Repository: UIHistories Project: Board of Trustees Minutes - 1964 [PAGE 1258]

EXTRACTED TEXT FROM PAGE:

1964]

UNIVERSITY OF ILLINOIS

1213

Champaign Senate Committee on Retirement, Hospitalization, and Insurance, at the request of the University administration, studied the problem of establishing criteria for the selection and approval of insurance companies which the Board of Trustees could consider in offering to acquire annuities for staff members, and has recommended the following set of standards (a copy of his report has previously been submitted to the Finance Committee): 1. The company must have had at least $750 million of life insurance in force in Illinois as of December 31, 1962. 2. The company must have collected at least $20 million of premium in Illinois during 1962. 3. The company must have a net yield on investment in excess of the average for the industry in each of the years 1960 through 1962. 4. The company must be willing to work closely with the University in product design. Four companies meet these standards. Prudential Insurance Company of America and Continental Assurance Company offer group contracts. The Northwestern Mutual Life Insurance Company and the Massachusetts Mutual Life Insurance Company offer individual contracts in addition to these four. Dr. Mehr recommends that the Teachers' Insurance Annuity Association also be approved for individual contracts serviced by mail. This company was organized by the Carnegie Foundation for the Advancement of Teaching, but is now a separate entity and is now self-sustaining. It operates a companion, but separate, corporation, the College Retirement Equities Fund. Eligibility for insurance and annuities in the Association is limited to employees of colleges, universities, independent schools, and other non-profit, tax-exempt educational and scientific organizations that meet the T I A A requirements. Currently, over 1,200 organizations are cooperating with T I A A , of which approximately one-half are colleges and universities. Because of its efficient operations, and designation as an insurance carrier for college faculty members, a number of University of Illinois faculty presently own TIAA contracts purchased for them by other institutions. It would be to their advantage, in some cases, to continue this relationship, rather than to start a new contract with a new company. Accordingly, Dr. Mehr recommends approval of T I A A - C R E F as the fifth company authorized to do business under this arrangement. Obviously, the University can not do business with all insurance companies. Some restriction is necessary. The smaller the number of insurance companies involved, the more effective can be the liaison between the University, the insurance company, and the staff member. Application of the standards recommended results in only five companies being approved, but it is believed that within these five companies, sufficient variation of programs is available to serve the needs of the faculty. The Salary or Annuity program has been presented to and discussed with the Senate Committee on Retirement, Hospitalization, and Insurance on each campus and the Employees Advisory Committee to the Board of Trustees of the State Universities Retirement System. The Finance Committee recommends the adoption of the following rules by the Board of Trustees as contemplated by the Illinois statute, and further recommends that the appropriate University officials be authorized to publicize and implement the same. Rules Adopted by the Board of T r u s t e e s of the University of Illinois to Implement Provisions of Illinois Revised Statutes, Chapter 127, Section 166(c) 1. Any employee of the University who is a participant in the State Universities Retirement System and who desires to make an election to accept an adjustment in earnings pursuant to Section 166(c) of Chapter 127 of the Illinois Revised Statutes shall do so by executing and filing with the University a document in a form approved by the Vice-President and Comptroller and by the Legal Counsel. In the event that more than one such election is filed by an employee, the election bearing the latest date shall be deemed to supersede all previous elections, but no employee may file more than one election in any calendar year. Any such election