Meeting Minutes for November 27, 2001

Present:Jake Baggott (ex officio), Kathy Blackwell (ex officio), Tom Godell (A/P Staff Council), Linda Grace (Faculty Senate), Carolin Harvey (Civil Service Council), Patricia Hopkins-Price (Faculty Senate), Jim Hunsaker (ex officio), Aslam Kassimali (Faculty Association), Steve Kraft (Graduate Council), Andy Morgan (A/P Staff Council), Roland Person (Faculty Association), James Swisher (Emeritus Association).

Absent: Art Aikman, (ex officio), Vicki Benson (ex officio), Brian Chapman (Chancellor's Representative), Kevin Dorsey (Dean's Council), Ruth Pommier (Civil Service Council), James Staub (ex officio).

I. Announcements - None.

II. Approval of Minutes of October 23, 2001 
The minutes were approved as presented.

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

IV. Guest 
Steve reported that in his talks with Chancellor Wendler, he related some of the committee's concerns on various issues, including representation at the table on the negotiation of benefits; football tickets for retirees; and the sick leave pool. He also mentioned taking a look at the health care system and the state shortfall in funding, specifically looking at health care provisions for University employees.

Chancellor Wendler expressed appreciation for the opportunity to meet with the committee. He has already taken steps to deal with some of the issues: 1) he has discussed providing football tickets for retirees with Athletic Director Paul Kowalczyk. Chancellor Wendler communicated his belief that any way to increase attendance at games would be worthwhile and that it is a nice benefit to offer. Mr. Kowalczyk is working on some ideas and will get back to him; 2) he has some familiarity with sick leave pools, although his experience has been that employees who leave the university can donate their unused sick leave to the pool. Then, it can be accessed as needed. He believes, but is not sure, that the overriding logic was that it was paid out as an unused benefit and so there was no additional associated cost. He is unsure how a sick pool would work here, but did not think it an unreasonable thing to consider. He noted that one of the things he faces, particularly in the faculty ranks, is the need to attract the highest quality people to work at SIU. Benefits packages need to be attractive to help with the recruitment of faculty and staff at all levels; 3) he is aware there are concerns about the relationship that state university employees in Illinois have to the larger pool of state employees and SIU's lack of representation in benefits discussions that affect all state employees. He indicated he will be attending an IBHE meeting in Chicago next week with the campus and system CEOs around the state. That group gets together to discuss matters of mutual concern. He will raise this question with the other university presidents, chancellors, etc., to see if it is a concern.

Jim S. stated it is common knowledge that inflation and health care costs are going up 15-16% each year. That has caused problems all over. CMS in Springfield told the legislature that the state health insurance program may go up to $100 million dollars in the red this year, and they do not know what to do about this deficit. Some legislators are raising questions about whether state universities should pay part of that $100 million because a lot of their employees are not in HMOs, and to a large extent they are responsible for this deficit. There are no laws or contracts to protect universities; it has just been tradition that a contract was awarded to AFCSME, and other state employees received the same benefits. Now there is talk of a split, and that makes [universities] very vulnerable to restructuring and loss of benefits. The lobbying groups that represent university employees and retirees are looking into this issue. [The state is attempting to find $500 million, but there are only a limited number of places they can look, and it appears they are going after [universities]]. Chancellor Wendler indicated he would test the waters on the concern of the other CEOs, though his guess is these concerns are shared. Jim S. indicated SIU has traditionally not been too involved in benefits issues that are off budget. However, things are changing and that needs to be reconsidered. He indicated Garrett Deakin (Executive Assistant for Government Relations) was approached when there was a threat several months ago, and he did not want to get involved. Chancellor Wendler suggested this was new territory, and Mr. Deakin likely was unsure how it should be handled.

Jake indicated he is curious about what others at the IBHE meeting will say relative to the 30 and out provision whether they are taking the position to extend it or continue it in some form. Chancellor Wendler stated he would raise this and the other issues at his meeting and get a response back to Steve. He noted another group he has access to is the Southern Illinois Collegiate Common Market (SICCM), which includes both Carbondale, Edwardsville, and the community colleges in southern Illinois. He guessed these issues would be important to them also. He indicated he would bring them up at their next meeting.

Jim S. stated another topic raised periodically is the committee's concern about staffing in Human Resources (HR). The University has been under pressure to cut costs and reduce employment; however, the committee believes the functions of HR are very important, and its staffing should be protected, at least to the point that basic things are well covered. Steve explained to Chancellor Wendler that there was a series of correspondence last year to that effect between the committee and Interim Chancellor Jackson and others pertaining to resources available in HR, particularly in the area or retirement counseling. Kathy indicated HR at one time had a staff member, Larry Johnson, whose sole responsibility was retirement counseling. When he retired, he was not replaced in that capacity and the work was distributed among the other counselors. However, this occurred around the same time as a philosophical change from SURS. SURS began taking a more active role in the retirement counseling process and took some of that out of the hands of the campuses. The problem with SURS counselors is sometimes getting them on campus and having enough available appointments for all the employees that want to meet with them. As a result, it is an ongoing question as to who provides that service and how that is best accomplished.

Chancellor Wendler stated he was asked by a person from the Faculty Senate about the possibility of sending out a newsletter that would update people on changes in retirement benefits. He referred the person to Jim H. Jim H. indicated any changes related to retirement benefits are communicated in theCampus Concerns. Also, he will be absorbing much of the counseling done by Larry Johnson and will offer the same service to employees. He does not believe employees are suffering for a lack of counseling at retirement time. It is just done more on an individual basis than in group sessions at this point.

