Regent Panel Targets Benefits

A University of New Mexico regents committee on Thursday pushed forward a resolution to tackle the soaring costs of the school’s retiree health care program and to warn employees their benefits may be reduced.

The resolution, passed unanimously, instructs President Bob Frank to assemble a team of administrators, retirees, faculty and staff that will look at ways of reducing the school’s projected benefits cost of nearly $153 million a year over the next 30 years. The cost was $14 million last fiscal year.

The team has to produce a plan by the next budget cycle in the spring.

What’s more, the resolution was amended to include what amounts to a warning that UNM may change the ratio of contribution for the program.

“We know there’s a problem, and we know it’s pretty big,” said David Harris, executive vice president for administration.

The benefit allows retirees to stay on the UNM health care plan until they’re eligible for Medicare. The university pays up to 60 percent of a retiree’s premiums.

With 2,500 current retirees and dependents who are part of the program, another 1,000 employees who are eligible, and 6,500 in the pipeline, that’s a cost the university will not be able to afford much longer.

An audit released last week found UNM would need to set aside $25 million annually to meet the program’s costs.

The goal of the team is to have a plan that could be adopted next fiscal year, which begins in July.

“It’s ludicrous to think we’re just gonna say, ‘it’s just gonna go away,’ ” Harris said.

Reducing the amount UNM contributes to retirees’ health care plans is an option, although UNM fears more of the employees who are currently eligible but have not retired will do so sooner in order to not lose those benefits.

“You have a number of interests that we’re going to have to address in the future,” Harris said.
— This article appeared on page C1 of the Albuquerque Journal