Employee benefit and retirement FAQ

The budget repair bill has raised many questions for UW-Madison. UW System Administration Human Resources and UW-Madison\’s Office of Human Resources are both attempting to answer questions and explain benefit and retirement implications for all employee classes.

The information will be updated as available. View the full post for UW-Madison specific questions and answers. If you have additional questions, ask your HR rep, or email budget@uc.wisc.edu.

UW System – Addresses Retirement & Benefit Implications

Visit the System Human Resources site

Frequently Asked Questions Regarding Expiration of Classified Staff Collective Bargaining Agreements

February 17, 2011

On February 11, 2011, the Wisconsin Office of State Employment Relations (OSER) issued a notice to all unions that it intends to cancel state contract extensions covering state employees in all bargaining units on March 13, 2011.

This news affects thousands of UW-Madison employees, in addition to thousands more around the state. Understandably, this has resulted in many questions about wages, benefits and job security of those employees whose contracts are set to expire.

The answers below are intended to provide clarity to a number of common questions that have been received over the past several days. Questions and answers will be updated as additional facts become known.

Q: Will I have any rights after the expiration of the collective bargaining agreement extensions on March 13?

A: Yes. After March 13, represented classified employees will be covered by the Wisconsin Civil Service System (Wis. Stat. 230). Many of the rights outlined in the collective bargaining agreements exist for all public employees because they are covered by civil service rules. Wisconsin civil service rules provide employees with the right to appeal what they believe to be unjust actions. Employees have the right to file complaints and grievances on a range of issues, including working conditions. Many of the rights outlined in the collective bargaining agreements also exist in the Wisconsin Civil Service rules, such as:

  • The right to a workplace free of harassment and discrimination
  • The right to due process prior to discipline
  • Grievance and appeal rights
  • Processes for hiring, transfers and promotions
  • Certain layoff protections
  • Just cause standards for disciplinary actions

Q: How is compensation going to be affected after the collective bargaining agreement extensions expire on March 13?

A: The OSER director has the discretion to continue to administer those provisions of the collective bargaining agreements that the director determines necessary for the orderly administration of the state civil services system. Accordingly, OSER has stated that the existing compensation plan for represented employees will continue until the end of this fiscal year. Compensation plans for represented employees under the proposed budget repair bill will be implemented for the 2011-2013 biennium budget. OSER will be issuing a directive in regards to this area in the coming days.

Q: How is my compensation going to be affected as a result of Budget Repair Bill 111.70?

UW System is maintaining a website that addresses the effect of the Budget Repair Bill on benefits and compensation, including a calculator that estimates for employees the additional cost for health insurance and retirement benefits.

If the proposed Budget Repair Bill is implemented, UW-Madison will no longer collect Union dues.

Retirement and Insurance modifications will also affect total compensation. All UW-Madison employees will contribute 5.8% of their salary towards their Wisconsin Retirement System. Additionally, all UW-Madison employees participating in an employer-provided insurance program will see an increase to at least 12% of their total health insurance premium contribution.

Q: How does the Budget Repair Bill and the expiration of the Collective Bargaining Agreement extensions affect my eligibility for Supplemental Health Insurance Conversion Credits (SHICC), commonly referred to as the “sick leave doubler”?

A: OSER has provided the following guidance: “Assuming that the Budget Repair Bill passes as initially proposed, eligibility for SHICC will continue for at least the remainder of the 2009-2011 biennium under the OSER Director’s discretion to continue certain provisions of the former collective bargaining agreements. Thereafter, all provisions for represented employees – other than base pay rates, which continue to be negotiable – will be governed by the Compensation Plan covering represented employees, applicable statutes, or administrative code.”

Q: As a result of the expiration of the collective bargaining agreement extensions and the changes included in the Governor’s Budget Repair Bill, do the previously agreed upon furlough days remain in effect?

A: Yes. The furlough days included in memoranda of understanding attached to several collective bargaining agreements remain in effect after the expiration of the collective bargaining agreement extensions. Gov. Walker’s staff confirms that the Budget Repair Bill will contain no additional furlough requirement for the remainder of FY 2011, but furlough requirements already included in the 2009-2011 biennial budget remain in effect through the end of June. His staff confirmed that he does not intend to include any furloughs in his 2011-2013 biennial budget — no new furloughs and no continuation of the 2009-2011 furloughs.

Q: Does the University intend to deny all vacation requests after the budget bill is signed?

