Human Resources

Message from President Sally Mason, July 29, 2008

After weighing the various considerations regarding the Flexible Benefits program for faculty and staff, I have decided to make limited changes to the program over the next two years, while moving toward implementation of the changes proposed in May by the Funded Retirement and Insurance Committee (FRIC).

The benefits provided to University faculty and staff members are a part of their total compensation package and enable the recruitment of talent to support the University’s mission of teaching, research, and service. The current flexible benefit structure is not sustainable over the long term, and if left unmodified will seriously interfere with our capacity to establish new faculty and staff positions as well as provide competitive salary increases. Last year’s cap of $9,000 on employee flex credit contributions to spending accounts was a step in the right direction, but insufficient.

In September of 2007, the Funded Retirement Insurance Committee (FRIC), the charter committee of faculty and staff charged to review and make recommendations regarding retirement and insurance programs, was asked to develop specific recommendations for change during the 2007-2008 academic year. The members of FRIC worked hard and long on this very difficult challenge, and they should be commended by the entire University community for this and many past volunteer contributions. Subsequent to their recommendations, a vigorous campus debate ensued in public forums, within the governance groups, among the deans, via electronic communication, and among various administrative groups. There is little doubt in my mind, that the campus community has been fully engaged in this important discussion.

Throughout the debate many competing interests were identified, and concerns regarding the timing and impact of the FRIC recommendations were expressed. Although the long-term financial imperative for change remains, I believe the most prudent course is one that enables staff and faculty to better plan for any changes of benefits they may experience in the future. Pending Board of Regents approval, I am directing University Human Resources to take the following actions over the next 3 years:

1. On January 1, 2009, maintain the existing Flexible Benefits program under the current structure, except:
   1. Decrease the cap on University flex credits directed to spending accounts from $9,000 to $7,500.
   2. Adopt a new Group Life Insurance cap level: Employer fund 2 ½ times salary up to a maximum salary of $200,000.  (Maximum Group Life coverage will be $500,000).  All other features of life insurance will remain the same, including the option to purchase supplemental life.
2. On January 1, 2010, maintain the existing Flexible Benefits program under the current structure, except:
   1. Decrease the cap on University flex credits directed to spending accounts from $7,500 to $6,000.
   2. Reduce the funding and coverage cap of Group Life Insurance from 2 ½ to 2 times salary.  Continue maximum salary cap of $200,000.  (Maximum Group Life coverage will be $400,000).  All other features of life insurance will remain the same, including the option to purchase supplemental life.
3. On January 1, 2011, implement the May 2008 FRIC recommendations.  The University of Iowa administration may modify these recommendations if financial circumstances warrant or if the University governance process produces additional modifications that improve upon the 2008 FRIC recommendations while still achieving the goals of financial sustainability and competitive fringe benefits.