One of the benefits plans on the table for discussion would have the university match employee contributions in a defined contribution plan.
Mary Ann Dutemple, a senior consultant with Towers Watson, presented a sample plan to the UM System Board of Curators on Monday:
- The university contributes 5 percent of pay, with a 200-percent match up to 2 percent of pay.
- Thus, the combination of match and contribution would equal 9 percent with the maximum contribution from university.
- Mandatory employee contribution: 1 percent for hourly employees, and 2 percent for professional employees.
This example, Dutemple said, meets UM’s objectives, particularly in competitiveness. A 9-percent contribution from the university would make it competitive among its peers. Additional objectives include:
Link to service: Provides a financial incentive to remain with the university for at least three years.
Program complexity: The system is more complex but would allow for a higher university contribution.
Cost sharing: Faculty and staff must contribute, but at different levels.
Program cost: The net university cost would be 7.8 percent to 8.5 percent of payroll. Additionally, there is a chance not everyone would maximize university contribution.