Archive for November, 2010

More to come …

Thank you for following the Missourian’s live coverage of the UM System Board of Curators special benefits meeting. Although the curators didn’t vote on any particular action, they expect to hear a recommendation in December.

UM President Gary Forsee’s town-hall tour will stop at the MU campus at 10 a.m. Wednesday.

Stay with ColumbiaMissourian.com for a summary of today’s discussions and also for future coverage of UM’s changing benefits plan.


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An example of a matching design

One of the benefits plans on the table for discussion would have the university match employee contributions in a defined contribution plan.

Mary Ann Dutemple, a senior consultant with Towers Watson, presented a sample plan to the UM System Board of Curators on Monday:

  • The university contributes 5 percent of pay, with a 200-percent match up to 2 percent of pay.
  • Thus, the combination of match and contribution would equal 9 percent with the maximum contribution from university.
  • Mandatory employee contribution: 1 percent for hourly employees, and 2 percent for professional employees.

This example, Dutemple said, meets UM’s objectives, particularly in competitiveness. A 9-percent contribution from the university would make it competitive among its peers. Additional objectives include:

Link to service: Provides a financial incentive to remain with the university for at least three years.

Program complexity: The system is more complex but would allow for a higher university contribution.

Cost sharing: Faculty and staff must contribute, but at different levels.

Program cost: The net university cost would be 7.8 percent to 8.5 percent of payroll. Additionally, there is a chance not everyone would maximize university contribution.

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Betsy Rodriguez, UM System vice president of human resources, opened the second half of today’s Board of Curators meeting by presenting benefits packages from some Big 12 and Big 10 universities.

The UM System is the only institution in the Big 12 to offer only a direct benefits plan. Seven out 15 schools Rodriguez studied offer a choice between direct contributions and pension-based plans.

Universities with defined benefits do not control the plan’s features, according to Rodriguez’s findings. Instead the state controls the features, as MOSERS would if UM outsourced its benefits to the state agency.

Rodriguez said she is keeping in mind that no single plan from UM’s peer institutions is the best fit for all employees, nor is there one that meets all the objectives. UM’s goal, Rodriguez said, is to forge a plan that can meet the needs of both higher-and lower-paid employees.

Rodriguez’s presentation went on to address UM faculty and staff concerns, based on town hall meetings she has held at the system’s four campus during the past two months.

Among the communication challenges Rodriguez listed is the widespread belief that UM administrators have made a decision about a new plan and haven’t been transparent. Rodriguez stressed that the school is working to build trust through transparency and honesty.

From the administrative end, the UM Retirement and Staff Benefits Committee is concerned that a direct contribution plan would not provide enough retirement income and would harm lower-income employees.

For now, there is no explicit solution.

These and other concerns have arisen from town hall meetings, which UM President Gary Forsee earlier today announced will continue Tuesday as part of a two-week tour of the system’s four campuses.

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MOSERS not on the table for discussion, Forsee says

UM Curator David Wasinger on Monday returned to his previous suggestion that the Board of Curators should not be responsible for crafting a new retirement plan for the university.

When the board met in September, Wasinger surprised his colleagues by saying the system’s benefits plan should be rolled into the Missouri State Employees’ Retirement System, or MOSERS.

“The board frankly does not have the time to devote to all of these issues,” Wasinger said at the meeting in Springfield.

Outsourcing to MOSERS would move management of UM benefits from the university to the state of Missouri.

However, UM President Gary Forsee interjected, noting that there is no plan for discussion that would roll UM benefits into MOSERS.

“They (at MOSERS) aren’t particularly interested,” Forsee said. “We’ve got a little more work to do with them down the road, but it’s not a current plan.”

At the meeting before Forsee spoke, Wasinger reiterated his belief, again stressing that the issue is too much for the university’s governing board. Retirement plans for most public institutions are incorporated into states’ benefits systems, he said.

Rod Crane from the TIAA-CREF Institute said that as far as he knows, the University of California System is the only one other than Missouri that has a benefits plan separate from a state agency.


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UM president opens curators meeting

As UM System President Gary Forsee addressed the school’s governing board, he stressed that a new retirement plan for the university should focus on the needs of employees, not budget or cost.

“It is about the employees,” Forsee said. “This is about making sure we have the correct framework for the future.”

Additionally, Forsee announced the establishment of a special committee designed to tackle this issue. It will include the system’s Compensation and Human Resources Committee and select faculty and staff. The committee will report to Betsy Rodriguez, UM System vice president of human resources.

“I believe that’s the most efficient way the faculty and staff voice is being heard,” he said.

The challenge, Forsee said, will be to craft a new plan that mitigates risk for both current and future employees. Any change to the system’s retirement plan will only affect new hires.

Forsee previously has joined Rodriguez in holding talks with faculty and staff regarding their concerns and objectives in revamping the retirement plan.

Those town hall meetings will continue, beginning Nov. 2, Forsee said. The president will tour the system’s four campuses over the next two weeks to seek additional input from faculty and staff.

Meanwhile, the curators throughout today will hear presentations regarding the pros and cons of a defined contribution plan. But the discussion will continue up until the curators’ December meeting, at which point Rodriguez will recommend a plan to the board.

“So, today is about a next step,” Forsee said.

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Welcome to the UM System Board of Curators meeting

The UM System Board of Curators is meeting today to address possible options to revamp its retirement-benefits plan. Stay with U.Town for live coverage of the discussion, which will weigh the benefits of a defined benefit versus defined contribution plan.

For more information, please read previous Missourian coverage on this topic:

UM crafts retirement-plan objectives from faculty input

Funding woes at heart of UM curators’ concerns

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