MSU drops retiree health benefit

EAST LANSING, Mich. - As of July 1, a job offer at Michigan State University will no longer include retirement health benefits, the Lansing State Journal reported. The new policy covers both faculty and staff, and is intended to address the rising costs of post-retirement health care, according to the Journal.

President Lou Anna Simon said in a public memo that MSU was the only Big Ten University still offering full employer-paid retiree health benefits to new hires, the Journal reported. The university's current liability for those benefits is about $1 billion, a number expected to reach $5.88 billion by 2045 if the policy is not changed, according to the Journal.

The move does not affect current faculty, staff or retirees, the Journal reported.

Wayne Cass, chairman of the university's Coalition of Labor Organizations, told the Journal that the new policy was not the result of negotiations and that union leaders would be meeting to discuss "how we're going to handle this."

While MSU ranked ninth in the Big Ten in faculty salaries last year, it ranked fifth in total compensation, the Journal reported.

SOURCE:
Lansing State Journal, "New hires at MSU to lose retiree health care," April 14, 2010

FURTHER READING:
Michigan Capitol Confidential, "Analysis: Government Employee Political Clout Obstructs Budget Reform," April 13, 2010