Retiree Healthcare Benefits

January 4, 2012

Michael E. Finn, CFO

• Phase out over the next two years– Transition existing retirees to ASRS• ASRS currently utilizes UHC network• Financial impact

– Employees who retire before June 30, 2013 would still be able to retire with full benefits if criteria set forth in Governing Board Policy is met

Retiree Healthcare Benefits

3

• Grandfathered Recommendation– 75% offset to those with 25 years or more of

continuous service prior to June 30, 2014– 50% offset to those with 25 years or more of

continuous service prior to June 30, 2015– 25% offset to those with 25 years of continuous

service prior to June 30, 2016

Recommended Transition Option

4

Current Employee Years of Service

15 yr 16 yr 17 yr 18 yr 19 yr 20 yr 21 yr 22 yr 23 yr 24 yr 25 yr 26 yr 27 yr 28 yr 29 yr 30+ yr0

20

40

60

80

100

120

62

4536

47 45

26 22 2534

29 30

1120

7 7 5

46

33

17

23

15

9 1317

6 13 8

7

5

0 32

1

8

6

3

2

3 4

53

6

3

1

0

01

2

AdminClassifiedCertified

5

Existing Retiree Demographics

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

Age

0 10 20 30 40 50 60

6

Current and Future Point Projections

2011 20130

50

100

150

200

250

300

350

400

450

149

293

84

101

78 Points80 Points

7

Demographics of 2013 Projected Retirees

Age

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

0 5 10 15 20 25 30 35 40

8

Retiree Medical Benefits Cash Flow Projections (As Presented in Study Session)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 $-

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

$3,500,000.00

$4,000,000.00

$4,500,000.00

$5,000,000.00

$4,755,579.00

$4,117,143.00

$3,153,720.00

$2,249,910.00

$1,621,089.00

$1,161,492.00

$682,665.00

$528,825.00

**Assumes all eligible employees retire to ensure coverage**

DISCUSSION AND QUESTIONS