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Spokane, Washington  Est. May 19, 1883

UI retirees may face cuts in benefits

Associated Press

MOSCOW, Idaho – A reduction in benefits for current and future retirees could be part of the budget-balancing package being put together by the University of Idaho.

Although no decision has been made, President Tim White said spiraling health-care costs and changes in federal accounting procedures will hit the university hard if costs are not cut.

“We’re looking at what’s costing us and what’s generating revenue,” White said. “We’re going to evaluate what sort of options we have, and we’re going to do an analysis.”

Even a modest co-payment for some benefits or services would have a major effect on the overall financial viability of the university, he said.

The federally mandated accounting change will require future retiree benefits to be listed as liabilities beginning in mid-2006, which will increase the value of obligations the school carries on its books, White said.

The school currently pays about $5 million annually in retirement benefits, but the accounting change adding in future costs would increase the long-term obligation to as much as $300 million.

“It’s a huge accounting liability,” White said. “We have to have resources on hand to balance that.”

White reiterated past statements that there will be reductions but again emphasized that there has been no decision on what benefits will be affected. He said a team of faculty, staff and retirees will review the situation and make its recommendations next spring.

“We need to figure out how, within federal laws and our obligations to employees, we will navigate through this,” White said.

The possibility of retirement benefit cuts was first broached by White earlier this month at a retirees meeting, and Wileen Anderson, 57, who just recently retired, said she and many others might not have accepted early retirement packages if they had known cuts were likely.

“If these benefits were taken away, there are some people who could not have retired,” Anderson said. “Now the university is saying, ‘We got you out of here, but we are taking a look at what got you out of here.’ “

Anderson said many retirees live on fixed incomes and cannot afford annual co-payments or insurance premiums as White has suggested might occur.

“He said it’s going to get more expensive for the university,” Anderson said. “We all understand that. On the other hand, we were promised these benefits.”