David D. Reed Vice President for Research 1 Midwest Region Conference CUPA-HR May 3 – 6, 2009 1
University Strategic Plan Goal 1: “Attract and support a world-class and diverse faculty, staff, and student population.” 2 Midwest Region Conference CUPA-HR May 3 – 6, 2009 2
A Compensation Strategy Task Force (Task Force) was created to: Make philosophical and tactical recommendations on the structure of total compensation. Benchmark with organizations that the University competes with for talented faculty and staff. 3 Midwest Region Conference CUPA-HR May 3 – 6, 2009 3
Changes to compensation structure should be cost-neutral to the institution and maintain total compensation for employees. 4 Midwest Region Conference CUPA-HR May 3 – 6, 2009 4
Task Force membership consisted of faculty, staff and academic administrators. Report found at: http://www.mtu.edu/mtuonly/reports/CompStrategy.pdf 5 Midwest Region Conference CUPA-HR May 3 – 6, 2009 5
Compensation Strategy Task Force Members -Brent Burns, Alumni Relations -David Chard, Educational Technology Services -Jim Pickens, School of Forest Resources and Environmental Science -David Reed, Vice President for Research (Chair) -Tim Schulz, College of Engineering -Bruce Seely, College of Sciences and Arts -Shari Stockero, Cognitive and Learning Sciences 6 Midwest Region Conference CUPA-HR May 3 – 6, 2009 6
Michigan Tech’s fringe rate in FY07 was 42.4% , approximately 7% above that of peer and competitor institutions. Michigan Tech’s average faculty salary, across all ranks and disciplines, according to the Oklahoma State Salary Survey, was 6.7% below average. 7 Midwest Region Conference CUPA-HR May 3 – 6, 2009 7
The Task Force had a number of major findings following review of benchmarking information. Some of these are: A. The University is offering faculty starting salaries that are in line with those at comparable peer institutions. B. It is very apparent that the University is failing to keep up with the salaries for associate and full professors. 8 Midwest Region Conference CUPA-HR May 3 – 6, 2009 8
C. Professional staff salaries may also be failing to keep up with national peers, particularly for more senior positions. D. The fringe benefit package offered by Michigan Tech is better and more expensive than all peer and competitor universities that we examined. 9 Midwest Region Conference CUPA-HR May 3 – 6, 2009 9
In their recommendation for benefits, the Task Force recommended: The BLG focus on increasing employee flexibility and choice in order to allow individuals of different ages, family status, and life stages the ability to customize salary and benefit packages to maximize their ability to meet personal needs and goals. 10 Midwest Region Conference CUPA-HR May 3 – 6, 2009 10
The BLG to develop one or more scenarios for reducing Michigan Tech’s fringe rate for regular employees to 34-36% while being cost-neutral to the University and without impacting total compensation to employees. This will require shifting compensation from benefits to salary. The Task Force strongly suggested that employees should be educated regarding the consequences of their choice of contribution amount. 11 Midwest Region Conference CUPA-HR May 3 – 6, 2009 11
Renee Hiller Manager of Benefit Services 12 Midwest Region Conference CUPA-HR May 3 – 6, 2009 12
In May 2000, a Benefits Liaison Group (BLG) was created at Michigan Tech as an advisory group. Their mission was to advise the University leadership on providing the best possible fringe benefit program within the available resources. Membership consisted of key professional staff and University Senate representatives. 13 Midwest Region Conference CUPA-HR May 3 – 6, 2009 13
BLG Members Donald Beck – Professor, Physics Jane Berner, Retiree David Chard - Manager, Instructional Resources Mike Hendricks - Institutional System & Analysis Director Amy Hughes - Internal Auditor Deb Lassila - Budget Director Tony Rogers - Associate Professor, Chemical Engineering Rudy Luck - Associate Professor, Chemistry Renee Hiller - Manager of Benefit Services Dana Johnson - Associate Professor, School of Business Joe Herbig - Controller Anita Quinn - HR Director 14 Midwest Region Conference CUPA-HR May 3 – 6, 2009 14
