UMSYSTEM.EDU November 19, 2009 1 UMSYSTEM.EDU Missouri S&T Faculty Senate November 19, 2009.

UMSYSTEM.EDU November 19, 20091UMSYSTEM.EDU

Missouri S&T Faculty Senate

November 19, 2009


UM Board of Curators

UMSYSTEM.EDU November 19, 20093

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


How Does the Money Flow?

When UM share isGreater than budget


Comparator Institution BenchmarksHewitt 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


Benefit Plans Contribution AnalysisBased on 2009 Contribution Rates


UM Retirement, Disability & Death Benefit Plan

Financial Status


• 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.


UM Retirement, Disability & Death Benefit Plan

Billion


History of Actual UM Contribution Rates

% of payroll


UM Medical Benefit Plan

• Great West Healthcare (CIGNA)• 1/1/10 Plan Design• 1/1/10 Premiums• Prescription Drug Benefits


Premium Changes

2007 2008 2009 2010

UM Choice Health Care Program

0% 0% 3% 5%

UM Catastrophic Medical Program

0% 0% 5% 5%

Retiree Indemnity Medical

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%


Prescription Drug Benefits

• Express Scripts – St. Louis Business Health Coalition

• Home Delivery


Allocation of Drug Spending

©2008 Express Scripts, Inc. All rights reserved.

Costs & Trends

Key Brand Drugs Losing Patent Protection

2009 2010 2011 2012 2013Annual Sales

$10.8 Billion $8.1 Billion $16.6 Billion $20 Billion $8 Billion

• Adderall XR• Ambien CR• Casodex• Cellcept• Depakote ER• Prevacid• Topamax• Valtrex

• Aricept• Arimidex• Cozaar• Effexor XR• Flomax• Hyzaar• Patanol• Sanctura

• Actos• Levaquin• Lipitor• Protonix• Zyprexa

• Avandia• Avapro• Detrol LA• Diovan HCT• Geodon• Lexapro• Plavix• Provigil• Seroquel• Singulair• Viagra

• 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


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


National Health Care Reform

UMSYSTEM.EDU November 19, 2009 1 UMSYSTEM.EDU Missouri S&T Faculty Senate November 19, 2009.

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