Regular session – October 13, 2008 – 3:30 p.m. – Jacobson Faculty Hall 102
office: Jacobson Faculty Hall 206 phone: 325-6789
e-mail: firstname.lastname@example.org web site: http://www.ou.edu/admin/facsen/
The Faculty Senate was called to order by Professor Cecelia Brown, Chair.
PRESENT: Ahmed, Apanasov, Asojo, Atiquzzaman, Basic, Bass, D. Bemben, M. Bemben, Blank, Bradshaw, Brown, Buckley, Clark, Conlon, Croft, Eodice, Forman, Graham, Grasse, Hawthorne, Horn, Kent, Kershen, Knapp, Lifschitz, Livesey, McDonald, Miller, Morrissey, Moses, Muraleetharan, Rogers, Russell, Sadler, Schmidt, Strauss, Tan, Vehik, Verma, Vitt, Weaver, Wyckoff
Provost's office representative: Mergler
ISA representatives: Bondy, Cook
ABSENT: Brule, Franklin, Greene, Milton, Rambo, Reeder, Riggs, Striz, Trafalis
TABLE OF CONTENTS
2008-09 Campus Departmental Review Panel
Bedlam blood drive
Senate Chair's Report:
Search, Natural History Museum director
Expanded grading scale
Bicycle plan (draft)
Issues for 2008-09
The Faculty Senate Journal for the regular session of September 8, 2008 was approved.
The following faculty will serve on the 2008-09 Campus Departmental Review Panel: Dan O'Hair (Communication), Julie Miller-Cribbs (Social Work), Jim Martin (Educational Psychology), Bill McManus (Construction Science), Tim Davidson (Human Relations), and Mike Richman (Meteorology). The panel also will include associate deans Kelly Damphousse (Arts & Sciences) and Debra Engel (Library) and Graduate Council representative Peter Barker (History of Science). The units to be reviewed are Aerospace & Mechanical Engineering, Civil Engineering & Environmental Science, Chemical Engineering, Computer Science, Electrical & Computer Engineering, Industrial Engineering, Petroleum & Geological Engineering, Bioengineering, and Library & Information Studies.
Prof. Pramode Verma (Electrical & Computer Engineering-Tulsa) was elected to the Faculty Senate to complete the 2006-09 term of Sridhar Radhakrishnan (Computer Science), representing the College of Engineering. Prof. Ramadan Ahmed (Petroleum & Geological Engineering) was elected to the Faculty Senate to complete the 2007-10 term of Jeff Callard (Petroleum & Geological Engineering), representing the College of Earth & Energy.
The OU/OSU Bedlam blood drive
will take place on Friday, November 21, and Monday, November 24. The
Mr. Julius Hilburn, Human
Resources director, gave an update on benefits issues. A process was started in December 2007 to examine
the medical and dental options. After a
competitive bid process, Blue Cross and Blue Shield of Oklahoma (BCBSOK) was selected
to provide the primary medical option for all three campuses. In
Mr. Hilburn reported that the long-term disability premium will be reduced about 20 percent and the enrollment will be open, that is, employees can enroll without evidence of insurability unless an individual had applied before and was turned down. Another vision option has been offered with more benefits but at a higher cost. Our employee assistance program, which provides counseling or referrals for a variety of issues, is expanding. The annual benefits enrollment is November 4-16. The Human Resources web site details the changes and the enrollment process. Employee meetings will be held on October 14 and October 27 at 10:00 a.m. and 1:00 p.m. so that employees can ask questions and interact with the new vendors. The benefits guide will be sent to everyone this week. New insurance cards will be distributed before the end of the year. The effective date for the new benefits is January 1, 2009. BCBSOK will work with employees who have issues with transition of care, such as those who are in the middle of chemotherapy or a pregnancy. Current benefits will expire December 31. Since enrollment can be done online, the deadline for enrolling, November 16, is on a Sunday.
