Staff Advisory Council Minutes
May 14, 1998
LaFortune Student Center - Notre Dame Room
1:00 p.m. to 3:00 p.m.
Present: Amy Belke, Debra Bennett, Jan Blazi, Rachel Boyd, Dan Brazo, Phyllis Campbell, Tammy Chapman, Janet Dillon, Debbie Fox, Toby Green, Rita Grontkowski, Mary Anne Hoebeke, Pam Jobin, Jeff Korros, Mike Manijak, Fred Sonneborn, Doris Smuda, Scott Uekert and Diane Schlatterbeck.
Absent: Rhonda Barkley, Emily Cassidy, Victoria Cotton, Gina DeLaruelle, Linda Hansen, Chuck Klein, Norma Mezykowski, Don Newsom, Sue Penrod, Michael Purnell, and Deanna Zukowski.
HR Liaisons: Rich Nugent, Rita Winsor, and Pam Zarazee.
Dan Brazo, Chair called the meeting to order at 1:06 p.m.
I. Approval of Minutes from the April 24, 1998 meeting
Pam Jobin made a motion to accept the April 24, 1998 meeting minutes. Diane Schlatterbeck seconded the motion. A vote was taken and all Council members present were in favor of the motion.
Rich introduced Vivek Kumar, Manager, Retirement Planning; Jane Richard, Benefits Coordinator; and Denise Murphy, Manager, Benefits to the Council. He explained that they are members of the Human Resources Department and are in attendance with the agreement of the Council to listen to Scott Malpass' presentation on How Investments for the Staff Pension Plan are Handled.
II. Review of the Complaint Procedure Form
Rich handed out the revised draft of the Complaint Procedure Form (CPF) including the suggestions that the Council had made at the April 24th meeting. Rich shared with the Council that the new Complaint Procedure for non-exempt staff will begin on July 1, 1998 and further communication will be coming via the StaffNews, campus mailings, the web, etc... A mailing of the new Complaint Procedure along with a copy of the CPF will go out to all Deans, Directors, Department Heads, Chairs, Supervisors in mid June. A separate mailing with a copy of the Complaint Procedure and the CPF will then go to all exempt and non-exempt employees.
Rich reiterated that the new Complaint Procedure was developed as a result of the Grievance Proposal that the Council presented to Rich. The new Complaint Procedure will take the place of the current Problem Solving Procedure. The key to this new procedure is to have a process that an employee can utilize if he/she feels they have not been treated fairly. Human Resources will monitor the process.
III. I.D. Card Update
Rita Winsor shared with the Council that at the present time 700 of the 1300 employees without cards have now received them. Beginning Monday, May 18, 1998 any employee who has not received a photo i.d. card should come to the Department of Human Resources in the Campus Security Building and have their card made. A photo will be taken at that time. Current or temporary i.d. cards will only be good through June 30, 1998 and then a photo i.d. will be required.
Last fall, the University captured approximately 350 out of 1,000 Emeritus, retirees and faculty. The current focus will now be to "capture" the approximately 650 other emeritus, retirees and faculty. The next area of focus will be the production of the affiliate i.d. cards which include C.S.C., WNDU, and Folett. The University will also be discussing the issue of spouses receiving i.d. cards.
Rita shared with the Council that the new Rolfs Sports Recreation Center and the Rockne Memorial are currently able to use the new i.d. cards. Rita explained that in the next 6 to 12 months the primary use of the i.d. cards will be visual. Rita stated that i.d. cards at some future point could be used to enter into buildings, parking lots, and provide debit card capabilities, etc... I.D. cards for students specially say student on the card. Faculty i.d. cards have a blue strip on the bottom of the front side and exempt and non-exempt staff i.d. cards have a gold strip on the bottom of the front side.
An announcement about retiree i.d. cards will be coming in the next couple of weeks about the distribution and obtaining the remaining photos for the i.d. card.
If your new i.d. card is lost or stolen, please call Human Resources between the hours of 8 a.m. and 5 p.m. If your card is lost or stolen
after office hours, please contact the Security Office. There is a fee of $30.00 to replace a lost or stolen i.d. card.
There is communication on the Human Resources Web Page with regard to i.d. cards.
IV. How Investments for the Staff Pension Plan are Handled
Scott C. Malpass, Associate Vice President for Finance & Chief Investment Officer was introduced and welcomed by the Council. Mr. Malpass distributed a packet of information to each Council member and explained to the Council the investment process and policies for the Staff Pension Plan. Mr. Malpass noted that he and his staff from the Investment Office work closely with Fr. Bill Beauchamp and the Investment and Finance Committee of the Board of Trustees in developing and implementing investment policies for the Plan portfolio as well as for the endowment fund, working capital pool, and all other financial assets of the University. The Investment Office includes
six investment professionals who work with Mr. Malpass in developing investment strategy and asset allocation guidelines and in selecting and monitoring investment managers for the Plan. In addition, the Investment Office includes operations staff who oversee the investment accounting, performance measurement, and systems activities in the office.
The management of the Plan is guided by the ERISA Act of 1974 and has a well defined investment policy statement that guides investment activities in the fund. The Trustees of the Plan are the Trustees of the University who have fiduciary responsibility for all Plan investments. The current market value of the Plan is some $64 million. Mr. Malpass explained that the Plan has experienced rapid growth in the past several years as a result of the bull market that began in 1983, with few interruptions, and which has seen stock market returns in excess of 20% for three years in a row now. Mr. Malpass also explained that these returns are well above what is sustainable over the long haul and that the U.S. stock market is high on a valuation basis at this time. Diversification in investing is important precisely because one can not predict which investments will do well during a particular time period.
