Meeting Minutes for February 27, 2001

Present: Art Aikman, (ex officio), Jake Baggott (ex officio), Peggy Barnes (ex officio), Kathy Blackwell (ex officio), Brian Chapman (Chancellor's Representative), Patricia Hopkins-Price (Faculty Senate), Aslam Kassimali (Faculty Association), Steve Kraft (Graduate Council), Roland Person (Faculty Association), Ruth Pommier (Civil Service Council), James Swisher (Emeritus Association).

Absent: Vicki Benson (ex officio), Kevin Dorsey (Dean's Council), Worthen Hunsaker (Chancellor's Representative), Joann Marks (Civil Service Council), David Marx (A/P Staff Council), Doug McEwen (Faculty Senate), Andy Morgan (A/P Staff Council), Thomas Stitt (ex officio).

I. Announcements - None.

II. Approval of Minutes of January 30, 2001 
The minutes were approved as presented.

III. Approval of Agenda of February 27, 2001 
The agenda was approved as presented.

IV. Updates from Human Resources 
A) Peggy reported: 1) Larry Johnson will be conducting group retirement sessions scheduled for March 8, 20, 27, and 29. There will be a limit of 20 people for each session. Larry will be going over pre-retirement issues (buy-back, calculating time, insurance, etc.); 2) dependent certification for CMS will take place during March. Letters will go out to employees who have children aged 19-23; 3) SURS counselors will be on campus in late March. SURS originally scheduled three counselors to come to campus; however, there are fewer people signed up than was anticipated, so only two counselors are coming. It is expected that in the future there will be enough slots available for anyone nearing retirement who would like to attend a session.

B) Peggy announced her resignation from Human Resources. Her last day will be March 9. Kathy indicated she hopes to have the position filled soon. There is one internal candidate and one external candidate. Steve extended thanks and appreciation to Peggy for all her efforts for the committee and the University.

V. Subcommittee on Health Benefits 
A) Steve indicated the subcommittee needs to get organized. Jim indicated no one has expressed a desire to replace him as chair. Steve will attempt to find a chair for the subcommittee.

B) Jim stated he reported at the last meeting he received data from Jim Clarke (IEA/NEA) on benefits in Illinois versus other states. Jim mentioned that a lot of other states have their universities tied into social security. There is also a supplemental plan. What he did not know was whether the people that have social security are subject to the same kinds of offset problems SIU has. Jim stated he talked to Ron Jensen at the social security office and was told they are not. There is still the question as to whether one system is better than the other. It is a value judgment; there is no right or wrong answer.

With respect to Medicare issues, Jim stated about a year ago he was led to believe that in a few years almost all SIU employees that retire at age 65 would be in the Medicare system. That is incorrect. He talked with people in Payroll, and their best guess is that about half of the people will be under Medicare in about 10 years. So, there is movement in that direction, but not nearly as fast as he was led to believe. Steve asked what the criteria are to determine whether a person will be brought in. Jim stated it was pointed out by [Vicki] that people who started working at SIU before 1986 are not in the system. The only way they would be in the system is if they had prior employment under social security. People that started on or after March 1986 have payroll deductions for Medicare. If they have paid in 40 quarters, either as a University employee or that plus some prior employment, then they are eligible. Jim believes that employees need to know when they retire whether they are going to be in Medicare or not and how much difference it will make. It is estimated that in 10 years many people who started after 1986 and will be age 65 will have their 40 quarters in and will be retiring. That comes up to about 50% of the population of people retiring. Art suggested it could be more than 50%. He believes CMS has a policy that employees who are eligible for Medicare B and do not take advantage of it will [be penalized]. Jim pointed out the benefits handbook states if employees who are eligible do not take Medicare B, the state will only pay what Medicare B would not pay. If employees are not in Medicare A, then Medicare B is extremely expensive.

