do good work. However...

The answer? Mine, anyway, is to support those that are local, with the lowest administrative costs, with some personal significance, and with a successful track record. The U-Way campaign meets those conditions and funds 32 agencies that help our fellow mid-Missourians.

Incidentally, those weekly United Way reports underscore one of our perplexing problems: The number of MU and UM retirees in the Columbia area is significantly larger than the number of MURA members. How might we turn those figures around? A gift T-shirt for the best answer. (Note: It's an X large.)

Rod Gelatt

Development of the University of Missouri Benefits Program

by John Bauman

During a four-year period some 50 years ago, the retirement program that we know today was developed. In early October 1954 the Committee on University Policy met with President Elmer Ellis to receive his recommendations on subjects with which the Committee should concern itself. His principal recommendation was that UM establish a staff benefits program to include both retirement benefits and medical insurance. At that time UM was the only major educational institution in the country without an employee retirement program.

Professor Raymond E. Peck, chair of this committee, wrote a lengthy report of events that occurred during the four years that followed. I herein attempt to summarize Peck's account. UM's plan developed through long and careful deliberations among staff, the UM administration, our Board of Curators, and consultants. I herewith gratefully acknowledge the efforts of these many people.

A sub-committee on retirement was appointed, with Professor Raymond Schroeder as chair; and on insurance and hospitalization, with Professor Bill Eckhardt as chair. The local chapter of AAUP also became interested in providing guidance. The sub-committees looked at contributory plans such as TIAA, but university salaries were so low in 1954 that a withholding of 10% to 15% of salary for retirement was unacceptable. A fourcompany contributory plan had been formed by the administration in the early nineteen-forties, but abandoned in 1952.

Goals of the prospective plan were to:

Provide retirement income to staff members and dependents.
Provide for inflation,
Preserve the levels of take-home pay,
Provide the University and employees with the most value for money invested.

Professors from B&PA, most notably Robert Bray and Russ Bauder, were of great help in constructing the plan. Meetings were held with TIAA, Bankers Life, and MSTA. Plans from many other states were studied. The Universities of Kentucky and Iowa appeared to be the most suitable. Both of these Universities placed retired faculty members on limited service and continued with reduced salaries.

A new draft provided for:

Retirement at age 70 or optional 65.
Reimbursement for limited service at 20% of the average of the highest five years plus 1% for each year of full employment.
Special assignments would be of the retiree's own choosing.

The AAUP committee insisted on full vesting and favored contributions.

They dropped out of the planning process when the faculty voted overwhelmingly to follow the Limited Service Plan. Unfortunately the interpretation of the University General Counsel was that the plan was unconstitutional. Salaries from public funds could be paid only to persons performing certain designated duties. But it was learned that Justices of the Supreme Court of Missouri were retired on partial salary as consultants to the Court. Further study of the State constitution showed that "the General Assembly may authorize payments from any public fund for paying benefits upon retirement to persons employed and paid out of any public funds for educational services."

In May of 1955 the Legislature and the Governor granted permission for a University retirement and benefit program. Next followed long years of committee discussion on the details of the plan. It was proposed that pensions cover spousal benefits, and that total pension payments be based on 20% of the highest five years plus 1% for each year of service. Agricultural Extension workers were covered by Federal retirement, a contributory program. After much discussion it was ruled that we could not afford a second retirement plan for Extension staff. Another problem was how to handle nine month versus twelve-month appointments. Summer appointments would not be cOlmted in an employee'~ highest five years.

The plan then entered the phase of cost studies. The Committee and personnel of the Business Office made extensive calculations. The Board referred to Nelson and Warren, consulting actuaries in St. Louis. Nelson submitted an actuarial plan. November 10, 1956 the Committee produced another draft. For each year's service staff benefits would be:

0.6% of salary to $1400,
1.2% of salary from $1400 to $2800,
1.8% of salary from $2800 to $4200,
2.4% of the balance of salary.

This allowed a smooth curve for University benefits and OAS!. No saiary years over $9,000 were counted. Furthermore, benefits could not exceed one-half of the retired employee's own average salary for his highest five years. The proposed plan provided protection against inflation, not only during the period prior to retirement but also after retirement.

On October 12, 1957, the Curators asked that our plan be compared with the plan of four other universities, two of which were the University of Michigan and the University ofIndiana. On April 11,1958 a Board of Curators committee recommended to the entire board that the University of Missouri Retirement Plan be instituted during the 1958-59 school year. All that was needed was a cost study, which was presented to President Ellis on June 2, 1958. On June 11, 1958, President Ellis, Professors Schroeder, Eckhardt, and Bray, with Mr. Bezoni, visited with Charles Young of the City National Bank and Trust Company of Kansas City. Young contacted Hilary Seal of the actuarial firm of Morse, Seal, and Tebbets ofSt. Louis and New York City.

Seal found that. ..

Our plan was perfectly feasible.
The budget formula was O.K.
It was an excellent idea to gradually fmance the plan going from 2% to 6% over the following five years,
An actuarial study be made in 5 years.
The non-contributory approach is excellent.
The so-called 'cost of living adjustment' should be hedged,
Survivor pensions are excellent.

On August 25, 1958 President Ellis wrote to Seal that the Board of Curators committee had reviewed his report of July 17 and was pleased with it. Ellis instructed Seal to rewrite the plan with revisions:

Remove the escalator clause.
Use a more simplified formula forbenefits.
Set the retirement age at 70.
State that the Board would review the plan from time to time.
Include a working committee to administer details of the plan for the University President.

