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in deferred compensation 401(k) and 457 defined contri- bution plans. these plans are available as supplemental plans to the basic retirement benefits of the systems and as a primary retirement plan for some tier 2 Public em- ployee system participants. under certain irs and plan restrictions, employees can make additional contributions. employer contributions may be made into the plans at rates determined by the employers and according to utah code title 49. the defined contribution Plans account

balances are fully vested to the participants at the time of deposit except for tier 2 required employer contribu- tions and associated earnings during the first four years of employment.

for employees participating in defined benefit plans, the university is also required to contribute 1.5-1.78 per- cent of the employee’s salary into a 401(k)/457 plan. for employees who choose to participate in the tier 2 Public employee – defined contribution plan, the university is required to contribute 20.05 percent of the employees’ salary of which 10 percent is paid into a 401(k)/457 plan while the remainder is contributed to the tier 1 con- tributory Public employee system, as required by law. employer and employee contributions to the 401(k)/457 plans for fiscal years ending June 30 were as follows:

(figure K.10)

FIguRE K.10 _{401(k), tieR 2 dC, And 457 PLAnS}

2015 2014 2013 university’s contributions $975,473 $769,297 $671,526 employee’s contributions $1,107,326 $957,746 $911,530 FIguRE K.9 PRoPoRtionAte SHARe oF net PenSion (ASSet)/LiABiLitY 1% deCReASe 6.50% diSCoUnt RAte 7.50% 1% inCReASe 8.50% contributory system $1,172,512 $139,755 ($733,786) noncontributory system 72,714,511 36,497,130 6,165,011

Public safety system 1,177,978 636,495 190,349

tier 2 Public employees system 340,419 (46,288) (337,880)

Utah State University | FY 2015 | Notes to Financial Statements

50

emia provides a 401(k) defined contribution plan that can be utilized by employees on the utah retirement state and school system – noncontributory plan. this contribution is in lieu of the 1.5 percent that would have been contributed to the utah retirement system’s 401(k) plan. the contri-

tiaa-cref and/or fidelity provide individual defined con- tribution retirement fund contracts with each participating employee. employees may allocate contributions by the university to any or all of the providers and the contracts become vested at the time the contribution is made. em- ployees are eligible to participate from the date of employ- ment and are not required to contribute to the fund. bene- fits provided to retired employees are based on the value of

L. Termination

Benefits

the university provides an early retirement option to em- ployees who qualify and are approved by administration in accordance with university policy. this option is available to all employees whose accumulated age and years of service are equal to or greater than 75, that have met the minimum age requirements, and where early retirement is in the mu- tual best interest of the employee and the university. the policy provides two mutually exclusive early retirement options for eligible employees; either six years (16.67 percent

bution made by the university is at 1.5 percent of gross earnings. contributions by the university become vested at the time the contribution is made. contributions for fiscal years ending June 30 were as follows: (figure K.11)

individual contracts and the estimated life expectancy of the employee at retirement. the university’s contribution to this multiple employer defined contribution plan was 14.2 percent (12.25% for post retirees) of the employees’ annual salary. the university has no further liability once annual contributions are made. contributions for fiscal years ending June 30 were as follows:

(figure K.12)

of base salary per year) or five years (20 percent of base salary per year). the six-year option requires a minimum age of 56 and the five-year option requires a minimum age of 57. benefits include a monthly stipend equal to the agreed upon percent of the retiree’s salary at the time of active employ- ment along with medical and dental insurance.

the projected future cost of these stipends and the medical and dental insurance benefits have been calculated based on the known amount to be paid out in the next fiscal year plus projected increases of 0.65 percent (university), 3 percent (usurf) for stipends and 6.45 to 10.20 percent (universi- ty), 9 percent (usurf) for medical and dental premiums. these increases are based on historical data. the premiums for medical and dental benefits have also been increased FIguRE K.12

tiAA-CReF And/oR FideLitY

2015 2014 2013

university’s contributions $25,156,952 $24,490,208 $23,682,706

employee’s contributions $7,341,882 $6,704,498 $6,184,720

FIguRE K.11

edUCAtoRS mUtUAL inSURAnCe ASSoCiAtion 401(k)

2015 2014 2013

university’s contributions $18,904 $19,896 $21,200

Utah State University | FY 2015 | Notes to Financial Statements

51

by an age-adjusted factor of 2.89. the net present value of the total projected costs is calculated using the estimat- ed yield (2.945%) for university investments in the cash management investment Pool and (4.17%) for usurf. the net present value is the amount recognized on the financial statements as the liability for early retirement.

at June 30, 2015, there were 110 participants in the early retirement program. the program is funded on a pay- as-you-go basis from current funds. Payments for the program for fiscal years ending June 30 were as follows:

(figure L.1)

M. Risk

Management

General Liability Insurance

the university maintains insurance coverage for general, automobile, personal injury, errors and omissions, employ- ee dishonesty, and malpractice liability up to $10 million per occurrence through policies administered by the utah state risk management fund. the university also insures its buildings, including those under construction, and contents against all insurable risks of direct physical loss or damage with the utah state risk management fund. this all-risk insurance coverage provides for repair or replacement of damaged property at a replacement cost basis subject to a deductible of $1,000 per occurrence. all revenues from university operations, rental income for its residence halls, and tuition are insured against loss due to business inter- ruption caused by fire or other insurable perils with the utah state risk management fund. all university employees are

covered by worker’s compensation insurance, including employer’s liability coverage by the worker’s compensa- tion fund of utah.

Self-Insurance for Employee

Health and Dental Care

the university has a self-insurance fund for employee health and dental care. in addition, the university has pur- chased a stop-loss insurance policy to cover specific par- ticipant claims exceeding $400,000 per term and aggre- gate claims exceeding 125 percent of expected claims up to $10 million. gasb statement no. 10 requires a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements. the estimated claims liability is based upon past experience adjusted for current trends. the estimate reflects the ultimate cost of settling the claims. the uni- versity’s estimated self-insurance claims liability at June 30, 2015, and June 30, 2014, were as follows:

(figure m.1)

FIguRE L.1 _{eARLY RetiRement PAYmentS}

2015 2014 2013

stipends $1,321,632 $1,748,648 $1,737,496

insurance benefits $929,738 $1,292,698 $1,264,885

FIguRE M.1 _{2015 2014}

estimated claims liability at beginning of year $5,477,587 $4,858,401

current year claims and changes in estimates 43,222,134 41,835,094

claim payments, including related legal and

administrative expenses (43,609,485) (41,215,908)