A: No. Vacation requests continue to be reviewed and approved according to normal unit procedure and protocol.

TA/PA Collective Bargaining Implications

Feb. 18, 2011

On Feb. 11, 2011, the Wisconsin Office of State Employment Relations (OSER) issued a notice to all unions that it intends to cancel state contract extensions covering state employees in all bargaining units on March 13, 2011.

Separate from the decision to cancel the extension of the contract, the governor has introduced a budget repair bill that, if enacted, will affect teaching assistants and project assistants in many ways.

Understandably, these actions have raised many questions about wages, benefits and other terms of the contract.

This document is intended to provide clarity to a number of common questions that have been received over the past several days. This document will be updated as additional information is available. While the decision to cancel state contract extensions has been made and will be effective March 13, the budget repair bill has NOT been enacted. The answers provided are based on the budget repair bill as it stands as of Feb. 17. It may be changed as it goes thought the normal legislative process. As a result, the answers may change. We will update the site to reflect any changes as they are released.

Q: What is the status of the terms in the contract as of March 13, 2011?

A: The contract will no longer exist. Consequently, the terms are not binding on either the TAA or the university. The university, however, intends to continue to act in ways that are consistent with what is in the contract.

Q: Can the university agree to extend the terms of the contract?

A: No. Under state law, the collective bargaining relationship is between the TAA and the state. The university has no authority to reach an agreement with the TAA.

Q: Will TAs and PAs continue to receive tuition remissions?

A: Yes. Tuition remission is provided by Wisconsin statute and university policy. Tuition remissions are critical for the university to attract and retain world-class graduate students.

Q: Will PA and TA pay rates be affected on March 13?

A: No. The TA/PA pay rates will remain the same.

Q: How are TA/PA benefits going to be affected if the budget repair bill is enacted.?

A: The only benefit affected is health insurance. The governor’s budget repair bill would increase the graduate assistant premiums to half of what most permanent state employees would pay (see table below).

Impact of Budget Repair Bill on Monthly
Health Insurance Premiums for Graduate Assistants
Tier 1 Plans Current Monthly Premium Paid by Grad Asst
(% of Total Premium)
Proposed Monthly Premium Paid by Grad Asst*
(% of Total Premium)
Proposed Monthly Premium Paid by Employer Total Monthly Premium**
TAs and PAs
Single Coverage
$15.50
(3.9%)
$42.00
(10.5%)
$357.30 $399.30
TAs and PAs
Family Coverage
$39.00
(3.9%)
$104.00
(10.5%)
$890.40 $994.40
Other Graduate Assistants (RAs, Fellows, etc)
Single Coverage
$18.00
(4.5%)
$42.00
(10.5%)
$357.30 $399.30
Other Graduate Assistants
(RAs, Fellows, etc) Family Coverage
$44.50
(4.5%)
$104.00
(10.5%)
$890.40 $994.40

* The budget repair bill would require graduate assistants to pay half the premium that employees covered by the Wisconsin Retirement System are required to pay.

** Uses 2011 Group Health Cooperative-South Central WI (GHC-SW) premiums.  Using one of the other three Dane County plans would change the “% of Total Premium” results by ~two- to three-tenths percentage points.

Q: Will TAs and PAs be required to continue to pay union dues?

A: No. Under the bill, employees would not be required to pay union dues. The bill also prohibits employers from collecting voluntary dues through payroll deduction for the union.

Additional UW-Madison employee benefit and retirement FAQ

The following information is drawn from questions posed this week by UW-Madison staff:

Q: Would you support a formula that bases an employee’s health insurance premium contribution on their salary?

A: Basing group health insurance premiums on an employee’s salary would make the cost more manageable for the university’s lower-compensated employees. This concept was not part of the governor’s budget repair bill, but it is unclear what the final legislation will include or what may be considered in the future. We intend to share employees’ input with the state agencies that develop and administer the health insurance program.

Q:  Will the increased employee contributions towards health insurance premiums and pension benefits reduce the fringe benefit rates charged to sponsored projects?

A:  In the near term (through 6/30/2012), the answer is “no”; longer term (beginning 7/1/2012), the answer is “possibly”.

The fringe benefit rates that are charged to grants are set through a negotiation process with the Federal government.  The Dallas office of DHHS, the same people with whom we negotiate our F&A rate, follow a process that is used across the country with research universities.

