Meeting Minutes
University Policy Committee for
Budget & Finance
Members Present:
Wayne Magdziarz
Bill Laird
Cindy Gony
Larry Fortuna
Tim McGuriman
Tom Kelly
David Beall
Tassos Malliaris
John Frendreis
David Schweikart
Marge Beane
Member Absent:
Brian Welsh
Minutes from the February 16, 2004 meeting were accepted as written.
Fringe Benefit Rate / 05 Benefits Budget
Tom Kelly provided a breakdown of the FY 2005 Benefits Budget.
Faculty and staff benefit rates for FY 05 are expected to be equal.
Salary increases, faculty adjustments and equity adjustments included in
projections. Healthcare costs projected out 18 months using industry
standard pricing. Statutory changes factored into retiree health costs,
which are attributed to employees 50 years and older. The university must
consider changes to retiree health coverage in the form of a
reduction or possible elimination of the benefit. Changes to Medicare
will provide more prescription drug coverage for retirees, which
accounts for the majority of coverage expense. Current retiree
contributions and future promise two main factors in the retiree health
coverage decision. Administration is considering a move towards a
cost sharing strategy and/or plan design changes to deal with retiree
health costs. One option would be to allow non- eligible employees
to buy into a retiree health plan. FY 05 Retiree health expense is $5.4
million; made up by $2 million for current retirees and $3.5 million for
future promise which will be invested. Bill pointed out that this number
is volatile and LUC must strategize to limit the benefit to a fixed
price yearly. John Frendreis suggested individuals be allowed to
set up healthcare retirement accounts, e.g. a defined contribution plan
with LUC contributing a matching percentage. Larry Fortuna recommended
a cafeteria plan with a fixed percentage for insurance, to be distributed as
individuals see fit; said plan could be portable with determined vesting
levels.
Bill would like to hold action on tuition benefit until new retiree
health model presented at next meeting.
Next Meeting
FAS 106 Promise Detail; Cost models. To be scheduled prior to
3/31/04 meeting.