Forsee travels to MU to discuss new pension plan

The plan mandates that employees contribute to a pension fund.

By Greg Young

Published Feb. 19, 2009

UM system President Gary Forsee is scheduled to appear on campus today to answer questions about a new pension plan that is drawing some controversy.

The newly approved pension plan would require employees making more than $50,000 a year to pay 2 percent of their salary into a pension fund and 1 percent for employees making below this salary. The new rules, which were passed by the Board of Curators earlier this month, will take effect in July and final details will be released sometime in April.

This means that a person making $80,000 a year, for example, would have to pay 1 percent of the total on the first $50,000, a total of $500, and 2 percent on the remaining $30,000, which would total $1,000.

Additionally, the board gave Forsee the right to implement emergency furloughs if he deemed them necessary.

Rep. Mary Still, D-Columbia, in a letter to Forsee, voiced concerns about people making under $30,000 a year paying 1 percent to the pension fund. In the letter, Still suggested raising the percentage requirement for people making above $200,000 and eliminating the requirement for employees making below $30,000.

"I would like to see them exempt, or give them an option not to be a part of pension, a lot of people are going to have a job here and they'll do something else, so a pension might not be of that great of a benefit," Still said.

UM system officials said they designed the current plan with lower income employees in mind.

"The University of Missouri took in to consideration its lowest-paid employees when determining employee contributions to the retirement program," Vice President for Human Resources Betsy Rodriguez said. "In fact, our university is unique among higher education institutions in using a tiered approach that provides some protection to these employees."

The UM system is planning to use Forsee's visit to MU as an opportunity for employees to voice their concerns about the controversial new plan.

Forsee said the plan is necessary to help solve the UM system's budget shortfall. Last December, Paul Wagner, Missouri Department of Higher Education deputy commissioner, asked different departments to prepare impact statements for cuts between 10 and 25 percent.

"These actions may become necessary should the state's budget shortfall require us to cut our operating budgets late in the fiscal year," Forsee said in a Feb. 13 news release. "I have committed to discussing implementation of these tools with the board prior to implementing such emergency measures."

Some employees are complaining about the mandatory nature of the cuts, and they will have the opportunity to address their concerns at Friday's meeting. However, Forsee said that because the UM system is expecting cuts in its state funding, they have to take specific actions.

"I know many of you are concerned about these changes, particularly the employee contribution to the pension plan. We simply cannot afford for the university to take on the long-term liability required to keep the plan fully funded without your contribution," Forsee said.