Repository: UIHistories Project: Board of Trustees Minutes - 1942 [PAGE 819]

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8i6

BOARD OF TRUSTEES

[March 10

On either basis this leaves the Association with a very small reserve, especially in view of the uncertainty of financial results for next year. It raises the question as to whether the Board of Directors should not be asked to review its situation again and make a further effort to reduce expenditures for the remainder of the year. "The Association has, it is true, certain other assets. It has an accumulated reserve of $13,500 for plant maintenance and replacement. It owns stock in the First National Bank of Champaign at a par value of $8,600 which could probably be disposed of at not less than par if that became necessary. Neither one of these items is included in the estimated surplus stated above. " T h e Association also owns annuity policies providing for retirement annuities for members of its staff, having a cash surrender value of $94,272. Loans could be made against these policies and they could be surrendered for cash but obviously this should not be contemplated or done except in the most extreme emergency." I am bringing this to the attention of the Board for its information.

On motion of Mr. Davis, this matter was referred to the Committee on Athletics for study and recommendation.

APPORTIONMENT OF EMPLOYER CONTRIBUTIONS TO THE UNIVERSITY RETIREMENT SYSTEM OF ILLINOIS (20) T h e act covering the University Retirement System of Illinois provides (Sec. 7.8) that " T h e contributions of the State of Illinois provided for herein shall be payable from appropriations made to the Employers subject to this Act which may be lawfully expended for such purposes." Consequently it is necessary for each institution or agency subject to the act to pay to the Retirement System the amount representing the cost of the benefits provided for its staff for each fiscal year. F o r the current fiscal year there will be no charge for annuities against state funds, since no one may retire under the System before September 1, 1942, and annuities paid from state funds are provided only on a pay-as-you-go basis. However, since some institutions have funds other than state funds, it will be necessary to compute the total charge so that such institutions may make a proper allocation against non-state funds. T h e total expense of administration for the current biennium is included in an appropriation to the University of Illinois and this item would not be included in the total charges for the present biennium. Due to the fact that no benefits of the System accrue to members of the staff of the state scientific surveys during the current biennium, no charges will be made against these agencies during that period. T h e Retirement Board has considered with the consulting actuary and the Comptroller of the System the methods of apportioning these costs, and submits the following procedure which has been adopted by the Retirement Board and in which the concurrence of the Board of Trustees of the University of Illinois is requested. In substance, this procedure provides that each institution or agency be billed for the estimated costs of the following items: ( a ) Death benefits in excess of amounts provided by employee contributions and earnings. (b) Disability benefits. ( c ) Annuities for service prior to September I, 1941. ( d ) Annuities for service since September 1, 1941, representing an amount equal to twice the annuity provided by employee contributions. T h e amounts to be billed against each institution and agency will be determined from an actuarial study of total present participants in the System. This study is being made by the actuary, and bills will be rendered as soon as it is completed and as soon as all boards which are concerned have accepted the plan.

On motion of Mr. Jensen, the Board concurred in this apportionment plan.