ALBUQUERQUE, N.M. — University of New Mexico president Bob Frank assured faculty and staff Tuesday that he was not considering closing the retiree health care program to future retirees despite its soaring costs.
“We are not scaring anyone and you’re making statements that are way off the deep end,” he said during a Faculty and Staff Benefits Committee meeting to an employee who had heard the cutoff was a possibility.
“There is a crisis on one hand,” he said, but he insisted employees should have time to evaluate possible solutions.
The program, which provides health coverage to retirees who don’t yet qualify for Medicare, cost the university $14 million last year, and that cost is forecast to grow to $153 million a year within 30 years if no changes are made.
Frank’s comments came a few hours after a board of regents meeting, at which Regent Jamie Koch asked for a vote next month “up or down” on whether to continue funding the program for future retirees.
On top of the pressing issue of how UNM should tackle growing costs of the program, the university’s also grappling with how fast a decision should be made.
A resolution approved by regents Tuesday calls for a team of administrators, retirees, faculty and staff to look at reducing the amount the school pays into the program. Frank said later that the Faculty and Staff Benefits Committee, which is part of the Faculty Senate, will play that role.
But finding potential solutions could mean months of meetings, and some regents want a solution sooner.
“I think it’s at the urgent level,” Regents president Jack Fortner told the Journal. “I don’t think it’s going to be a popular decision.”
However, Fortner said it was important to hear from all constituents. He said regents next month will vote only on whether to take some sort of action regarding the health plan — and not on a particular solution.
“Right now the percentage (that UNM pays in premiums), honestly, is not working,” Fortner said.
UNM currently pays 54 percent of premiums for 2,500 retirees, according to vice president for Human Resources Helen Gonzales. There are another 1,000 employees who are eligible to receive the UNM benefits, and 6,500 who are in the pipeline.
UNM would need to set aside $25 million a year to cover the costs from now on, according to a recent audit.
One idea mentioned at the benefits committee meeting was creating a new trust fund “that cannot be raided for any reasons,” said executive vice president for administration David Harris. All university employees could be required to contribute a portion of their pay to that fund.
Regent Gene Gallegos said in a later interview that idea might work but could be unpopular.
“It would come at a time when the employees would be hoping for a bit of a (pay) raise. It would be kinda tough to say, ‘No, you’re not having a raise but we’re gonna take a certain percentage of your pay,’ ” Gallegos said.
He also said Koch’s request for a vote next month was premature.
“The idea was that we’re supposed to have some alternatives and see how we can best do that. I don’t think we’ll be prepared to (make a decision) in January,” Gallegos said. “You have to have a process and hear from everybody … It’s making a big difference for people, so you want them to have some input.”
Staff Council president Mary Clark said after the regents meeting that the committee needs enough time to discuss the program and make recommendations.
“With the holidays coming, I don’t believe that 30 days is enough time for us to complete this task. I hope the Board of Regents will give us time to review this issue and listen to what we have to say,” Clark said.
UNM officials say more staff than professors retire before turning 65 because many have physically demanding jobs.
Clark said she understood the need to find a solution soon, and was glad Frank is not considering eliminating future retirees from the program.
Frank told committee members that although he felt pressured to find a solution quickly, he didn’t want to rush into anything without first hearing from employees.
“If everybody participates we can make small steps that makes this much less painful,” he said.
Staff and faculty committee members said they would like to meet weekly to try to have some sort of plan before the next regents meeting on Jan. 14.
— This article appeared on page A1 of the Albuquerque Journal