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Charge

The charge to the Total Rewards Ad Hoc Task Force was to assist the Vice President for Human Resources (VPHR) in the development and communication of recommendations regarding the Total Rewards Program offerings (defined below) for employees and retirees, and to facilitate the dissemination of information to and from stakeholders, consistent with the pre-established objectives and assumptions.  The campus Chancellors and other leaders discussed Task Force recommendations with the VPHR.

Background

This Task Force was formed to work with the VPHR, other system personnel, and external consultants to develop recommendations on the University’s Total Rewards. For the purposes of this Task Force, Total Rewards is defined to include the following programs/plans for employees, retirees and dependents:

• Retirement plan
• Medical insurance
• Ancillary insurance benefits (Long Term Disability, Dental, Vision, Life/AD&D)
• Tuition Reduction/Educational Assistance
• Post-retirement benefits
• Leave benefits

Mandated programs such as worker compensation, unemployment insurance, Medicare tax, and social security programs are included in the overall cost of Total Rewards, but are not be included in the Task Force charge.

Salary and wages comprise the majority of the Total Rewards funding, but will not be part of the Task Force review.  However, the Task Force must understand the relative salary and wage position of each employee group relative to peers, and consider the benefit programs as part of the total compensation goals set forth by campus and system leadership.

The Task Force was provided with significant amounts of data and reports previously gathered or commissioned to assist them in meeting their charge.  They were also, with consideration of cost and the resources available, able to request additional data and/or reports.  The Task Force commenced in June 2013 and submitted their final recommendations in April 2014 to the 911±¬ÁÏÍø President and Board of Curators. 

Objectives and assumptions

The Task Force assisted the VP of Human Resources in developing recommendations using the objectives and within the following constraints and assumptions:

• Retirement plan benefits for current employees and retirees in the Retirement Disability and Death Plan and the Employee Retirement Investment Plan shall not be reduced and the viability of the retirement trust fund shall remain protected. However, the Task Force may consider additional but equivalent defined benefit distribution and opt-out scenarios that may be attractive to employees.
• Benefit costs (excluding FICA) as a percent of salary must remain at or below the average of the appropriate industry or higher education peer group.
• Consideration will be given to the current and expected employee and retiree costs with the goal to remain at or below appropriate benchmarks.
• The Total Rewards package must remain competitive as defined by peers for each major employee group, including benchmark institutions to be used for future comparison.  Similarly, consideration must be given to the impact of the Total Rewards components on the recruitment and retention of faculty and staff.
• Total rewards should be considered of value by employees and retirees using pre-established measures while achieving the cost and competitiveness objectives as outlined above. Focus should be on overall plan goals, objectives, and types within various cost structures, and not on plan design details such as medical plan premiums, deductibles, etc., or contribution levels.
• Review should include efforts to increase the cost predictability for the UM Total Rewards Program funding for both participants and the university, within the targeted cost of total rewards.

Members must recognize that it may not be possible to meet all of the goals and objectives with a few recommendations.  They must further recognize that not all stakeholders will be satisfied with the recommendations, even if the recommendation is to make no change to the current Total Rewards program.  Therefore part of the responsibility of the Task Force is to assist the VPHR in outlining the considerations given to various options, and the reasons for the recommendations.

Task Force considerations and recommendations must be based on data such as employee demographics (e.g., salary, length of service, values, selections, age), and not on anecdotal information or historical perceptions.

Task Force membership

See a list of the Task Force members.

The VPHR selected the Task Force members from the recommendations submitted as described below.  When appointing members of the Task Force, care was taken to appropriately represent the diversity of the university population, with particular attention to generational, longevity, employee categories, and location diversity.  The Task Force was to contain no more than 16 members, with four or five of those members being self-nominations of current members of Retirement and Staff Benefits Task Force.  The VPHR was charged with selecting one or two members who are not university employees or beneficiaries, but represent external stakeholders, and have an understanding of the university’s mission.  Additional members were selected from nominations received from the following groups:

• Intercampus Faculty Council (IFC) members
• Campus Chancellors
• Intercampus Staff Advisory Council (ISAC) members
• UM Health Care System
• Self-nominations from interested faculty and staff

In addition to the chair (VPHR), the Task Force included the following advisors:  Phil Hoskins, Legal Counsel; Kelley Stuck, Associate Vice President for Total Compensation; and Tom Richards, Interim Vice President for Finance.  The Task Force was supported by external consultants selected and engaged by the university.

Task Force responsibilities

Task Force members prepared for all meetings by reviewing the material provided prior to each meeting.  The initial meetings included some education of the current program and the national trends, but members were expected to do some level of self-education and preparation on their own, using resources provided.  The VPHR and system staff were available to assist Task Force members in reviewing and/or interpreting the information, but it was critical that the members were prepared to commence an informed discussion of the Task Force charge and objectives, followed by identification of recommendations for consideration and analysis. For this reason, it was also expected that members make the Task Force a priority and regularly attend meetings.