Jim S. asked if there has been any word from the Governor on how much money he is taking back. Chancellor Wendler responded the Governor did not ask specifically, but what the number turns out to be is a little less than $1 million to put in reserve for the campus. On top of that, the University has an internally-generated tuition shortfall challenge. All told, it amounts to 2% of the budget. It so happens the campus policy has been to hold 2% of the budget in reserve, but this has been done with the expectation that it would be spent out towards the end of the year on equipment, etc. The administration has never had to exercise the option of [returning that money]. Now it may have to exercise that option. The exact numbers are not yet clear, but it is something like $2 million. With the University's budget, that is a relatively small percentage, but it will go back to the split on other than salaries (OTS).

Steve asked Chancellor Wendler whether there was any way the committee could proceed with working with him on the sick leave pool or if he needed more time to examine the proposal coming forward. Chancellor Wendler responded he would like a little more time, noting he is aware there are some differences of opinion about the quality of the University's benefits in terms of sick leave and whether a pool is really needed. He also needs to understand what his role and responsibility is as it relates to proposing matters. He questioned whether proposals that affect benefits come through the committee. Steve responded that most proposals have, but he was unsure this was the only avenue. Chancellor Wendler indicated he would try to get some better understanding and get back. The President typically handles the interface with Springfield on state issues. One of his first courses of action would be to talk with President Walker and discuss strategy on these issues.

Trish expressed concern about people with varying salaries donating to the sick leave pool and asked who would make up the difference in cost. Chancellor Wendler responded that he was unsure how it would work. Jim S. stated the committee had decided the details would have to be worked out by specialists. The committee is just getting the ball rolling. Trish indicated there has been concern about adequate staffing in HR. If the sick pool is brought into effect, it will require extra man hours of oversight, and consideration would have to be given as to whether to allocate resources to implement and maintain the sick pool. Chancellor Wendler indicated he knows very little about the administration of a sick leave pool and what it would require. If tagging hours, salaries, and contribution rates was required, then probably more staff would be needed. These are some of the questions that would need to be answered. He indicated he would report back to Steve after the meeting in Chicago, where he hopes to find out where things stand on their level. Jim S. also asked Chancellor Wendler to feel free to contact the committee if issues come to him from other sources and he would like committee's opinion.

V. Updates from Human Resources 
Jim H. reported he attended a meeting at Eastern with benefits managers around the state of Illinois. It was reported that 457 plans and 403b limits are increasing for 2002. The general limits are going up to $11,000 in both plans, and both the 457 (deferred comp plan) and the 403b (tax deferred annuities) are mutually exclusive of each other in 2002. As a result, employees can maximize contributions to both plans. The increases in contribution limits are on a four-year plan; from 2002 to 2006, they are going to increase to $15,000. Further information will be included in the next Campus Concerns. Kathy reported that in addition to the changes in the 403b and 457s, there is a provision to bring back the tax exempt status of graduate-level coursework. If approved, any coursework that begins on or after January 1, 2002, will not be taxable. The law will sunset in 2002 unless it is approved.

VI. Subcommittee on Health Benefits 
Jim S. reported that he and Ruth hope to meet with David Marx to work on a rebuttal to Pam Brandt's comments on the sick leave proposal.

VII. Subcommittee on Retirement Benefits and Annuities 
Andy reported the committee reviewed the information returned by 7 of the 12 tax-sheltered annuity companies. The information as submitted was very confusing, and the committee believes that distributing information in this context will only further confuse people. He did some research on his own and found that the Securities and Exchange Commission (SEC) has a good brochure available online that explains variable annuities (www.sec.gov). It was suggested Human Resources put this link on its website, as well as include it in the next issue of Campus Concerns as an easy way to educate people about annuities. Additionally, if people have complaints about their annuities or their company, they should contact HR or the Securities and Exchange Commission. Steve indicated one of the things the committee wanted to get a handle on was the relative costs of one annuity versus another. He asked if there was anything that could be pulled in terms of common cost figures. Andy stated there are so many costs because each variable annuity has mutual funds and those mutual funds have a cost; each annuity has an administrative cost, depending on the kind of fund. It is very confusing. Steve asked if something could be put in the Campus Concerns about factors people should be concerned about when evaluating tax sheltered annuities, such as the cost structure. Jim H. stated the article Andy found really goes into the various points to consider (the administrative costs, the rate of returns of guaranteed funds as opposed to the variable funds). He believed something general could be included in the Campus Concerns that these are things to consider when looking at annuities. Aslam suggested the article could also mention a complaint resolution process so that if an employee has a problem s/he cannot resolve with the broker or agent, s/he can contact HR. In this way, the weight of the University can be thrown behind the person so s/he does not get the runaround. Jim H. indicated he discussed the complaint process with Kathy, and it is doable; however, it is unclear whether HR can just do this or if it has to go through someone else first. Kathy indicated people just need to be told that if they have any problems they can contact HR and that office will intervene.

Jim S. believes someone should put a bug in the ear of a couple of other companies who might be interested in getting involved in the [tax-sheltered annuities] program. Presumably, an interested company that came in with a proposal and met the requirements would be allowed to participate.

VIII. Old Business - None.

IX. New Business - None.

X. Adjournment 
The next meeting of the committee is scheduled for January 29.