UConn-AAUP Informational Meeting #1 SEBAC 2017 Framework June 5, 2017

The CT Mirror-May 31, 2017 Calling $1.5 billion in proposed union concessions insufficient given Connecticut’s $5 billion budget crisis, Senate Republicans called Wednesday for legislators and Gov. Dannel P. Malloy to dramatically reshape labor laws to force larger savings in wages and benefits “We have the power within the legislature to change statutes, prospectively and currently, to achieve savings,” Fasano said. “ … This is the power we have. We don’t have to sit back and wait.”

SEBAC/Malloy Began November 2016; 6-months later – “Framework” which may lead to a Tentative Agreement; Included in Framework: Guidelines for 5-year Unit Contracts Modifications to current SEBAC Agreement

Guidelines for Unit Contracts General Wage Increase August 23, 2016 0% (Hard Freeze) August 23, 2017 0% (Hard Freeze) July 1, 2018 0%, One time payment $2,000 Pro-rated for part-time/Adjs August 23, 2019 5.5% August 23, 2020 5.5%

Guidelines (Cont.) Longevity Furlough Days 2017 Longevity Payments will be on time 2018 April Longevity Payment will be delayed until July 1, 2018 Furlough Days Three furlough days to be taken during FY 18. Currently under negotiations as to the exact days.

Guidelines (Cont.) 4-years Job Security, consistent with 2011; Continuation of language to prevent privatization leading to layoffs; Allow use of sick time for family FMLA; Allow for more FMLA intermittent leave.

Modifications for SEBAC SERS – All tiers July 1, 2017: 1.5% increase in pension contribution. Member may elect to offset this pension increase with a decrease of 1.5% in the Retire Healthcare contribution – currently 3%. Reimbursement to the Retire Healthcare Trust Fund will be made with a .5% increase in your 3% contribution beginning July 1, 2019 and for the next 3 years. July 1, 2019: .5% increase in pension contribution.

ARP July 1, 2017 Employer contribution decreases to 7.25%; Employee contribution will increase to 5.75%, unless the employee opts out of this .75% increase. July 1, 2019 Employer contribution decreases to 7.0%; Employee contribution increases to 6.0%, unless the employee already opts out of the .5% increase.

Hybrid Always 3% higher than their equivalent SERS Plan (better plan); Tier IIA and III pay 1.5% increase on 7/1/17 and .5% increase on 7/1/19; Tier II currently pays 3% to SERS and 2% to ARP. On 7/1/17, you may opt out of paying additional 1.5% increase with a decrease to ARP of .5%. On 7/1/19, you may also opt out of paying the .5% increase with a decrease to ARP of .5%. ARP = 0%

Tier IV Retirement – Tier IV – Hybrid Plan Combination of a Defined Contribution and a Defined Benefit Plan SERS (benefit) contribution additional 3% immediately (5% total); Define contribution - State contribution 1%, employee contribution 1%, 5% voluntary; No breakpoint – 1.3% multiplier; Split the Risk (6.9% return) to max of 2%; OT effect on base-pay pension may not be greater than 60%;

Tier IV 3% Retiree HealthCare contribution 15 year payment; 3% increase to HealthCare premium immediately, capped at 16%; Hybrid and Hazardous Duty benefits same as Tier III; ARP – Employer and employee contribution 6.5%.

COLA Modifications Effective 7/1/22 - Modified COLA Formula Increase in CPI-W of 2% or less - receive actual increase; All other increases covered by current formula; >2% – minimum COLA of 2% and a maximum COLA of 7.5% Within range of 2% - 7.5%, calculation will be 60% of annual increase up to 6%, and 75% of annual increase over 6%

COLA Modifications (Cont.) Effective 7/1/22 - First COLA (CPI-W) Received 30 months after retirement date; COLA circuit breaker – if CPI-W during retiree’s first 18 months of retirement goes above 5.5% annualized, the COLA is computed using the above formula, minus 2.5%, multiplied by 1.5.

Healthcare Costs 3% Retiree Health Care/10 years payment - unchanged Premium Share Increases – Active Employees (costing handout) July 1, 2019: 1% increase; cannot exceed 15% total; July 1, 2020: 1% increase; cannot exceed 15% total; July 1, 2021: 1% increase; cannot exceed 16% total. Effective 7/1/17 – New Employees 15% premium share

Healthcare Costs Changes Increased co-pay for non-emergency room visit - $250 Prescription co-pay increase to $5/$10/$25?$40

Healthcare Enhancements Implement a Standard Formulary – prevents price gouging; preferred brands Member’s doctor – final appeal on necessity for non-formulary “Smart Shopper” provides rebates for numerous procedures based on quality, safety, and cost of provider. (gift card) Centers of Excellence – list of highest rated, best cost options for medical procedures

Future Retirees Health Care (RHC) No changes in benefits for Normal Retirees retiring with 25 years or more in service; “RHC Effective Date” - October 3, 2017, (or 60 days after legislative approval): Changes in Active health care applied to new retirees Pre 7/1/22 Premium Share Pre-Medicare POE 0% Premium share goes to 1.5% POS 1.%5 Premium share goes to 3.0% Post 7/1/22 Premium Share Pre-Medicare POE and POS Premium Share goes to 5% Post Medicare (age 65): No Premium Share

Future RHC (Cont.) Reimbursement of Part B Pre 6/30/22 Medicare-covered retirees (65) – NO CHANGE Post 7/1/22 Medicare covered, State reimburses full standard Medicare Part B premium charged by Feds Post 7/1/22 Medicare covered, wealthier retirees (above $85K yearly income), State will full standard, plus half of any extra amount. (See chart for specifics)

Current and Future Retirees Effective 1/1/18 – Medicare Plan design switches to Medicare Advantage vehicle. Implementation of recommended tiering of primary care doctors and specialists – reduces co-pays for high value providers.

Retirement 60 day window to maintain current benefit; Change to retiree medical contribution (1.5% to 3%) for new retirees in effect October 2, 2017: No change for those with more than 25 years of state service; no cost after age 65; Retiree medical contribution 5% for those retiring after 7/1/2022; hazardous duty 3%. No contribution after age 65; Medicare Part B - Additional charge imposed (less reimbursement) on those who claim more than $85,000/year on W2. Disability Retirees must apply for Social Security Disability Insurance (SSDI) – Spouses penalty is removed

What is the return for concessions? 5 year SEBAC extension until June 30, 2027; Job Security (no layoffs) until June 30, 2021; Preservation of benefits you received when you were hired; UConn-AAUP Contract Protection of collective bargaining rights for pension and healthcare until 2027.

Timeline June 13, 2017 – SEBAC Tentative Agreement signed; Collective Bargaining Agreements settled; June 15 - July 17, 2017 – Voting by members July 17, 2017 Tally of votes; Late July, early August – legislative approval of SEBAC TA and contracts