As Mr. Hilburn mentioned earlier, the premiums for retiree medical insurance have gone up significantly, as they have for the last several years. That is one of the reasons we are taking a close and thorough look at the retiree medical program. A committee has been focusing on the medical benefits provided for retirees and is close to issuing a preliminary report of findings. The report is expected to generate a healthy campus discussion. A lot of factors are causing this to be a very significant issue. The cost of health care is growing rapidly and even more so for older people. At OU we have a significant number of employees who are becoming eligible for retiree medical. In 2009, public agencies will have to disclose their retirement benefit obligation. That number is around $600 million for OU. As an organization, we have to make sure we can sustain a retiree medical program that is valuable for employees but affordable for the university. In 2008 we will spend about $6 million for retiree medical costs. It could turn into $28 million in 10 years. OU’s plan tends to be more generous than what others offer. This year 9 percent of our employees meet the age and service requirements to retire. By 2018, 39 percent of our employees will be eligible to retire. The committee is made up of 16 faculty and staff from all three campuses, so there are lots of perspectives. Some guiding principles were agreed to by the committee: 1) No recommendation should motivate people to retire earlier than planned. The benefit will be based on when the individual meets eligibility requirements. 2) Length of OU service should more directly influence the value of the retiree medical benefit, i.e., some combination of age and service should make a difference in what the university contributes toward the cost. 3) Changes should be phased in gradually to avoid drastic differences. People who are closest to retiring have the least amount of time to adapt to change, so the biggest changes should be out in the future. The committee will issue a preliminary report that will go to all university employees. Employees will be given a way to submit comments, and meetings will be held to give people a chance to ask questions. Ultimately a report will go to President Boren, who will decide which recommendations will be submitted to the regents.
Mr. Hilburn’s final update concerned the management of OU’s defined contribution plans. The IRS has issued some new regulations that will require the public sector to tighten up the administration of retirement plans, 403(b) plans in particular, as of January 2009. The university will need to know what is in the plans and what they charge participants and will need to take over responsibility for the management of those plans. President Boren appointed a committee of people with financial expertise to monitor the performance as well as the administration of the defined contribution plans. The Chair is Chris Kuwitzky, chief financial officer for the Norman campus; other members include Terry Henson, CFO for the HSC campus, Business dean Ken Evans, OU Foundation director Guy Patton, and Mr. Hilburn. The committee is looking at the options available to our employees and how we can provide plans with good value. A consultant will help with the process of looking at the existing plan structure and making sure we are in compliance with the new regulations. We have issued an RFP for an investment manager to serve as a record keeper for the University. Under our current arrangement, for each individual fund, the relationship is with the participant, not the University. Having a single record keeper has a lot of potential benefits for our employees, for example, a consolidated statement, options with the lowest fees, and a provision for hardship withdrawals and loans. The way our plans have been offered is common in higher education, but other universities are starting to take a more proactive role. Universities are trying to consolidate programs so they make more sense and are managed more effectively and so they can educate participants about the choices. The committee will communicate to the campus as it gets further into the review. No change is expected until July 2009 at the earliest.
Provost Mergler asked how much the record keeper would cost the institution. Mr. Hilburn said the RFP had asked for the fees to be broken out so the costs were transparent. In most plans the fees are built in. Currently, we have hundreds of investment options. The goal is to try to come up with a menu of options and provide information about what it actually costs the participant. Provost Mergler asked whether the projected number of people who could retire considered new hires. Mr. Hilburn replied that the projection was for the current employee group that would meet OU’s retirement eligibility. It builds in some assumptions about people leaving before they become eligible. Before 2008, employees could qualify for OU retirement with as little as 10 years of service and age 62.
Prof. Muraleetharan asked whether the number of options for defined contribution plans was expected to go down. Mr. Hilburn responded that one possibility would be different tiers of options based on the ability and willingness of participants to get actively involved. One group of investments could be managed by a company that focuses on projected retirement date. Another tier might be based on style and risk categories. For the sophisticated investors, there probably would be a third tier that would have lots of other options. A significant number of our employees are confused about all of the different choices and do not do anything. About 30 percent are defaulted into a money market fund. The University is sensitive to the fact that one company is not likely to able to do everything. The objective is to provide a lot of choices as well as information about returns, fees, and performance.
Prof. Livesey asked if the University could negotiate with vendors to reduce the fee they are charging and use some of the savings to support the record keeper. Mr. Hilburn said that is part of the evaluation and negotiation. The ability to do business with us should generate some revenue to help offset the cost of the plan. Our business is important to these companies. The value of our defined contribution plan assets was over a billion dollars a couple of months ago. We will try to leverage that to get the lowest fees for our participants as well as for the University.