Seal's version of the plan was presented in person to the Board of Curators at their October 1958 meeting, and it was adopted on November 8, 1958. The guidelines were as follows:

The plan was to be administered by the Retirement Committee of the Board.
The benefit formula would consist of one percent of the highest five years mUltiplied by the number of years of service up to 30 years.
One-half of the retiree's retirement income would be provided to the surviving spouse.
Employees would become eligible upon receiving tenure or after ten years of service in a non-tenured position.
Payments should be made from the retirement fund using University offices.

In a letter to Professor Raymond Schroeder nearly twenty years later President Ellis said that he considered this retirement plan to be something of which he was the most proud. Our thanks today go to Professors Ray Schroeder, Ray Peck, Willard Eckhardt, Robert Bray, Paul Burcham, and Messrs. Ray Bezoni and Marvin Caldwell, in addition to many others who worked tirelessly during the four years it took for this to be developed and instituted.

No increase in 2007 Premiums for Retirees Enrolled in the UM Choice Plus Point of Service Program

by Mike Paden

Many thanks to all UM retirees, spouses, and dependents for your continued efforts to be efficient consumers of health care services. You play an important role in all of our attempts to control the increase in medical plan premium costs for retirees and our University.

We're very pleased to announce that there will be no 2007 increase in premiums for retirees enrolled in the UM Choice Plus Point of Service Program. For retirees enrolled in the Retiree Indemnity Medical Program, there is good 2007 premium news as well. For those who retired prior to 9/1/90, the "average" change will be a 4% decrease. For those who retired on or after 9/1/90, the "average" change will be a 2% decrease. Please note that the word "average" is used to make you aware that the rate of change is based on enrollment category (i.e. retire, retiree & spouse, etc.) and, accordingly, it will not be an "across the board" change for the Retiree Indemnity Medical Program in 2007.

Also, for 2007, we will continue with the same arrangement with Express Scripts for retiree prescription drugs. Retirees will not be required to enroll in Medicare Part D for 2007.

Beginning on January 1,2007, we will also be offering a vision benefits program to retirees. VSP is the company that will provide this coverage. This coverage will feature very reasonably priced monthly premiums ($6.50 for retiree and $13.00 for retiree and spouse). Benefits will include an annual exam for a $10 copayment. Frames and lenses will be available for as low as a $25 co-payment as well.

Retirees are currently receiving direct mailings with details explaining the plan, informational meeting opportunities, and the 2007 enrollment process. Detailed information about the plan and VSP and its provider network is available on-line at UM Faculty & Staff Benefits web site www.umsystem.edu/ums/departments/ hr/benefits/. In accessing this website, please look under 'What's New' for this information.

The Aging Front

by Ann Gowans

First, let me pass on a scam warning received from the Columbia Police Department. A group out there calling itself 'National Medicare Foundation.' is phoning seniors and telling them that they are entitled to a refund for prescription drugs or other Medicare services. If you will give them a routing number so they can directly access your checking account, they will deposit the money directly into your account. Watch out, they mean to withdraw from that account instead. Never give anyone this kind of information over the phone. If you are called, immediately report the call to 1-888-515-6565.

To bring you up to date on state legislative issues, the fall meeting of The Aging Federation opened with a report from Erik Felter ofthe Lt. Governor's office, who updated the plan currently in force for assisted living. As of now, no state inspections of 'assisted living' facilities will occur until after April I, 2007. This will allow the industry time to acclimate to the new rules set down by recently passed legislation concerning assisted living.

Felter also noted that hospice patients can be served in assisted living facilities and that the mental health community is quite concerned about the fact that many homes that have specialized in serving mental health patients are threatened by the new legislation. This has happened because a number of these facilities would not meet the requirements of the state for this level of care. This would mean that it is recognized that a safety threat to seniors is a primary concern when mental health patients are mixed in the same facilities with the general senior population.

Some ballot issues coming up in November include Amendment Two, the stem cell initiative, and Amendment Three, the tobacco tax. Also included are Amendment Seven concerning felony issues with elected officials, and Proposition B, concerning minimum wage.

We discussed whether or not voter ID would need to be shown at the polls for the upcoming election. By the time you read this, the decision might very well have been made.

We have discussed a 'single point of entry' to the overall state senior service system, for many years. We need to have something in place whereby any citizen, regardless of Medicaid status, could learn what services are available to caregivers, patients, and all older persons. This kind of input has been available in the past only to those on Medicaid.

Other items of interest were discussion regarding Missouri RX, the plan to help Missourians make their way through the donut hole in the current Medicare Drug bill. As of now, all patients whose incomes are up to 200% of the federal poverty level will be eligible for Missouri RX. You might want to check that out.

We looked at the current state of guardianship and abuse and noted that a document addressing this matter was presented recently to the U.S. Senate's Special Committee on Aging. 'Do Not Resuscitate' legislation is also under discussion, with support growing for passage of this effort after changes are made in wording.

These discussions of ongoing issues of concern to you as senior citizens of Missouri are important. I hope you will become informed about these issues and vote accordingly.

Here's wishing you a great fall season. Enjoy our trees as they change color with the falling temperatures. Stay in touch.

Holiday Luncheon

Santa's Gifts
It's time to share the joy of our holiday season by pledging your gift(s) for the drawing at our December 6 Holiday Luncheon. Many members have shared their arts, crafts, and spirit of giving in the past by providing gifts. Ifyou would like to be a part of continuing with this tradition, please provide G.B. Thompson, Santa' sChief Elf, with a brief description of your gift to him atphone 4454339 or e-mail gbt4cd@mizzou.edu. Please contact G.B. by Friday, December 1.
Book Exchange
This is to once again invite all of you attending our 2006 Holiday Luncheon to bring a give-away book to share with others. Upon arrival, just place your gift-book on the 'literary table.' Then, at the conclusion of our luncheon, choose a book from the table to take home and enjoy.