Benefits Presentation to Board of Governors February 2, 2010 1
Agenda 1. Guiding Principles 2. Benefit Program 3. Plan Design 4. Financial Data 5. Benefit Comparatives 2
Guiding Principles 1. One pension and benefits plan for all members of the UW community without reference to the type of work performed or the employee group to which one belongs. 2. The current level of benefits should be maintained. 3. Employees should be covered for catastrophic events. 4. Benefits should not be designated for the employee alone, but should provide family coverage where relevant. 5. Cost implications to both the University and its employees should be considered. 3
Benefit Program Extended Health Care (Preretirement and Postretirement) Dental Life Insurance (Preretirement and Postretirement) Long-Term Disability Sick Leave Benefits Tuition Benefits 4
Cost Sharing Extended Health Care: employer-paid cost sharing through coinsurance and limits Dental: employer paid cost sharing through coinsurance and limits Life Insurance: employer / employee cost shared Sick Leave: employer paid Long-Term Disability: employee paid Tuition : employer paid 5
Financing Arrangements Extended Health and Dental University pays claims plus administrative costs Large claim pooling Life Insurance Risk sharing arrangement with 12 other Ontario universities through University Life Insurance Plan (ULIP) Premium changes limited to +/- 10% in any given year 6
Financing Arrangements (continued) Sick Leave Self insured Administered by Human Resources Medical advice is provided by UW Health Services Workplace injury administered by UW Safety Office Long-Term Disability (LTD) Fully insured 7
Extended Heath Care and Dental 80% reimbursement of most claims Preferred Provider Network for Pharmacies- dispensing fee capped Out-of-Canada emergency medical coverage with $1 million lifetime limit Annual indexation of annual and lifetime limits* Dental plan reimbursement based on two-year lag of dental fee guide Vision care not covered *P&B Committee made decision in the last two years not to index limits in light of pressures on UW operating budget 8
Tuition Benefits Staff and Faculty and their dependent children: tuition fees for UW degree credit courses 9
Retiree Benefits Eligibility Retirement after age 55 with at least 10 years of service Elect immediate pension under UW Pension Plan Benefits Extended Health Care Similar to active plan with difference in limits Continues for lifetime of retiree's surviving spouse UW pays 100% of cost 10
Retiree Benefits (continued) Benefits (continued) Dental coverage not provided Life insurance Currently $4,500; indexed each year UW pays 100% of cost Tuition benefit Liability Coverage for dependent children continues Balance sheet liability of approximately $100 million 11
Financial Data 2008-2009 Millions $10 $8 $6 $4 $2 $0 Extended Health Care Dental Plan Life Insurance LTD* 2008 $6,646,236 $2,571,698 $2,052,375 $1,923,183 2009 $7,588,277 $3,014,944 $2,355,043 $1,970,880 * Employee paid 12
Financial Data 2008-2009 UW Extended Health Care Costs Millions $10 $8 $6 $4 $2 $0 Active Pensioners Total 2008 $4,969,633 $1,676,603 $6,646,236 2009 $5,621,278 $1,966,999 $7,588,277 13
Comparator Universities Most recent comparative analysis performed in 2005 using the following universities as comparators: Alberta British Columbia Guelph Laval McGill McMaster Montreal Ottawa Toronto Western Ontario Wilfrid Laurier Windsor 14
Preretirement Group Benefits Group Life Insurance 100 Average Short-Term Disability Long-Term Disability 98.5 Medical Dental Vision/Hearing 101.0 Spending Accounts 50 Total Value Employer-Paid Value 150 Ranking Among Plans in Study Employer-Paid Index Total Index First 113.3 123.1 Fourth 107.1 103.2 Eighth 99.2 94.6 Twelfth 79.8 87.9 Your Position Relative to the Base Universities Employer-Paid Value Total Value Index 101.0 98.5 15 Ranking 7th/8th 4th/5th
All Health Care Benefits 100 Average Preretirement Health Care Postretirement Health Care 96.2 50 Total Value Employer-Paid Value 121.0 150 Ranking Among Plans in Study Employer-Paid Index Total Index First 141.8 115.6 Fourth 112.1 112.5 Eighth 104.1 94.8 Twelfth 44.6 84.7 Your Position Relative to the Base Universities Employer-Paid Value Total Value Index 121.0 96.2 Ranking 3rd/4th 6th/7th 16
Trends Drugs coming off patents leads to savings through generics more biologics coming on the market (effective but expensive) Focus on postretirement benefits Cost management Flexibility 17