Prof. Vitt commented that using length of OU service for retiree benefits might constrain our ability to attract senior scholars and could almost be viewed as age discrimination in hiring. Mr. Hilburn said the benefits would not focus entirely on age; it likely would be a combination of age and service. The committee recognizes that we still have to attract and retain faculty and staff. A competing issue is that some individuals, especially staff, meet the 25-year service requirement while they are still in their forties; the University pays 100 percent of their retiree medical from that point on. People who retire closer to age 65 are less expensive for the University to insure because they are eligible for Medicare. The committee is considering a matrix that looks at length of service and the age a person leaves the University. There is no perfect answer.
Prof. Miller asked how the $1500 benefit for smoking cessation would work. Mr. Hilburn said $500 a year will be provided for a whole series of smoking cessation aids, including hypnosis and acupuncture, recognizing that it may take multiple attempts to quit. BCBSOK will track that expense separately.
Referring to the percentage of current employees who will be eligible to retire within the next ten years, Prof. Hawthorne asked whether a similar chart beginning in 1998 would have been significantly different, i.e., whether current employees are eligible to come up for retirement more quickly (in larger percentages) than in the past. Mr. Hilburn said they had looked at historical retirement patterns, but he was not sure about the percentage. The cost of providing medical for retirees is growing much faster than for active employees. Retiree medical premiums went up 14 percent versus 0 percent for active employees. Over time, the trajectory of cost increases has been higher for retirees than actives.
When asked about out-of-pocket
increases, Mr. Hilburn answered that the plan design for BCBSOK is essentially
the same as for
Mr. Hilburn said he looked forward to discussing the retiree medical report with the senate in November or December. [Note: Mr. Hilburn’s slides are available from the Senate office.]
The Faculty Senate approved the Committee on Committees’ nominations to fill vacancies on university and campus councils, committees and boards (attached).
“In mid-June I sent an email to University of Iowa Faculty Senate President, Professor Michael O'Hara, on behalf of the OU Faculty Senate expressing our concern and sympathy in recovering from the terrible flooding their campus experienced. He sent back a very positive reply thanking us for our concern and support and acknowledged that although it will be difficult and take time, the faculty is optimistic that the campus will be fully functional again.”
“In July, Ellen Censky, former director of the Sam Noble Museum of Natural History, left the museum to take a position closer to her family. Since the position holds faculty status, Provost Mergler requested members of the Faculty Senate to be involved in the hiring of the new director. Being summer, I invited officers from this year’s and last year’s Executive Committee to meet with the candidate on July 15. A letter summarizing their impressions and suggestions was sent to the Provost. Michael A. Mares began serving as the museum director September 1.”
“Some old business that several of you have asked about is the status of the +/- grading system that passed the senate last year. I spoke with Provost Mergler and learned that it was not well received by the Regents; therefore, it is on hold for now. However, the new student system, Banner, does allow for recording +/- grades. Therefore, if you enter your grades in the new system this way, data will be collected without the +/- showing on students’ transcripts. It will give a way to monitor the influence of the +/- on students, and maybe we can bring it back up.” Prof. Miller asked why the regents are against the expanded grading system. Provost Mergler said the regents are concerned that students at the higher end of the grade scale who are pursuing graduate and professional schools would be disadvantaged. Prof. Miller asked if they considered using an A+. Provost Mergler responded that A+ is silent in the proposal. Her impression is the regents are concerned about the students who might be disadvantaged by having an A-. Prof. Brown noted that the report, which is on the Faculty Senate web page, was very extensive and addressed all of those issues.
“Last week, Kim Mish, Professor of Civil Engineering & Environmental Science and a member of the OU Bicycle Committee, met with the Executive Committee to tell us about a Bike Plan he has drafted for OU (see http://www.ou.edu/admin/facsen/, “Current Issues”). The plan is still very much a draft, and some of the ideas, like closing off the south oval to traffic, are not likely to happen, but it is a good time to share the plan and begin to get feedback. Prof. Mish welcomes faculty input. He has been working with the bicycle committee and vice president for Executive and Administrative Affairs Nick Hathaway.”
A list of issues and concerns, not in any priority order, submitted by the senators was distributed at the meeting (attached). The Senate Executive Committee will work through them and would appreciate additional ideas and feedback.
The meeting adjourned at 4:32 p.m. The next regular session of the Faculty Senate will be held at 3:30 p.m. on Monday, November 10, 2008, in Jacobson Faculty Hall 102.
Sonya Fallgatter, Administrative Coordinator
Paula Conlon, Faculty Secretary