AGENDA ITEM IX

Fringe Benefits Committee - B. Keith Hoore - Long Term Disability Proposal VICE PRESIDENT BEPKO: Next, we have another action item. A report on Long Term Disability by Keith Moore from the Fringe Benefits Committee.

PROF. MOORE: Before I report on the Long Term Disability proposal I would

like to make a brief announcement about another long standing issue that has

just been clarified.

"University schools or departments that offer non-credit, continuing education courses, programs, seminars, workshops, and conferences may elect at the expense of the program to offer discounts to employees of Indiana University who are appointed as 100% FTE and to retirees of the University who have retired under the University retirement provisions."

This memorandum essentially restores the situation to what existed six years ago and was discontinued because of a ruling that it had not been approved on a system wide basis.

I think we owe thanks to the administration for pursuing this and finding a remedy that offers flexibility to the various schools and departments and offers to the faculty and staff a rather attractive benefit. We also owe a vote of thanks to Continuing Studies who have pursued this issue with the Fringe Benefits Committee for the last six years to a successful conclusion.

My second item this afternoon relates to the proposal for an insurance-based, long-term disability plan that was included with today's agenda as Circular 86-22. This proposal was developed in response to a request by the University Office of Insurance which in turn was pursuing a mandate from the University Faculty Council that dates back to 1984.

This might be an appropriate time to introduce to you Mr. Jack Hudson who is the Director of Insurance and Retirement Programs. Jack tells me that this is the first occasion he has had to be present with our Faculty Council. Jack is here today to answer any of the technical questions that might arise relating to this proposal. Jack's office, and Jack to be specific, has done the work in developing this.

The specific proposal in Circular 86-22 was developed by TIAA. I would like to make it clear that our interest is not in whether TIAA should be the carrier for such coverage, but rather in whether we feel this plan, as presented, is desirable for IUPUI and the IU system. As I noted in my memo to Secretary Zunt, this proposal has already been endorsed by the All University Fringe Benefits Committee and the University Faculty Council.

It is the feeling of our committee that insurance-based, long-term disability protection is a vital missing link in what is otherwise a strong and attractive package of benefits at Indiana University. I also believe that it is important for this campus to be heard and to demonstrate to the administration that our campus is solidly in favor of action on this issue as soon as possible.

The IUPUI Fringe Benefits Committee, therefore, recommends that the IUPUI Faculty Council endorse the Long-Term Disability Benefits Insurance Proposal as presented in Circular 86-22 with the understanding that it will replace the existing pIau for all employees who participate in the TIAA-CREF retirement program and who are not currently receiving disability benefits under the existing plan. In addition, the cost of the Long-Term Disability coverage is to be part of the fringe benefits compensation and the program is

non-contributory for the participants.

I therefore move tha t the IUPUI Facul ty Council endorse the long-term disability plan as presented in Circular 86-22 and urge its implementation as rapidly as possible.

PROF. BYRNE: On page 8, it reads like a narrative. Perhaps you can clarify it. Under the Heading No Medical Examination, there are alternative possi- bilities and under Contributions it is assumed that the University will pay.

Is the latter the one to take seriously or are the alternatives still under consideration, or what?

PROF. MOORE: I tried to make it clear that it is the intention of this committee and of the all University committee that, if the plan was adopted, it be a non-contributory plan. The University is paying the cost of the long-term disability. Is that the question?

PROF. WELLMAN:: I wonder if Mr. Hudson \-'Ouldcontrast this with what we presently do or don't have.

HR. HunSON: I tried to do that on the next to last page where it says LTD PLAN COMPARISON. It covers state employees, mainly those on TIAA-CREF. The current plan only covers people who have been here five years with tenure or seven years without tenure. All current employees with one year or more of service would be covered the day the plan goes into effect. New employees would be covered after one year of service. That is a big improvement.

The record shows the various replacement percentages provided by the current plan. The replacement amount varies based upon whether you qualify for Social Security, or have any dependents who qualify for Social Security, or whether one would choose to begin their TIAA/CREF annuities at the time of disability.

The problem with the current plan is, you must start drawing your TIAA/CREF annuities for the rest of your life \vhen you become disabled. If you fine you are able to return to work, those annuities cannot be stopped.

The equity would remain intact and the insurance plan would continue to make contributions to TIAA/CREF until age 65. Disability income from the proposed plan would stop at age 65 at which time one would begin the TIAA/CREF regular full retirement.

VICE PRESIDENT BEPKO: Are there any other questions? If not, are you ready to vote? All in favor of endorsing this proposal, say "Aye." Opposed. Thank you Keith.

PROF. WELLMAN: Will the records show that this was passed with the assumption

that this is going to be non-contributory?

VICE PRESIDENT BEPKO: That was the assumption on which the vote was taken.

Yes. It should be reflected in the minutes of the meeting.