Philosophy of the BLG has been and continues to be “a shared responsibility on the cost containment/ reduction with University employees and communities.” 15 Midwest Region Conference CUPA-HR May 3 – 6, 2009 15
Starting in February of 2001, one of the BLG’s goals was to “shift employees from unaccountable consumers into the role of informed consumers with the tools to plan and manage their own health care.” 16 Midwest Region Conference CUPA-HR May 3 – 6, 2009 16
In other words . . . Emphasize prevention and effective health management Move from paternalism to individual accountability Assure the flexibility to meet the needs of a diverse workforce – Varying ages and lifestyles Provide comprehensive protection to the seriously ill 17 Midwest Region Conference CUPA-HR May 3 – 6, 2009 17
Benefits Liaison Group (BLG) Charge Charge from the Administration – “To review and assess Michigan Tech’s health insurance program and provide a recommendation to the administration for cost containment for plan year 2010” Compensation Strategy Task Force – “To review and assess Michigan Tech’s benefit package without impacting total compensation to employees” – “To reduce Michigan Tech’s fringe rate by shifting compensation from benefits to salary” 18 Midwest Region Conference CUPA-HR May 3 – 6, 2009 18
Last Year Offer Two Employee Health Plans – HuskyCare PPO – HuskyCare HSA Implement a 10% Employee Premium Share on PPO plan University HSA Contribution – $750 single/$1500 family HuskyCare Dental/Vision Remained the Same Changed Health Plan Administrator from BCBSM to Aetna Projected 2009 Health Plan Savings Redirected into Salary Results – fringe rate lowered to 42.6% (FY09) 19 Midwest Region Conference CUPA-HR May 3 – 6, 2009 19
BLG Recommendations for 2010 HealthCare Plans Continue Two Employee Health Plans – HuskyCare PPO – HuskyCare HSA Increase premium cost share on the PPO from 10% to 15% Continue the University HSA Contribution – $750 single/$1500 family Increase out-of-pocket maximum on HSA to $3000 single/$6000 family HuskyCare Dental/Vision Coverage remains the same – Implement a 10% premium cost share on HuskyCare Dental/Vision 2 – Implement a Core Buy-up plan on HuskyCare Dental/Vsion 1 20 Midwest Region Conference CUPA-HR May 3 – 6, 2009 20
Other HealthCare Changes S-Rider eligibility and monthly premium change Eliminate $65 F-rider charge on the HSA plan Mental Health Benefit Changes 21 Midwest Region Conference CUPA-HR May 3 – 6, 2009 21
BLG Recommendations for 2010 Retirement Plans Choice of 2 new retirement plans (replaces current Defined Contribution Program) – 5% University Contribution with an optional matching program (up to an additional 5% for both University and employee) linked to a 2% salary adjustment Or – Optional matching program up to a 7.5% matching for both University and employee (no base) linked to a 4.5% salary adjustment New plans apply to those in the Defined Contribution Program 22 Midwest Region Conference CUPA-HR May 3 – 6, 2009 22
Open Enrollment Forum Schedule DATE TIME PLACE Wednesday, October 14 5:30pm Special Meeting of the University Senate Monday, October 19 2:00 - 4:00pm MUB - Ballroom A2 Thursday, October 22 9:00am – 11:00am MUB – Alumni Lounge Tuesday, October 27 10:00 - Noon MUB - Ballroom A-1 Wednesday, October 28 2:00 – 4:00 pm MUB – Ballroom A2 Monday, November 2 2:00 – 4:00pm MUB- Alumni Lounge Thursday, November 5 10:00am - Noon MUB – Ballroom A1 Wednesday, November 11th TBD MTRI - Ann Arbor MI Thursday, November 12th 5:30pm - 7pm MUB – Ballroom A2 Friday, November 13th 10am - Noon MUB - Ballroom A2 Monday, November 16 10:00 am - Noon MUB Ballroom B Thursday, November 19 2:00 – 4:00 pm MUB – Ballroom A2 Tuesday, November 24 th 10:00am – Noon MUB – Ballroom A2 23 Midwest Region Conference CUPA-HR May 3 – 6, 2009 23
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