Acting on a recommendation from an ad hoc committee of the University Senate, the administration will restore retirement benefits for 112 Emory retirees to their pre-2003 levels, effective March 1.
On Jan. 1, 2003, the University adjusted its benefits package for employees, and one change reduced Emory contributions to retiree health benefits from 70 percent of premiums to 50 percent, with a 4 percent annual cap on subsidy growth.
Led by Sid Stein, chair of the Senate's standing fringe-benefits committee, who worked in close cooperation with Executive Vice President for Finance and Administration Mike Mandl and Vice President for Human Resources Alice Miller, the ad hoc group studied the costs of restoring the 70 percent subsidy to retirees under age 65 (and thus not yet eligible for Medicare) who retired before the changes took effect. This group, the committee reasoned, was inappropriately affected by the change since they made retirement plans under a certain set of financial assumptions, which were later changed with little or no warning to them.
There are 112 such individuals, and the first-year cost of restoring the 70 percent subsidy is approximately $180,000, Mandl said. This cost will drop every year as one by one the cohort reaches 65 and becomes eligible for Medicare. Within three years, nearly half the group will be 65, and all 112 retirees will be eligible for Medicare by 2014.
"When I saw all the data, including the costs, it was pretty clear to me that there was an obvious answer," Mandl said. "It really was a no-brainer. It's a reasonable investment for the University, and also it's just the right thing to do."
Mandl said he presented the committee's findings along with his strong endorsement first to the President's Cabinet and then to the Board of Trustees' Finance Committee. Both groups unanimously supported the change, he said.
Last semester Mandl said addressing this benefits question was a project that could be tackled immediately, and now that it has been resolved, a new Senate committee will spend 2004-05 examining Emory's benefits package as a whole, specifically as it compares to those offered by peer institutions.
The University's fringe benefit rate compares favorably with its peers, Mandl said, so the task will be to ensure that Emory is getting the most benefits for its money. He cautioned against unrealistic expectations, but he did say that if "some additional investments at the margins would bring us a tremendous benefit, then that's something we could consider."
"We have fiscal constraints, and we must live within those constraints," Mandl said. "Any changes that we make might require tradeoffs."