The University of Oklahoma (Norman campus)
Regular session - April 8, 2002 - 3:30 p.m. - Jacobson Faculty Hall 102
office: Jacobson Faculty Hall 206 phone: 325-6789 FAX: 325-6782
e-mail: facsen@ou.edu web site: http://www.ou.edu/admin/facsen/

The Faculty Senate was called to order by Professor Al Schwarzkopf, Chair.

_____________________________________________________________________________

TABLE OF CONTENTS

Health benefits for 2002-03

Preliminary nominations for committee vacancies

Endowed chairs/professorships

Senate Chair's Report:

_____________________________________________________________________________

The Senate Journal for the regular session of March 11, 2002 was approved.

Prof. Schwarzkopf reported that on March 27-28, the OU regents approved a health care program with numbers that were different than expected for retirees. In particular, retirees would pay $20 per month for Schaller-Anderson and more for Blue Cross. When the Senate Executive Committee raised the issue with President Boren, the president indicated that he wanted parity and said the figures would be changed. Prof. Schwarzkopf invited Vice President for Administrative Affairs Brian Maddy and Benefits Manager Nick Kelly to explain in a public meeting exactly what the package will be. Mr. Maddy explained that the current policy is that the University pays for retiree health benefits regardless of the plan they are in. The proposal taken to the regents was that the University would annually determine the amount it would pay. Next year, the Blue Cross plan (Option 1) will cost $411 per month for retirees and $278 for active employees. The rates for retirees are that much higher because of their experience. The plan the University will cover is Option 2--Schaller-Anderson, which costs $235 for an active employee. Blue Cross will cost $278, so if someone chooses Blue Cross, there is a $43 difference. For retirees, the University is going to pay $308 for the Schaller-Anderson plan. Blue Cross will be $411, so the retiree would pay the difference between the two. In discussions with retirees, they have indicated that they want the same thing that active employees have. Because of the cost differential, a lot of people probably will not choose Blue Cross in the future, but employees have a choice.

Prof. Schwarzkopf asked whether the University expected to pay the full cost of the default plan, Option 2--Schaller-Anderson, for active and retired employees. Mr. Maddy said that was correct. It is $235 for active and $308 for retirees. Prof. Schwarzkopf pointed out that there are two classes of retirees: those who are not eligible for Medicare and those who are. Mr. Maddy said the cost for a Medicare retiree is $292 for Option 2. He said the University would pick a plan, not a dollar amount, to pay for. Prof. Schwarzkopf asked about the premium for a retiree who chooses Blue Cross. Mr. Maddy said the pre-Medicare retiree would pay $103, the Medicare retiree $46, and active employee $43.

Prof. Willinger pointed out that the idea behind insurance is a pool, with the risk spread across that pool. By segmenting retirees, they are forced to pay more than active employees who are pre-Medicare. Mr. Maddy said the costs are higher for individuals who are pre-65. If we rolled them into the complete group, the rates the University would pay would be something like $250-$260. When groups are rated, so are their dependents, and the University does not pay for dependent coverage. Mr. Kelly said it was very common to rate retirees separately. Mr. Maddy said the University had had separate rates for retired and active since 1991. The employer tries to identify the costs and then decide how it is going to pay. We cannot rate retirees in with the active if we do not rate their dependents into the group as well. Prof. Willinger commented that segmenting employees was starting a situation that would allow the University to further segment employees. The University has paid 100% of the Blue Cross for retirees up to now. Mr. Maddy said the University was doing the same for retirees as it was for active employees, that is, it will pay for one plan, and those who want to be in the other plan have to pay the difference. Prof. Willinger replied that the retiree charge, though, would be based on their segment. Mr. Maddy noted that the Blue Cross plan would get more and more expensive because that is the plan retirees choose. Prof. Magid asked whether retirees choose Blue Cross because they have left this area. Mr. Maddy said he was told that the retirees received the information so late last year that they did not have enough time to understand it. It is likely that they will choose Schaller-Anderson this year. The Schaller-Anderson plan is truly a Medicare supplement, whereas the Blue Cross plan is not. Prof. Kenderdine said that now that the University has started segmenting groups, we could end up with smaller and smaller groups instead of an insurance pool. Mr. Maddy pointed out that the University would still pay 100% of the premium if an employee chose a certain plan.

Prof. Schwarzkopf explained that segmentation was not new. However, it has not been applied to employees, just to spouses. He said what worried him was what was approved by the regents no longer had the University making a commitment to providing free health care to retired employees. Several of the e-mails he received noted that employees had accepted lower pay with the expectation that they would have a strong retirement program. Mr. Maddy said there was parity between what we do for the active and retired. The University is still paying for a plan, just not every plan. Prof. Scherman asked about the impact on a retiree who leaves the state. Mr. Maddy said there is a comfort level with Blue Cross because it is a national name. There really are no consequences because we rent a network that is the second largest national network of providers. A list of providers in each community is available.

