University of Vermont

Former President Daniel Mark Fogel

March 16, 2011

To: UVM Faculty and Staff
From: Daniel Mark Fogel, President

Re: Post-Retirement Medical Benefits of Plan Change

After long and careful consideration of the good work of University Benefits Advisory Council, including all of the input to that group from the campus community, and after extensive discussions within the administration and with the Board of Trustees, I am writing to describe how the University is planning to change its post-65 post-retirement medical benefit (PRMB) plan as it relates to benefits for those age 65 and older.
The changes described in this memo have also been shared with the three unions on campus that have collective bargaining agreements with the University dealing with retiree medical benefits. Earlier today, the administration notified the leadership of these unions, as well as the Staff Council, about the changes described here. There is language in each of the three union agreements that gives the University the right to modify these benefits for post-65 employees after any requested consultation with the union and provided that there is at least 90-day notice prior to final changes.
Although we are providing notice of the changes to the post-65 retiree medical benefits now, we also anticipate that there will be changes to the medical benefits provided to those employees who retire prior to age 65. The details of any changes to the pre-65 medical benefits plan will not be finalized, however, until the University has satisfied its collective bargaining obligations. We anticipate, however, that all faculty and staff will be notified of any changes in the pre-65 plan at least six months in advance of the effective date in order to minimize the need for anyone to expedite retirement plans unnecessarily.
Our planned changes to the UVM PRMB plan (post-65) are as follows:  

  1. Currently retired employees will continue to be eligible to participate in the University’s defined benefits PRMB plan with the cost-sharing formula that is currently in place.
  2. Employees hired on or after July 1, 2011 who meet the eligibility requirements that are in place at their date of retirement will be eligible to participate in the University’s PRMB plan but will be individually responsible for the entire cost of the premium.
  3. Current employees who have, by June 30, 2011, met the time in service requirements that were in place at their date of hire and who are at least age 65 will, upon retirement, be eligible to participate in the University’s defined benefits PRMB plan with the cost-sharing formula currently in place if they retire by June 30, 2012.
  4. Current employees who do not retire by June 30, 2012, and those hired by June 30, 2011 will, upon retirement, be eligible to participate in the University’s defined benefit PRMB plan with the cost-sharing formula described in Appendix A; Appendix B shows current contributions levels and the current premium cost. (The attached document contains this memo with the additional appendices.) 
Human Resource Services will offer a variety of public forums and one-on-one counseling sessions on these changes. In addition, questions and concerns may be conveyed by email to
The decision to make these changes has been a difficult but necessary one. As suggested in remarks posted online with the UBAC report, we believe that fiscal necessity and our shared interest in UVM’s long-term viability inevitably require adjustments in our plan. I am pleased, however, that we have achieved the aspirations I outlined last fall: to protect current retirees; to retain a defined benefit plan for eligible employees, thus preventing anyone’s outliving his or her benefits; to permit access to the PRMB for new employees, but only without employer subsidy, thus averting what otherwise would grow to be an intolerable liability over the next fifty years of more than $5 billion; and to achieve these goals within a premium cost-sharing schedule that remains progressively income-sensitive and that honors length of service. It is my sincere belief that through our extensive consultations we have struck a solution to this very real challenge that is prudent, sensible, and equitable. Thank you to all who have contributed to the consultative process.

Last modified March 17 2011 12:32 PM

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