At UW-Madison, all actual costs of fringe benefits for people paid on sponsored projects are charged to a central pool account.  Sponsored projects are charged an allocated rate which represents the total actual fringe costs in the pool account divided by the total actual salaries of all employees represented in the same fringe pool account (e.g.,  Faculty & Academic staff, Classified hourly, Research Assistants, etc.)

The fringe benefit negotiation occurs annually and is based on fairly elaborate data the University provides.  The data to determine the fringe allocation rates include actual fringe costs from the previous year as well as a provision for carry-forward adjustments resulting from over-recovery or under-recovery in the previous two years.  For example, our recently proposed rates for FY2012 (starting 7/1/2011) were based on charges from FY 2010 (7/1/2009-6/30/2010), but there were also carry-forward adjustments going back to 2008.

Because of this process, the effects of the reduced employer costs for fringes will not show up in a reduced fringe rate for our employees until FY2013 (beginning 7/1/ 2012) at the earliest. The reduction could be partially offset by a carry-forward from 2009 or 2010 as well as any increases in the actual costs of the fringe components (e.g., health insurance premiums, pensions, etc.).  It’s an incredibly esoteric process, but it is the standard treatment for fringes.  It means the fringe benefit rates for any given year are actually based on actual charges accrued in prior years.  In the short-run, the process may appear to create inequities, but over time they are corrected.

Q: Wouldn’t the state save the same amount of money by decreasing its own contribution to state workers pension plans (instead of requiring the employees contribute 5.8 percent of their salaries)?

A: Under state law both the employee-required and employer-required contributions to the Wisconsin Retirement System have been mandatory for eligible participants for some time. Eliminating the employer contributions to the WRS would definitely reduce the state budget. However, future retirement benefits are funded based on maintaining both types of contributions. Elimination of the employer contributions would ultimately result in reduced retirement benefits.

Q: Why not make employee contributions to the Wisconsin Retirement System voluntary?

A: Making the employee contributions voluntary is not part of the governor’s budget repair bill. The issue will certainly be included in the WRS study required by the governor’s budget repair bill to be conducted by the Office of State Employment Relations and Department of Employee Trust Funds.

Q: What would be included in the health risk assessment required by the governor’s budget repair bill?

A: UW benefits experts are researching the issue. We expect that the Health risk assessments will be included in the health insurance study required by the governor’s budget repair bill to be conducted by the Office of State Employment Relations and Department of Employee Trust Funds. As more information on this and other issues is available, it will be shared with employees.

Q: Why would workers supported by federal grants rather than state funds be subject to the same benefit cost increases as state-funded employees?

A: Distinctions between funding sources were raised a few years ago when furloughs were implemented. At the time, the university broached the idea of excluding workers supported by funds outside the state budget, but the governor expected all employees to receive the same treatment. Whether there could be any flexibility in upcoming employee benefit cost increases is unknown. Also it is unclear whether granting agencies would allow grants to pay for benefits that other university employees must pay for themselves.

Q: My question relates to non-represented personnel.  The FAQ document refers to “Classified Staff” and “represented employees.” I am a member of the Academic Staff and my understanding is that I am considered as “non-represented staff.”  How is my right to the Supplemental sick leave credit program impacted by the budget repair bill?

A: The Supplemental Health Insurance Conversion Credit program (SHICC) program provides employees, with at least 15 years of service, supplementary sick leave credits to be used to pay for health insurance premiums after retirement. Academic staff, faculty, and non-represented classified employees are eligible for SHICC under the state Compensation Plan.

The Compensation Plan is reviewed and updated by the Office of State Employment Relations (OSER) every two years as part of the state budget process.  While revisions can be recommended to the legislative Joint Committee on Employment Relations (JCOER) at any time, OSER has issued a statement* that there will be no changes to the supplemental sick leave credit program through at least June 30, 2011.

The budget repair bill, as currently written, requires OSER and the Department of Employee Trust Funds (ETF) to study the Wisconsin Retirement System, including “modifying the supplemental health insurance premium credit program” and report their findings to the governor no later than June 30, 2012. This suggests, but does not guarantee, that the SHICC program will continue beyond June 30, 2011.  However, at this time it is unknown if there will be any changes to the program after June 30, 2011 either through the 2011-13 budget bill or through any other means.

Please continue to check this site and the UW System website for further information. Email the Office of Human Resources with questions: benefits@ohr.wisc.edu.