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Retiree insurance recommendations: Video of the open forum presentation

The University of Missouri Board of Curators has voted to approve the TRAC retiree insurance recommendations. What follows is archival information for your reference. You can access up-to-date resources and educational information on the changes to retiree insurance page, or visit the board of curators meeting information webpage to learn more.

 

(24:17 min.)

 
 

Frequently asked questions

How does the $808M liability (minute 05:15 in the video above) relate to the 7% of the $325M (minute 03:12 in the video above)?

The 7% is what we pay to cover the cost for current retirees as a percentage of our total benefits spend ($325M). The $808M liability (shown at minute 05:15 of the video) is what is projected the university would have owed for future benefits, had no changes been made to retiree insurance. To cover this liability, we would have had to set aside resources now to pay for future costs, which is why the UM Board of Curators voted to make changes to retiree insurance, thus reducing this liability over time.

Regarding the benefit rate in the "Components of Benefit Spend" illustration, what is included in the 11% "Other" category? (See minute 05:36 of the video above.)

The “Other” category in the "Components of Benefit Spend" illustration, includes a variety of programs including the Employee Assistance Program, Tuition Assistance, Educational Fee Reduction, Wellness program, Service Awards, state and Civil Service Retirement employer contributions and stabilization reserve (which helps maintain a level pension plan funding).

I'm struggling with the 7% of the total benefit spend from the "Components of Benefit Spend" illustration (see minute 05:36 of the video above) and how it relates to the $33 million of additional funding needed (as shown at minute 05:15).

The 7% is the percentage we are spending now on retiree medical of the total current UM benefit spend. The $33M is additional funding required if we have to start setting aside funds to ensure we can meet our funded liability requirement. 

This means we would have had to set aside an estimated $33M in addition to what we already spend, had the board of curators not voted to change retiree insurance benefits. Regardless of change, the liability must be re-evaluated each year and aligned with market or actuarial value to cover the liabilities. For example, if the market isn't doing well we would have to put more into assets, if the market is doing better than expected, it could be less, or if healthcare costs change more than estimated, our funding expectations could change.

Making changes to retiree insurance now helps the university manage volatilities that are beyond our control.

<<< Return to the Retiree insurance recommendations homepage

Reviewed January 27, 2017.