MEMORANDUM. Executive Summary of Recommendations Health Insurance Contributions for Pensioners

Size: px

Start display at page:

Download "MEMORANDUM. Executive Summary of Recommendations Health Insurance Contributions for Pensioners"

Edgar Lee
8 years ago
Views:

1 CCP-92/57 DG/DA/ Geneva, 21 August 1992 MEMORANDUM FORDEOSION Deadline : To From Subject Director-General Director of Administration Health Insurance cc Directorate Executive Summary of Recommendations Health Insurance Contributions for Pensioners 1. The Organisation should pay direct contributions of 65% (related to 35% now paid by pensioners) to the Health Insurance Scheme for pensioners. The cost will be approximately 1,4 MCHF at 1991 prices for 1993, that will be 1,5 MCHF in 1993 at estimated 1993 prices. < The Pension Fund will be asked to channel the contributions of the Organisation and those of the pensioners to the Health Insurance Scheme, keeping them in a separate account, thus creating the infrastructure for payments of the premiums. 2. The Organisation should propose an amendment to the CERN Convention in case one Member State should withdraw with respect to Health Insurance contributions as capitalized obligations. 3. The Rules of the Pension Fund should be amended so as to place an obligation on the Pension Fund to continue the Health Insurance Scheme for pensioners in the event of the dissolution of the Organisation. The Governing Board will be asked to prepare a proposal for Council to this effect. 1. As agreed in the Directorate in June, I have convened an ad hoe working group comprising H. Atherton, J-F. Barthelemy, H.F. Hoffmann, Vv. Middelkoop, R. Milligan, F. Semmler, (AUSTRIA) and C. Zilverschoon, to discuss the proposals concerning the health insurance of pensioners, particularly relating to the withdrawal of one of the Member States or the dissolution of the Organization and geriatric care. This document should be considered as a complement to the second report of the Health Insurance Working Group chaired by

The cost will be approximately 1,4 MCHF at 1991 prices for 1993, that will be 1,5 MCHF in 1993 at estimated 1993 prices.

2 H. F. Hoffmann, dated 19 December It is proposed that both documents be presented to the Standing Concertation Committee at the earliest opportunity. 2 The conclusions of our discussions are that a step-by-step approach should be adopted, as indicated below. 2. Health insurance contributions for pensioners The Organization should pay direct contributions of 65% of the total premium in relation to the 35% that is currently paid by the pensioners. A brief statement of the overall costs and contributions of the pensioners, the Organization and the active staff for the health care of the pensioners, now and in 10 years time, is shown at Annex A. The contributions of the Organization and the pensioners could be channelled through the Pension Fund; if so, they should be kept in a separate account from the actual pensions. This would create the infrastructure within the Pension Fund for payment of the premiums, but the Fund would only act as a post-box at this stage. 3. Withdrawal of one of the Member States The CERN Convention should be amended to require a withdrawing Member State to contribute its proportion of the capitalised obligations of the Member States at that time, (including the Pension Fund deficit and obligations relating to the the health insurance of pensioners and future pensioners, to be calculated on the basis of a "Caisse fermee"). J.M. Dufour has been asked to take the necessary action in this respect. 4. Dissolution of the Organization The Pension Fund should become entirely responsible for the pensioners' health insurance premiums. The Rules of the Pension Fund need to be amended to add a final paragraph to Article I 3.03, as shown in Annex 7 of the first Report on Health Insurance at CERN, (text attached at Annex B). This will place an obligation on the Pension Fund to continue the health insurance scheme for pensioners if th.!'! Organization is dissolved. Council has already accepted an undertaking that it will bring the Fund into equilibrium at that time, and the capital needed to pay for the health insurance of the pensioners will then enter into a separate calculation of the equilibrium of the health fund. 5. Geriatric care Since this problem is not acute for CERN at present, it was felt that it could be postponed for the time being, pending developments in the Member States. Attachments (2) H. Webc>r

Health insurance contributions for pensioners The Organization should pay direct contributions of 65% of the total premium in relation to the 35% that is currently paid by the pensioners.

3 1- Cash-flow situation of the health insurance contract in 1991 (AUSTRIA Versicherungen AG, } Total health 10 % self- Net health Premiums expenditure participation plus expenditure paid franchise MSFR MSFR MSFR MSFR Staff Pensioners Others Totals t tt established Staff members, Fellows and Students Associates of all kinds, persons eligible to remain in the insurance for short periods,... t 1.46 MSFR has been added to cover administrative costs of AUSTR[A. tt 0.46 MSFR of miscellaneous income has been added to the premiums, coming mostly from rebates on bills at La Tour hospital paid back directly to AUSTRIA. 2- Pensioners' situation The pensioners had a 'net deficit' of = 3.91 MSFR. Pensioners pay 35 % of their calculated total premium as do the active staff. If the Organization were to pay the other 65 %, as it does for staff, then the amount to be paid by CERN for this group in 1991 would have been 1.72 * (65/35) = 3.19 MSFR. 3-- Increased net cost to the Organization The Organisation pays 65 % of the premiums of staff and hence would also have had to pay = 2.07 MSFR less under this heading. Thus the Nt increase in the Organization's payments would have been 4-- Reduction of load on active staff = 1.12 MSFR As the premiums paid for pensioners would have been 3.19 MSFR higher, the total premiums required from the 'active staff' would have been 3.19 MSFR lower. The premium necessary for 1991 would have been instead of 8.48 % (plus 0.5 % at the d1arge of CERN to cover professional risks and illnesses). [There is an iterative process to be carried out in the calculation as the reduction in premiums must l1e fed back into the calculation of balance as tire pensiotters would have paid sliglttly foss. I It should be noted that the total premiums for pensioners would still not cover their total costs and that the MSFR difference would be covered through the staff contributions as is the present deficit. Annex A

