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Missouri S&T Faculty Senate November 19, 2009 UMSYSTEM.EDU 1 November 19, 2009 UM Board of Curators UMSYSTEM.EDU 2 November 19, 2009 Employee Contribution to Retirement Plan • 1% of first $50,000 in salary • 2% of salary in excess of $50,000 • Projected Contributions - $12,000,000 per year UMSYSTEM.EDU 3 November 19, 2009 How Does the Money Flow? UM Retirement Benefits Trust Budget Fund Employee Contributions When UM share is Greater than budget Budget Stabilization Fund UMSYSTEM.EDU 4 November 19, 2009 Comparator Institution Benchmarks Hewitt Associates Relative Value Study Employer Paid Value Total Value Index Rank Index Rank Retirement 117.9 3rd 77.6 15th Retirement* 101.1 7th 77.6 15th Pre Retirement Death-Group Life 107.7 7th 91.2 10th Long Term Disability 143.9 4th 107.9 8th Dental 85.3 12th 93.0 12th Preretirement Health 98.9 10th 102.8 8th Post Retirement Health-prior to age 65 161.9 3rd 127.5 2nd Post Retirement Health-age 65 and higher 88.4 8th 103.1 9th All Post Retirement Health 116.3 8th 110.7 6th All Benefits (Including Tuition) 106.3 6th 92.3 13th All Benefits (Including Tuition)* 98.5 11th 92.3 13th *After 7/1/09 pension plan amendment UMSYSTEM.EDU 5 November 19, 2009 Benefit Plans Contribution Analysis Based on 2009 Contribution Rates UMSYSTEM.EDU 6 November 19, 2009 UM Retirement, Disability & Death Benefit Plan Financial Status UMSYSTEM.EDU 7 November 19, 2009 • Actuarial Value of Liabilities: The total actuarial accrued liability of pension benefits for all plan members including active employees, retired employees and terminated, vested employees. • Actuarial Value of Assets: Value of all assets held in trust using the Expected Return Asset Valuation Method. Using this approach allows for an amortization of unrecognized return over a 5 year period. The result is a “smoothing” of changes in market value over a 5 year period. • Market Value of Assets: Market value of all assets held in trust under the plan. UMSYSTEM.EDU 8 November 19, 2009 UM Retirement, Disability & Death Benefit Plan Billion UMSYSTEM.EDU 9 November 19, 2009 History of Actual UM Contribution Rates % of payroll UMSYSTEM.EDU 10 November 19, 2009 UM Medical Benefit Plan • • • • Great West Healthcare (CIGNA) 1/1/10 Plan Design 1/1/10 Premiums Prescription Drug Benefits UMSYSTEM.EDU 11 November 19, 2009 Premium Changes 2007 2008 2009 2010 0% 0% 3% 5% 0% 0% 5% 5% Pre 9/1/90 Retirees -4.1% to -5.6% -7.0% to -7.7% 0% 3.8% to 5.1% Post 9/1/90 Retirees -4.4% to 1.4% -4.2% to -6.4% 3-4% 1.5% to 2.6% UM Choice Health Care Program UM Catastrophic Medical Program Retiree Indemnity Medical UMSYSTEM.EDU 12 November 19, 2009 Prescription Drug Benefits • Express Scripts – St. Louis Business Health Coalition • Home Delivery UMSYSTEM.EDU 13 November 19, 2009 Allocation of Drug Spending UMSYSTEM.EDU 14 November 19, 2009 Costs & Trends Key Brand Drugs Losing Patent Protection 2009 2011 Annual Sales $10.8 Billion $8.1 Billion $16.6 Billion • Adderall XR • Aricept • Actos • Ambien CR • Arimidex • Levaquin • Casodex • Cozaar • Lipitor • Cellcept • Effexor XR • Protonix • Depakote ER • Flomax • Zyprexa • Prevacid • Hyzaar • Topamax • Patanol • Valtrex • Sanctura ©2008 Express Scripts, Inc. All rights reserved. 2010 2012 $20 Billion • Avandia • • Avapro • • Detrol LA • • Diovan HCT • • Geodon • • Lexapro • • Plavix • • Provigil • • Seroquel • • Singulair • Viagra 2013 $8 Billion AcipHex Avodart Cymbalta Namenda Niaspan OxyContin Propecia Sustiva Xopenex More than $63.5 billion within the next five years Legislation Overview – State Level • Consolidated Health Care Program • Pharmacy Benefit Management • Autism UMSYSTEM.EDU 16 November 19, 2009 Legislation Overview – Federal Level • Mental Health Parity Bill • American Recovery & Reinvestment Act • COBRA Premium Assistance Subsidy • HIPAA Privacy and Security Rules • Children’s Health Insurance Program Reauthorization Act of 2009 • Michelle’s Law (HR 2851) • Genetic Information Nondiscrimination Act (GINA) • Medicare Secondary Payer Reporting Requirement • Newborn’s and Mother’s Health Protection Act • IRS Cafeteria Plan Guidance UMSYSTEM.EDU 17 November 19, 2009 National Health Care Reform UMSYSTEM.EDU 18 November 19, 2009