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To: Pension Recipients
From: Bill Stefka
Date: September 5, 2003
Re: Medical Insurance Update/Proposition 15

Dear Pension Recipients:

This is just an update to let you know it has been proposed that the City's Medical Insurance Plan be replaced by another program next year for 2004. We have word that there will be 2 plans available, with one of the plans replacing the City Insurance Plan. We do not what the proposed costs will be or other things such as whether you are free to go to the doctor of your choice, etc. If you recall, the last time the City Medical Insurance Plan was taken away a company called Blue Choice replaced it and the insurance premiums eventually skyrocketed. Of course we have no way of knowing if this will happen again, but we need to be vigilant so there are no surprises. We encourage you to get as much information at the next open enrollment in October, if not before. The City of Austin employee benefits number is (512) 974-3284, if you have any questions.

On another matter, there will be upcoming general elections on September 13, 2003 that will include several proposed constitutional amendments. In February our pension board adopted a resolution in support of HJR 54 which was state legislation proposing a constitutional amendment. The legislation passed and this proposed constitutional amendment will be Proposition 15 on your ballot. The ballot will probably read: "The constitutional amendment providing that membership in certain retirement systems is a contractual relationship and that accrued benefits in those systems cannot be reduced or impaired." The amendment establishes the obligation of maintaining vested benefits as the joint responsibility of the active members of the retirement system and the political subdivision (City). The purpose of the amendment is simple: it prevents the taking away of benefits that an employee has been promised, for which he or she has met the requirements for and consequently earned. Obviously our pension board is in support of this as well as TEXPERS, the Texas Association of Public Employee Retirement Systems, of which our pension fund is a member. They encourage your support if you also feel this is an important measure. It is our understanding that Local 975 is also in support of this amendment. This is merely a reminder that these elections are coming up and to make you aware of Proposition 15. The attached reminder is for informational purposes only: about Proposition 15 and the upcoming elections.

If you have any questions, or if we can be of further assistance please contact our office.


William E. Stefka