Viewing page 83 of 181

This transcription has been completed. Contact us with corrections.

-34-

As will be seen on schedule D, unless new dollars are generated, from donations or by auxiliary activities exceeding current budget projections, the Institution's unrestricted general purpose fund will be nearly depleted by the end of fiscal year 1987. The fund had a balance of $5,138,000 as of September 30, 1985.

Also of note is the fact that interest rates on the Institution's working capital have dropped from 10.76% in late 1984 to 10.03% as of December 18, 1985. Further drops in interest rates are anticipated in keeping with those posted for Treasury Bill and commercial paper rates.

[[underlined]] Health Benefits [[/underlined]]

Smithsonian management has determined that it would be in the best interest of the Institution to covert the health plan for trust fund employees from a self-insured to a carrier-insured reimbursement contract. Thus, effective January 1, all eligible Smithsonian trust fund employees will be offered the choice of an HMO arrangement or enrollment in a reimbursement plan of Blue Cross/Blue Shield. The Institution's basic cost for this new plan will be essentially the same as it would have been under the self-insured plan except now the Smithsonian is indemnified for catastrophic claims. Such claims, several totaling up to $500,000 each, were depleting the Institution's Health Plan Reserve fund. Future claims of a similar magnitude could not have been maintained.