posted on August 3: Long term disability premiums increase 49 per cent


Simon Ouellet, human resources director of benefits, compensation & staffing, sent the following e-mail Thursday afternoon to members of the McMaster University Staff Association, the McMaster University Faculty Association (except clinical faculty) and The Management Group:

McMaster University's long term disability (LTD) plan is an income protection scheme that provides financial protection to
employees who become totally disabled as a result of non-work related illnesses or injuries. Employees are responsible for 100 per cent
of the premiums for this benefit plan, which is provided through Sun Life of Canada. Participation in the LTD plan is mandatory
for eligible faculty and staff members with more than 12 months continuous service.

LTD premiums have not increased since 1997; however, during this same period of time employee utilization of the LTD plan has
dramatically increased. As a result, we have been advised by Sun Life of a 49 per cent increase in LTD premiums effective July 1, 2001.

Meetings have been held with representatives of MUFA, TMG and MUSA to discuss the LTD premium increase. While it has
been determined that an LTD premium increase is unavoidable, it has been agreed that the premium increase will be absorbed by
LTD reserve funds for the months of July and August, 2001.

The 49 per cent increase in LTD premiums will be implemented effective Sept. 1, 2001. LTD plan participants should note
that their pay on Sept. 15, 2001 will reflect this premium increase. For an employee earning $40,000 annually, this means the
LTD deduction will increase from $25.20 to $38.09 per month.

In recognition of the increased utilization of the LTD plan, Human Resources, in cooperation with all employee groups, is
responding with a new disability management initiative to be unveiled this fall. The goal of this initiative is early reporting and
intervention in order to minimize or avoid LTD claims.

Human Resources is also working with Student Health Service and
Athletics & Recreation on a employee health and wellness initiative designed to provide effective health promotion and disease
prevention for all employees. We hope that these initiatives will help control future LTD costs.

If you have any questions on this premium increase, you may contact Wanda McKenna, human resources officer, benefits, at
ext. 24855 or any member of the benefits section at ext. 24552.