Scott discussed the asset allocation of the Plan noting the targets of 45% in U.S. Equities (Large-Cap); 5% U.S. Equities - Small -Cap.; 10% International Equities; 30% U.S./international bonds; and 10% special situations, which includes private capital investments, REITS, etc. The returns the Plan has achieved of some 30.4% for one year ended 3/31/98; 21.2% for 3 years; and 14.8% for 5 years are well above the actuarially assumed rate of return of 8% and have also beaten the pension policy portfolio during these time periods. Scott noted once again that such returns are high historically and are expected to moderate somewhat in the coming years.
Scott discussed the individual managers that have been retained to manage portfolios for the Plan and how these managers are selected. He noted that the selection criteria for investment firms includes the following: investment philosophy; track record; key personnel and their experience and credentials; the organizational structure, research capability; and stability of the firm; and the firm's financial and ethical viability. Each portfolio is also assigned a specific benchmark that they are expected to beat over the course of a market cycle - usually a four or five year period. If they do not beat the benchmark or if other problems arise with the firm, they are a candidate for termination by the Board of Trustees.
The Plan's strong performance was a major reason the employee contribution was eliminated in 1997. In addition, retirees were given a pension increase in 1995 and it was noted that the payout formula for pensions for non-exempt staff was enriched in 1989.
Scott reviewed the investment objectives and return objectives for the Plan noting that the fund objectives include:
* preserving the purchasing power of assets over the long term
* providing beneficiary payment
* earning a competitive return at lower risk
The allocation objectives include:
* the long time horizon favors equities for long term growth
* diversification provides for more consistent returns over time
* flexibility to move within tactical ranges to respond to changing market conditions.
The return objectives include:
* outperforming the absolute 8% actuarially determined rate of return
* earning inflation plus 5% over the long term
* exceed the policy portfolio composite of passive indices
* return objectives are to be met over 3 to 5 year periods.
Scott stated that he is very proud of the people in the Investment office and that they love Notre Dame and certainly enjoy being here.
Scott fielded some questions that the Council had about the Staff Pension Plan. The question was asked if the University would foresee a pension increase. Scott reiterated that the pension plan was improved in 1989 by an enriched formula and in 1997 with the elimination of the staff contribution to the pension plan. Rich Nugent stated that at this time it is unlikely that the staff pension plan formula will be increased due to the very competitive formula it currently has. The Staff Pension Plan is a defined benefit plan which means it is guaranteed. Rita Winsor shared with the Council that an adjustment was given to Notre Dame retirees in 1995 an increase in their pension of $2 per month multiplied by their years of service with Notre Dame. This is unusual in most organizations to give an increase to current retirees. The Human Resources Department and the Investment area work with an actuary each year to look at issues and
process valuation analysis regarding the pension plan. The Supplemental Retirement Account (SRA) is a voluntary plan for all staff to participate. Over the last year nearly 400 Notre Dame employees started SRA's, the majority because of the elimination of the required contribution to the Staff Pension Plan.
Scott offered to come back to the Council on a yearly basis to give an update on the Staff Pension Plan.
The Council thanked Scott for attending and presenting information regarding the Staff Pension Plan.
V. Ad-Hoc Tuition Benefits Proposal
Scott Uekert introduced Lori Butchko to the Council. Lori is a non-exempt, Office Assistant in the Management office of the College of
Business Administration. Lori also was an original member of the Staff Advisory Council. Scott also stated that the Ad-Hoc Tuition Benefit Committee included Diane Schlatterbeck and Don Newsom, Staff Advisory Council members and Donnie Love, non-exempt, Guest Service Associate at the Morris Inn.
Lori asked the Council if they had any questions and then the Council began discussing the proposal. The proposal is for current Notre Dame employees. A few changes were suggested by the Council. Toby Green made a motion to accept the proposal with the recommended changes. Phyllis Campbell seconded the motion. A vote was taken and all present Council members were in favor.
Rich Nugent asked Scott to send him a copy of the final proposal so that he can take it to the administration for consideration.
VI. Ad-hoc Women's Committee Update
Rita Grontkowski shared with the Council that the committee would be co-sponsoring a Communication training session presented by the Michiana Employee Assistance Program. The schedule is currently being worked on and the program will be offered once each day on June 17th, 18th, 24th and 25th. Information will be forthcoming via the StaffNews and individual flyers.
Rita also asked for a Council member to replace Linda Hansen on the Ad-Hoc Women's Committee. Mary Anne Hoebeke volunteered to replace Linda.
V. Set agenda for the June 11, 1998 meeting
Dan stated that the tentative agenda for the regularly scheduled June 11, 1998 meeting is as follows:
I. Approval of Minutes from the May 14, 1998 meeting
II. Discuss issues with the Promotion & Transfer Process
III. Set the agenda for the July 9, 1998 meeting
Linda Dunn, Photographer will be at the June 11, 1998 Council meeting to take an updated photo of the Council. The June 11, 1998 Council meeting will begin at 1:30 p.m. due to the Staff Picnic at the Stepan Center from 11 a.m. to 1 p.m. on this day.
Rich asked the Council for its agreement to bring the necessary individuals from Human Resources that would benefit from hearing the issues involved with Promotion & Transfer process. The Council had no problems with Rich's request.
Deb Fox made a motion to adjourn the meeting at 3:00 p.m. Jeff Korros seconded this motion. A vote was taken and all Council members present were in favor.