In the remuneration negotiations for 1996-97 the Faculty Association proposed a number of changes in benefits and the Administration proposed capping costs at the 1995-96 level.

The parties have reached full agreement on some issues, and in addition have reached agreement on a procedure which involves dispute resolution to address the remaining issues.

1.  Life Insurance
The Faculty Association and the Administration agree that faculty who retire early shall be permitted to continue to participate in the University's life insurance programme until the end of the month in which they attain the age of 65 by paying the premium defined within the programme on an age-related, smoker/non-smoker basis up to the maximums specified.

The guiding principle is that a member may pay for coverage of less than or equal to the current lump-sum coverage without inclusion of the Survivor Insurance Benefit (SIB).  More specifically the maxima are:

1. 1.75 times annual salary at the time of retirement for those with coverage under the programme introduced in 1993

 
2. one, two or three times annual salary at the time of retirement as currently specified by the member, excluding SIB coverage, for those with coverage under the old programme.  [The current maximum annual salary for insurance purposes is $100,000]

 

2.  Indexation of Pensions
The Faculty Association and the Administration agree that the indexation of pension benefits be amended as follows.

Currently, pensions are increased annually by the lower of (i) CPI increase, or (ii) the income earned on the fixed income part of the pension fund minus 4.5%.  Revenue Canada stipulates that the increase cannot exceed CPI.

Starting on July 1, 1996, if the indexing in a year falls below CPI and there are excess earnings in either of the two following years beyond that needed to provide indexing up to CPI, then the increase in year 2 or 3 may exceed CPI to the extent necessary to redress the "short-fall" in year 1.

In the event that the indexing falls short of CPI in two sequential years and in the third year there are excess earnings (above CPI plus 4.5%), excess earnings shall be applied to the first year of "short-fall" and subsequently (should there still be excess earnings) to the second year of "short-fall" on a compounded basis.

Payments related to "short-fall" from a prior year will start on July 1 concurrently with that on which the full indexing starts.
 

3.  Out-of-Province Medical Insurance for Active Faculty
Out-of-Province medical insurance for active faculty be adjusted based upon recommendations of the Committee currently examining this issue, and that any reductions in the premiums paid by the faculty shall accrue to the faculty member.
 

4.  Fund for Access to Modem Pool
The University will provide in the budget $20,000 to reimburse faculty who incur costs by using the fee-payment modem pool in fulfilling their academic activities.  The method of administering these funds and the maximum allocation per faculty member are to be agreed by the Joint Committee.
 

5.  Other Benefits

A.  Benefits Review Committee and Final Offer Selection
In recognition of the complicated nature of benefits, the Faculty Association and the Administration agree to establish a committee to review and, if appropriate, to recommend changes to benefits:

The Committee shall have available to it an independent expert(s) approved by the Faculty Association and the Administration and directed by both parties.  This expert will be responsible for costing current benefits and proposed changes, and advising both parties on possible benefit changes.  The University shall bear the first $20,000 of the cost, and costs above this amount shall be shared in the ratio 25:75 by the Faculty Association and the Administration.

The committee shall issue an interim report no later than June 30, although both parties agree that, wherever possible, changes should be implemented by July 1, 1996 or as early as possible thereafter.

The review committee will issue a final report September 30, 1996.  In the event of disagreement between the Faculty Association and the Administration the dispute shall be resolved by October 31, 1996 using final offer selection.  Any report of any experts engaged by the committee will not be presented to the selector unless both parties agree.

The Committee shall take into account the following possibilities which are based upon the Administration's proposals and the comments made by the Faculty Association in response to those proposals:

1. out-of-Province coverage for retirees.  Existing monies might be used to more effect through the exploration of a group plan and the use of deductibles.

 
2. Dental benefits.  The committee will examine the reasons for the surplus in the defined contribution portion of our dental plan and whether an adjustment in the level of Administration contributions is possible.  It will also examine the efficacy of some procedures supported within the defined benefit part of the plan, and the use of coinsurance and defined contributions as features of plan design.

 
3. Medical benefits
1. devices and equipment:  the removal of the caps and the introduction of coinsurance may serve the interests of both faculty and the University;

 
2. hospital rooms:  the Faculty Association and the Administration have a mutual interest in ensuring fair charging of such costs by third parties to the benefit plan, but liabilities falling to employees as a result of longer-term stay should be limited;

 
3. credit to flexible spending accounts:  proposals shall take into account the interests of plan members, and protect both the McMaster and other benefit plans from double claims;

 
4. drug dispensing fees:  discussions shall take into account the level of such fees in this area of Ontario;

 
5. drug formulary:  the option of developing a drug formulary for McMaster will be examined.  Any formulary would be developed with appropriate input from experts and would be approved by the Joint Committee.  The formulary would be limited to identifying sets of equivalent drugs and would limit the drug plan liability to the least expensive drug on any such list.  We understand equivalent to mean the same active ingredient and form (pill or liquid).

 
4. Maternity leave.  Proposals regarding the level of remuneration during maternity leave shall take into account the concept of replacement value, tax effectiveness, and government regulations.

 
5. Tuition Waiver/Bursaries.  Without prejudice to the position of other employee groups, the question of the usefulness of the current tuition waiver programme will be examined.  The committee may also want to examine modifications to the bursary plan which would improve the attractiveness of this option.

 
6. Survivor Pension Benefits.  The desirability of making the normal pension entitlement to a 60% joint and survivor form will be examined.

B.  Principles Guiding the Benefit Review Committee
The following shall guide the Benefits Review Committee in its discussions.  However, guidelines shall not be presented to the arbitrator as principles or objectives.  At arbitration, each side shall be free to declare their principles and objectives.

1. The Administration's objective of capping costs at the 1995-96 level.

 
2. The shared objectives of the Faculty Association and Administration that full value for monies allocated to benefits be received; that the benefit plan protect faculty from catastrophic costs and unlimited liabilities; and that the benefit plan provide reasonable and competitive benefits.

 
3. The need of the Faculty Association to consult the retirees on some of these benefit matters.

 
4. That the benefit plans of active and retired faculty may differ from those for other groups of employees.

 
5. The Administration's long term objective of delivering choice of benefits covering to individual faculty with known cost.

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for the Faculty Association	for the McMaster administration
H. Jacek	E. J. E. Szathmary
W. Lewchuk	A. L. Darling
A. L. Robb	H. Weingarten

March 22, 1996