Owens addresses faculty on revamping retirement plan
Interim UM System Steve Owens sent the following letter to university employees addressing the upcoming changes being made to the retirement plan:
Dear university colleagues:
The University of Missouri Board of Curators is expected to vote on changes to the UM retirement plan for new employees only at its regularly scheduled meeting June 16-17. These changes, which have been explored in-depth for nearly two years, would change the current retirement plan for new employees hired after Sept. 30, 2012. If the board accepts the proposed changes, university administrators will work with the Retirement and Staff Benefits Committee to develop an alternative retirement program for new employees that includes a combination of both defined benefit and defined contribution features.
As promised, the current UM defined benefit plan for existing employees and retirees will not change by this action, including the benefits paid upon retirement. The university remains committed to honoring the obligations of the current plan, including funding the annual required contribution and continuing the annual mandatory contribution from employees with an amount as low as reasonably possible. Detailed reports and independent actuarial analyses have confirmed that the current plan will not be harmed by closing the plan to new employees next year.
Details of the “combination” plan for new employees is still under development, but we are not expecting any increased costs to the university or employees. We also anticipate that new employees will be asked to pay approximately the same mandatory contribution as current employees. Our goal is to bring a recommended plan design to the board of curators at its regularly scheduled October 2011 meeting or as soon as possible thereafter.
These recommended changes are the result of considerable analysis and input from numerous constituencies across the campuses, including the ad hoc Retirement Plan Advisory Committee. This committee was composed of several members of the Retirement and Staff Benefits Committee, Intercampus Faculty Council, Intercampus Staff Advisory Council and UM Health Care. We understand the importance of this change to university benefits, and like the committees and actuaries who reviewed the current plan, we continue to believe that a change in plan design for new employees is necessary to protect the long-term viability of the current plan for current employees and retirees. We also believe that the new combination plan, some features of which are more typical in higher education, will help us better attract and retain new employees.
Once again, I thank the faculty and staff across our four campuses who took part in these ongoing discussions during the past couple of years. As always, your input, questions and comments are valued. We look forward to hearing the board’s discussion regarding the retirement plan this week. In the meantime, additional information regarding these proposed changes, including the Retirement Plan Advisory Committee’s report and recommendation, as well as proposed action by the board of curators, can be found online on the Retirement Project page at http://www.umsystem.edu/ums/hr/benefits/retirementplanproject.
Sincerely,
Stephen J. Owens
Interim President
The Board of Curators are discussing the plan now and is expected to vote on the matter soon.