MINUTES
EMPLOYMENT BENEFITS COMMITTEE
January 27, 2011
Members Present
Don Clothier
Debbie Copp
Brenda Freese - Chair
Frank Lawler
Sue-Anna Miller
Members Absent
Suzanne Gilmore
Alisa Dougless
Don Harrison
Chad Johnson
Simone Pulat
Justin Wert
Scott Moses
Jannie Porter
Will Wayne
Frances Wen
Guest Attendees
Ben Taylor, RV Kuhns (via telephone)
Paul Arcaroli, OU Human Resources
Marcy Fleming, OU Human Resources
Ex Officio Members
Barbara Abercrombie
Julius Hilburn
Nick Kelly
The meeting was called to order by the Chair at 1:30 pm.
I.
Approval of Minutes

The December 2010 minutes were approved with one minor change to the second
bullet in item two. The corrected bullet will read:
The RPMC will meet once more prior to winter break. Although most employee
feedback has been positive, the committee will delay a recommendation to the
Regents until March 2011 in order to address issues submitted through the
website.
II. Master Record-Keeper Update

Julius Hilburn informed the group that the Retirement Plans Management
Committee (RPMC) has received many comments from the campus community.
He offered the following updates:
 The RPMC went back and reviewed the reasons behind the decision to
redesign the plans.
 Changes in the regulatory environment









Current plan structure is administratively complex
Best practices in Plan Management and Administration have
evolved
 A desire to improve participant experiences and investment
outcomes.
 Julius noted that there are approximately 10,000 individuals in the plan.
Moving to the new platform will allow OU members to enjoy group
purchasing power. The savings generated will be savings to the members,
not OU.
A brief history was given of actions taken to date, ending with the initiation of
campus discussion of the new plan in October 2010.
There has been some discussion as to what led the RPMC to choose Fidelity over
other vendors.
 The RPMC decided it would be in the best interest of all members to
select a vendor that could offer a variety of investment families.
 TIAA CREF offers annuities that cannot be managed by another
vendor.
 Vanguard does not have the capability to offer anything but
Vanguard products.
 Fidelity was able to put a TIAA CREF traditional annuity option in
the Tier 3 lineup.
A review of the proposed core investment lineup was given.
 Tier 1: Default Option: Target Date Retirement Funds (Fidelity Freedom
Funds)
 Tier 2: Index Options (5 options plus 2 additional options to be
considered by the RPMC in January)
 Tier 3: Actively Managed Options (9 options, including a traditional
TIAA CREF annuity option)
 Tier 4: Self-Directed Brokerage Window (Fidelity Brokerage Link – Over
190 Investment Families – Over 3,000 Choices)
 Some funds in Tier 4 do have transaction fees.
During the transition period all members will be asked to make new elections.
Those who do not make the new elections will be defaulted into the Tier 1 –
Target Date Retirement fund.
The RPMC will continue to consider additional products if underrepresented
classes are identified.
Ben Taylor of RV Kuhns informed the group that there should be a stable value
fund available in all plans.
The following overview was provided for plan costs:
 There is an annual $48 per participant fee and $30 in revenue sharing.
 All plan revenues and revenue sharing will be used to pay plan costs.
 As assets in the Fidelity platform grow, fees and/or revenue sharing will
be reduced.


Participant Benefits:
 reduced fees
 increased assets at time of retirement
 online enrollment
 loans/hardship withdraws
 onsite education
 active oversight of core investment lineup
Julius concluded his presentation by asking that the EBC be prepared to make an
official recommendation to the Board of Regents at the February meeting.
III. 2012 Benefits Outlook








Nick Kelly gave a presentation on the health insurance outlook in 2012. He
reviewed the renewal increases and impacts of those increases for all years OU
has been with BCBS.
The projected increase for 2012 is 7% to 9% for the PPO/HCA and 10% - 14%
for the HMO.
 If premiums increase by 7.7% in 2012, as they did for 2011, it will add an
additional $5 million to the budget.
 Based on the previous two increases the HMO premium should surpass
the PPO in 2012.
Human Resources is engaged in discussions with BCBS regarding strategies to
reduce costs in 2012.
In addition to discussions with BCBS there is the option of going to market with
an RFP. However, going to market poses the following challenges:
 Very expensive and time consuming
 May not get significantly better pricing
 Difficulty analyzing multiple plans in an environment where we are
exploring a variety of significant changes
BCBS has committed to providing plan-specific 2012 renewal numbers by the
end of February.
Human Resources, in conjunction with Segal Consulting, will meet with BCBS
in February to discuss various plan models for the coming year. Details of the
models will be available at the March EBC meeting.
Potential changes will be evaluated based on the following:
 Market Position
 Cost
 Member impact
 Ability to communicate and implement
In addition to evaluating plan design changes Human Resources will also
evaluate the following regarding contribution strategy:
 Can/should Tiers be consolidated or salary limits otherwise changed?
 On which plan or average of plans should the University base its
funding?



Are members paying a competitive amount for each category of
coverage?
Nick concluded the presentation by informing the group that pharmacy design
changes should be a part of all plans and the pharmacy benefits should be
relatively consistent across all plans. Additionally wellness incentives should be
integrated into all plans.
Julius commented that at this point he recommends OU continue to work
aggressively with BCBS to reach a mutually agreeable arrangement for the next
year.
IV. RFP Update

Human Resources is currently preparing to go to market and request proposals for
AD&D, Life, and Vision insurance. It is anticipated the requests will be sent out
in late February.
V. Other Business

The next regularly scheduled EBC meeting will be Thursday, February 17, 2011.
The meeting was adjourned at 3:30 p.m.