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May 15, 2003

Retired faculty medical insurance under review

Pitt’s administration is considering reducing the medical insurance coverage the University provides for its retired faculty.

Currently, Pitt faculty who retire before age 65 may continue to receive the same medical insurance benefits they got during active employment — until they turn 65. At that point, retirees may choose from several options of insurance that coordinate with Medicare A and B. Depending on the option selected, there is no cost, minimal cost or full cost to the retiree.

The cost to Pitt of providing coverage beyond Medicare to its retired faculty has increased dramatically and will do so again next year, Executive Vice Chancellor Jerry Cochran reported to the University Planning and Budgeting Committee (UPBC).

Cochran said Pitt’s benefits consultants, Mercer Human Resources Consulting, Inc., found that only 23 percent of employers nationally provide a retiree insurance plan. Among those employers, Mercer found, only 24 percent pay a portion of the costs — and that percentage is decreasing, according to minutes of UPBC’s March 20 meeting.

The minutes were published in the May 1 University Times, and also are available at:

Pitt is unique in requiring no minimum amount of service before retirees become eligible for medical insurance coverage, Cochran told UPBC. He suggested capping the University’s downstream liability and imposing a service requirement, perhaps a formula combining age and years of service.

Pitt senior administrators are analyzing the University’s medical insurance coverage for retirees and have made no decisions yet, Cochran told the University Times. He said the administration will keep UPBC informed about the issue.

Economics professor Herbert Chesler, chairperson of the University Senate’s benefits and welfare committee, was irritated to learn of the proposed changes through the UPBC minutes.

“Matters affecting retired faculty certainly fall within the domain of the benefits and welfare committee,” Chesler said. “But we were not consulted about this [proposed change]. We were not even informed. Cochran does not bring anything to our committee.”

— Bruce Steele

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