28 1.85 3.58 Totals 31.92 3.90 29.48 t 31.05 tt established Staff members, Fellows and Students Associates of all kinds, persons eligible to remain in the insurance for short periods,... t 1.

4 5- The following two tables show an estimate of the evolution of costs and premiums for two cases tt: I II the present scheme; CERN contributes directly 65 % of pensioners' total premiums. a) assuming constant unit health-care costs: [1991l ~ Premiums paid by Premiums CERN for Staff, Extra cost to % of basic Fellows, Students CERN salary t and pensioners 1991 MSFR 1991 MSFR I II I II II - I t 0.5 % to be added to these values as the premium to cover professional risk and illness, at the charge of CERN. includes 0.5 % for professional risk and illnesses b) assuming that unit health-care costs rise 1 % faster than the general cost-of-living (as they have done over the last - 15 years): [1991l ~ Premiums paid by Premiums CERN for Staff, Extra cost to % of basic Fellows, Students CERN salary t and pensioners 1991 MSFR 1991 MSFR I II I II II - I t 0.5 % to be added to these values as the premium to cover professional risk and illness, at the charge of CERN. includes 0.5 % for professional risk and illnesses 6--- The numbers are compatible with those in the 2nd report of the Hoffmann Working Group, taking into account the different hypotheses used, especially for the evolution of the average basic salary and staff numbers. 7- For 1993, the extra cost to CERN is estimated at 1.4 MSFR in 1991 prices. The relatively large increase versus 1991 is partly due to the policies of early departure and staff reduction which accentuate the ratio of retirees to active staff. ti rhe values of average basic salaries and staff nurnbcrs used in the csti111ation have been taken fron1 'Long-Tcr111 Personnel Cost: FI-PU Scenario I'. Nutnbcrs for pensioners have been taken fron1the1991 Annual Report of the Pension Fund, graphs 1and3. Annex/\ page - 2

II - I 8.48 7.5 17.1 18.1 1.0 9.5 7.7 17.4 19.8 2.4 t 0.5 % to be added to these values as the premium to cover professional risk and illness, at the charge of CERN. includes 0.

5 ANNEX B (Annex 7) Projet de modification des Statuts de la Caisse de Pensions afin de garantir l'assurance-maladie des Beneficiaires Nouvel article I 3.03 (Projet) Garantie des Prestations Le CERN et l'eso garantissent Jes prestations acquises en vertu des presents Statuts par les membres de leur personnel respectif, jusqu'a!'extinction des droits du dcrnier benniciairc. En cas de fusion, de reconstitution ou d'autrcs transformations de l'unc ou l'autrc de ces Organisations,!cur Conscil rcspectif prend lcs mcsurcs necessaircs a la continuite des pensions. En cas de dissolution du CERN, le Conscil, sans prejudice d'autres solutions offrant des garantics equivalentes, crecra unc fondation de droit Suisse qui succedcra a la Caisse afin de garantir lcs droits acquis au jour de la dissolution et donnera effct a toutcs mcsurcs d'integration dans les regimes nationaux de securite socialc des Etats Mcmbrcs garantissant!'equivalence precitee. En cas de dissolution de l'eso, son Conscil prendra Jes mesures necesaires pour garantir lcs droits acquis des membres de son personnel, membres de la Caisse. Le Conseil de!'organisation concernee par l'un des evencments precites prendra!cs mesures necessaires pour que lcs bendiciaircs puisscnt restcr dans le regime d'assurance-rnaladie existant au moment de la survcnancc dudit CVCncmcnt, OU, a d(>faut, etrc affi]ics a un regime offrant des conditions de protection et de cotisations comp,uablcs.

'extinction des droits du dcrnier benniciairc. En cas de fusion, de reconstitution ou d'autrcs transformations de l'unc ou l'autrc de ces Organisations,!

NUNAVUT HOUSING CORPORATION - BOARD MEMBER RECRUITMENT

NUNAVUT HOUSING CORPORATION - BOARD MEMBER RECRUITMENT The is seeking Northern Residents interested in being on our Board of Directors We are seeking individuals with vision, passion, and leadership skills