CCOM All Faculty Meetings

Q: I'm considering starting phased retirement in July 2009. How will the proposed changes be implemented in the phased retirement plan?

A: Individuals in the Phased retirement program have the same insurance benefits as active faculty.

Q: I am a faculty member in the CCOM and plan to retire at age 62 after working here for over 30 years. What is the dollar amount that the university contributes toward health insurance and does this amount change at 65 when the University's health insurance becomes the Medicare supplemental?

A: For 2008 we contribute $183 per month towards the faculty insurance plan.  There is no contribution for a spouse or children. The contribution amount is the same for people over 65.  This currently pays approximately 50% of the premium cost for a single plan.

Q: It seems that the more fair way to handle benefits would be to afford every single employee the same benefit. This would not penalize spouses who both work at the UI. We should be rewarding couples who are both committed to the success of this institution.

A: The new benefit program as proposed by FRIC does this by offering each employee a single health and dental policy, life insurance, and a LTD policy at no cost along with a general credit to use for other benefit programs.

Q: Financial advisors external to UI staff (banks, lending institutions, financial advisors, etc.) encourage us to meet with them to make recommendations regarding TIAA-CREF. Do staff benefits have any advice or concerns that faculty should be aware of?

A: We believe a person should learn as much as they can concerning their investments for retirement.  It is a good idea to get information from various sources so a person can make choices they are comfortable with. Also, a person need to look at the long haul not just what happened yesterday.

Q: I will retire before my offspring finishes medical school. Since he is a full-time student, his health insurance is currently on my university benefits plan. When I retire I will be eligible for retiree health benefits. May I still purchase health insurance for him on the university plan as a retiree?

A: Yes.  Spouses and children can continue to be covered as long as they are a qualified dependent.

Q: This question concerns how much money will be taken out of external grants for fringe benefits. In the past if a faculty member took insurance through a spouse's plan, the excess funds from the University contribution and the fringe rate charged to grants were placed in the faculty members flexible spending account. Under the new plan, when fully implemented, there will be a surplus of funds. Will the fringe rate be reduced to match the cost of the benefits for that faculty member?

A: What the University spends for benefits will most likely continue to increase. The changes for calendar 2011 will hopefully slow down the trend line.  The fringe benefit rates are set two years out as a result of how the government sets the rates with the University.  So the change in 2011 will first affect fringe rates in 2013.

Q:  The university has provided a health insurance program for retirees to supplement Medicare for many years. With an elderly faculty and staff approaching retirement, what is the current outlook for this program? Will it continue into the future?

A: We can never guarantee what will happen in the future.  It is current state law that retirees are offered health insurance. Whether or not there is a contribution towards this cost is a University decision. We cannot control what goes on at either the State or the Federal government which could affect the future.

Q: Many universities that have SRA accounts in their 403b plans allow the use of low expense mutual funds from providers like Vanguard and Fidelity as well as TIAA-CREF. (http://smu.edu/hr/Benefits/Retirement.asp) Over a 30-40 working life a difference of 0.5% in the expense ratio of a mutual fund can lead to accumulation differences of tens of thousands of dollars. How can the faculty affect the decision about which mutual fund companies are allowed to participate in the SRA?

A: Fidelity is one of our SRA carriers. Vanguard has been asked but has said no. In addition, the Federal law concerning the operations of our retirement plan is changing as of 1/1/09.  Because of this change some of the companies offering retirement products are withdrawing from the market, such as Northwestern and Nationwide.  At this time I can only say that TIAA/CREF, Fidelity, Sun America and Valic have stated they will continue in 2009. We encourage individual faculty to express their opinions on retirement issues to their faculty representatives on the Funded Retirement Insurance Committee (FRIC).

Q: What is the difference between TIAA and a pension? with so many people losing there employee sponsored pension plans what if any guarantees are there that TIAA benefits will never be lost.

A: A pension is a defined benefit plan that guarantees a set monthly amount to be paid to the retirees.  It is guaranteed up a federal max set each year, about $45000. TIAA/CREF has limited guarantees since it is a defined contribution plan. The funds are only really safe under the CREF mutual fund money market funds, not the CREF money market fund. Currently TIAA has a guarantee of about 3.5% each year.  I think it is currently paying around 6%.

Q: Will there be changes in the healthcare plans for retiring faculty? Specifically, will the minimum age of 55 for retiring faculty to keep health insurance change?

A: Retirees participate in the same health plans as the active employees do. If a person retirees from the University on or after the age of 55 they get to keep their health insurance if they wish.  The age 55 rule is mandated by state law. If a person does not continue their health insurance once they retire, they are not allowed to come back in to the health plan.

Q: There are a number of people in with the same issue that I have with this change. When the flex change goes into effect and we all get $90/month, it will mean I will lose around $3,000 per year in flex benefits that I currently use for medical expenses. I will now have to pay for these things out of pocket. Having to pay this amount of of pocket, amounts to a large decrease in pay for me. Is there anything being done to make up for what amounts to a reduction in income for those of us in this situation?

A: There is limited information here about what this person is doing with their current benefit programs in order to generate the $3000. In general, a person would receive $90 per month as a General Credit along with potentially $200 per month for waving health insurance, $25 for waving dental insurance, and $40 per month for selecting a $50,000 life insurance policy instead of two times their salary. By doing all the listed options, a person would receive $355 a month or $4260 per year in credits which could be applied to a health or dependent care spending account.