DATE:
September 27, 2002
TO:
Greg Fox, Chair
Flexible
Compensation Benefits Committee
FROM:
David Bosserman
SUBJECT:
FCBC Recommendation on Retiree Life Insurance
On
June 24, 2002, Harry Birdwell reported to David Peters regarding the Flexible
Compensation Benefits Committee recommendation of May 24 to increase life
insurance (to $10,000) for employees who retire after July 1, 2002. At that
time, Harry indicated that the recommendation had been discussed with the
OSU/
A&M Council of Fiscal Officers and would be considered again in the fall. In
May 2002, the fiscal officers requested additional cost figures and delayed a
decision due to the budget shortfalls that all institutions were experiencing.
At
the September 5, 2002 meeting, Anne Matoy presented the requested cost figures.
She reported that the rate would increase in proportion to the amount of
coverage if the coverage were increased for all existing and new retirees. The
rate would not change if the amount were increased for new retirees only. In
other words, the cost would continue at $.26 per $1,000 of coverage per month,
regardless of whether the new retirees received $6,000, $8,000, or $10,000
insurance coverage.
The
fiscal officers decided not to increase life insurance for retirees because of
continuing budget concerns. Such concerns may have been well founded. Subsequent
to the September meeting, we have been notified of additional cuts.
The fiscal officers do not think it wise at this time to increase
benefits voluntarily when institutions are in the process of reducing their
current budgets.
A first concern continues to be the protection of current employee’
pay.
If you have any questions, please let
me know.
cc:
Anne Matoy
B&F File
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