Office of the Vice President for Global Communications

Friday, January 20, 2012

U-M saves more than $400 million through benefits initiatives

U-M will have accumulated savings of almost $400 million since 2003 due to a wide-ranging set of benefits initiatives, Tim Slottow, executive vice president and chief financial officer, said during Thursday's Board of Regents meeting.

About 65 percent of the savings comes from greater cost sharing of health benefits on the part of employees, though Slottow noted that U-M remains competitive with peers on benefits.

Slottow said university leaders didn't want to rely exclusively on shifting such expenses to employees, so they took a more comprehensive approach that included drug pricing discounts, a one-year waiting period for new employees to receive university contributions toward their retirement savings accounts, and reductions in administrative fees paid by the university.

"All of the coordinated efforts amounted to a savings of almost $400 million since 2003, and ongoing savings of $94 million a year," he said. "This has taken a phenomenal amount of work to achieve. There's been good, solid blocking and tackling on our part to achieve these savings."