Meeting Minutes
University Policy Committee for
Budget & Finance University Policy Committee
Meeting Minutes: August 12, 2003
Members Present
William Laird
Marjorie Beane
Tim McGuriman
John Frendreis
Dave Schweikart
Larry Fortuna
Wayne Magdziarz
Tassos Malliaris
Tom Kelly
Minutes from June 18, 2003 Meeting
Bill again stressed the need for strict confidentiality around matters
discussed in these UPC meetings.
The sixth sentence in the Benefit Plan paragraph of the June 18, 2003
minutes was corrected to read: "Bill suggested that a staff defined
contribution program may be worth considering ..." It was also noted that any
change to the pension benefit plan would be implemented as of January, 2004.
The amended minutes were approved.
Postretirement Design and Funding Issues
Hewitt Associates provided an overview of issues surrounding the current
pension plan, detailing recent asset performance, interest rate trends, and
contribution requirements.
Some considerations and constraints of LUERP include benefit levels linked,
by IRS rules, to benefits provided under the faculty plan. Additionally,
complete termination of the plan would require settlement of obligations in
an unfavorable interest/asset environment. Also, leverage from pension
assets means that over the short term, costs will differ from benefit
levels. It was also noted that for Loyola the risks/rewards go beyond
benefit commitment as the pension was "free" when investment returns were
high but since then benefit levels have not increased, but costs are now a
concern.
Hewitt pointed out that in addressing the pension issue, it should be noted
that pension benefits are part of an overall package and that the total
benefits perspective includes all retirement plans (pension and savings),
medical (active and retiree), time off, and more. In order to meet cost
savings objectives, Loyola must consider all major components. Loyola must
also address the issue of how the impact of savings are distributed namely
long vs. short service, employees with more vs. less seniority, single vs.
married, lower-paid vs. highly paid. Components of the decision will
include pension plan design: defined benefit vs. defined contribution, FAP
vs. CB, transition rules and employee choice. The investment strategy will
include compare equities vs. fixed and active vs. passive while the benefit
dollar reallocation needs to consider pension vs. healthcare (retired and
active) vs. PTO Active vs. Retired, Cash vs. Expense.
Discussions on the benefit package will resume at the next meeting,
scheduled for August 26, 2003, 1:00 p.m. - 3:00 p.m. at WTC, 25 E. Pearson,
Room 713.