Ruth questioned what happened to employees receiving free insurance. Peggy responded the Illinois part is still free; Medicare is the federal part. Ruth indicated what she is hearing is that if she qualifies for Medicare A, she must buy Part B, and CMS will be supplementary. Peggy stated employees do not have to buy Part B; however, the state right now will penalize employees for not taking Part B and will only pay a claim based on what Medicare would pay. Employees will still have their state insurance, but it will greatly reduce what the state will pay. Jim noted this is not anything new but has been going on for the past six years. He indicated he did some research at the Law library and found the section on Medicare found in Section 40 of the [Pension Law]. It says nothing about being required to take Medicare B or being penalized for not taking Part B. The state is giving the impression that this is the law, but this is probably not true. Jim noted that an association of retired federal employees also studied this matter. They are not under the same pressure we are to take Medicare B. The conclusion of their study was that individuals who are in HMOs should not take Medicare B, and individuals in other insurance plans should take Medicare B because the benefits would exceed the cost. Jim reiterated that employees here have a choice, but not taking it will reduce their state coverage. Employees are being unfairly penalized.

Steve asked what kind of information is provided by Human Resources to alert employees planning for retirement to this potential problem. Peggy responded that if they see the employee has not been paying into Medicare, the employee is told to check with social security to see if s/he might qualify from either past employment or through a spouse. If there is any question, that is something the employee would have to take up with social security. Then, if the employee does not qualify, s/he will receive a letter from social security indicating the employee does not have enough time. Human Resources sends that to the state, and no reduction is taken. Jim indicated the problem is that social security knows nothing about the state plan, and the state knows nothing about social security; so, there is confusion. Ruth noted that a $60 payment for someone such as a civil service employee who takes home a $400 pension is very substantial. This issue should be tracked, and something should be done.

C) Steve indicated Tom Stitt brought to his attention the potential disconnect between an employee's date of retirement and the start date of the person's pension, i.e., the person not being covered for health insurance during that lag time. Peggy responded that would only be the case if the person retired during the middle of a month or the middle of a pay period. Human Resources discourages employees from doing that and will work with them on their termination dates so their coverage continues.

Aslam asked about the Governor's move to transfer $23 million in health care costs from what he assumes is general revenues into what he assumes is the higher education budget. He questioned what effect this will have on health coverage. Jim stated when AFSCME negotiates with the state for health benefits, the state indicated that all state employees in the future should be paying 50% for their health insurance and that this should be part of the contract. AFSCME has fought them off, but the issue keeps coming up. The state will continue to push for employees to pay a bigger share. Aslam asked if Human Resources has heard anything about the reason for this change. Peggy responded nothing has been said at this point.

VI. Subcommittee on Retirement Benefits and Annuities 
Steve reported that Pansy Jones will be replacing Joann Marks on both the committee and subcommittee while Joann is on medical leave. Steve indicated he would try to get the subcommittee moving.

VII. Old Business 
A) Steve reported he talked with A.G. Monoco about the information on annuities and the disorganized state in which it came. Mr. Monaco indicated the information was compiled into a spreadsheet and that he would have someone from Edwardsville e-mail it to Steve. Steve indicated what he received was a zip disk with the same information he received before and no kind of side by side comparison. He has not had a chance to get back with Mr. Monaco to see if that is indeed all there is or if there is something more.

B) Steve reported he has not heard anything back from the chancellor regarding the sick leave pool proposal. Kathy indicated Pam Brandt (Administration) met with Susan Ferry (Chancellor's office) to discuss the proposal, and she will be working on a response.

VIII. New Business 
A) Jim asked if the committee believed it would be worthwhile to have Ron Jensen from the Social Security Administration come to a meeting to discuss Medicare. Steve indicated given the confusion about the issue, it might be useful. He asked Jim to contact Mr. Jensen. Jim suggested someone from Human Resources might be more appropriate since Mr. Jensen has responded well to that office in the past. Kathy indicated she would contact him, although she was unsure how long it would take. Peggy stated there is an office in Marion that does Medicare Part B claims and suggested someone from that office could meet with the committee. Steve suggested trying to get someone for the meeting in April.

B) Jake circulated a copy of the SURS Legislative Platform for 2001, noting there are issues related to what the committee has been discussing. The SURS Members Advisory Committee will be meeting on April 10. If there are any issues anyone would like him to address, they can contact him.

IX. Adjournment 
The next meeting of the committee is scheduled for April 24.