Prof. Roegiers asked whether the retirees had representation and if so, why the Senate was discussing the situation. Prof. Schwarzkopf said the retirees have an association, but they and the staff do not have the voice the Faculty Senate has. Because many faculty members will retire from here, they have a vested interest in making sure the policies are equitable. Through a miscommunication, the negotiations went to the retirees association but not the Employment Benefits Committee. Several faculty asked the Faculty Senate to step in, so Prof. Schwarzkopf thought a discussion in the Senate was the best way to make sure all parties did the right thing and the expectations were heard. Prof. Roegiers said he felt uncomfortable making decisions for another group. Prof. Schwarzkopf said the intent was to make sure retirees were well represented. Mr. Maddy said some changes in the language and in some numbers would be made at the next regents' meeting. The language will say there is a default plan that the University will pay for for the employee or retiree. Prof. Milton asked about the increase in premiums for retiree dependents as opposed to active. Mr. Kelly said the active employee increase would be about 17%; retiree dependent costs would increase about 30%. Mr. Maddy pointed out that because we were setting rates for 15 months away, the rates would not be right next June. Every year, some component of the premium covers excess costs from prior years. Mr. Kelly added that there is a difference in premium between Medicare dependents and non-Medicare dependents. Mr. Maddy said a question had been raised about the Oklahoma Teachers Retirement System contribution to retiree health care. OTRS puts in an average of about $102, but that money is already factored into the rates.

Prof. Schwarzkopf asked Mr. Maddy to discuss the results with the Employment Benefits Committee. Mr. Maddy said the EBC would discuss the issue at its next meeting. Prof. Schwarzkopf asked whether the Faculty Senate wanted to take any action. Hearing no request, he said he agreed that it was not the Senate's business to accept rates for retirees but that the Senate should intercede for them if necessary.

A preliminary list of Committee on Committees' nominations for end-of-the-year vacancies on university and campus councils, committees, and boards was distributed at the meeting and will be voted on at the May meeting. Nominations can be made from the floor with the permission of the nominee.

Prof. Schwarzkopf said the purpose of the proposed revisions in the policy was to give units the flexibility to appoint internal candidates to professorships and use endowment money to reward and retain existing faculty (attached). He said he also wanted to work on a practice for distinguishing between high level administrative positions that would require a national search with faculty participation and those that ought to be presidential prerogative to appoint.

Prof. Harrison asked for an explanation of the purpose of the review committee. Prof. Schwarzkopf said the department would decide whether to have an internal or external search. In either case, there ought to be a vetting committee to determine whether the candidate was appropriate. It would protect against people being appointed because they were friends with somebody, and it would protect the candidate from someone saying s/he did not deserve the appointment.

Prof. Zagzebski asked whether the purpose was to make it easier to do an internal search. Prof. Schwarzkopf said it was his impression that all searches were required to be national. If a unit wanted to use the money to reward someone internally, then having a fake national search was slow and unfair. The biggest problem in salary discussions is that the state does not give us enough money to deal with compression and inversion. We have to use some source of money other than state money to retain quality faculty. What President Boren agreed to was national searches for chairs but the option of an internal search for professorships. Prof. Schwarzkopf said we would not want to give named money to somebody who would not ordinarily qualify in a national search. Prof. Roegiers said it was more prestigious if an internal candidate was selected for an endowed chair or professorship in a national search. Prof. Knapp said the committee, which represents the department and also the university, would review the candidate. He commented that the price of a national search was not free. Prof. Davis said he did not think an internal search would be much of a search process if the idea was to reward a specific person.

Prof. Milton said he thought the proposed language should be revised so that supporting documentation would always include letters from external evaluators. Prof. Schwarzkopf said that was what he hoped would happen. He said Provost Mergler wanted a good practice in place that would assure a good return on the money. Prof. Morrissey asked what would happen to the former salary of the candidate. Prof. Schwarzkopf said the money could go toward funding the endowment or could be reallocated. A lot of money has been raised in the fundraising campaign, but it is not coming back to those in the trenches. Prof. Knapp remarked that focusing on the money clouded the issue of whether the policy provided sufficient assurance that any internal hires would pass muster. Prof. Kenderdine noted that in a couple of cases, the College of Business tried to recruit candidates for an endowed chair, and the candidates did not want to be considered if there was a strong internal candidate. He said the proposal to look first at an internal search was a more honest approach. If a candidate has been here at least four or five years, his/her colleagues ought to have a sense of the caliber of his/her work, and some sort of vetting ought to be adequate. Prof. Harrison said he thought part of the proposed process was redundant. Prof. Schwarzkopf said he might need to adjust some of the language. He said what he was trying to push for was if the president decided to make an internal appointment, a faculty committee would review the appointment and report any concerns before it went to the regents.

Prof. Schwarzkopf announced that the faculty awards ceremony was tomorrow, April 9. Prof. Hart complained that faculty members were notified by e-mail and given only three days' notice. Provost Mergler said the special events people were busy with the Middle East conference. Also, they learned the date so late, that the usual location was not available. Prof. Hart pointed out that two other major lectures were being given that same afternoon. Provost Mergler commented that this year was not handled like we would want and that we should be going back to the way the event has always been handled. She pointed out that the president likes to give out these awards, and she encouraged the faculty to attend.

Prof. Schwarzkopf said the Executive Committee had discussed with the provost and various others the issue of split appointments, which was raised at the January Senate meeting. There is no clean way to handle the situation, so it is important to put the conditions of the appointment in a contract.

The meeting adjourned at 4:35 p.m. The next regular session of the Senate will be held at 3:30 p.m. on Monday, May 6, 2002, in Jacobson Faculty Hall 102.

____________________________________
Sonya Fallgatter, Administrative Coordinator

____________________________________
James S. Hart, Jr., Secretary