UPDATE: Forsee says no pay raises for UM employees

Tuesday, February 3, 2009 | 5:01 p.m. CST; updated 10:02 a.m. CDT, Thursday, October 1, 2009

*CORRECTION: UM System President Gary Forsee's recommendation for eligible faculty contributions to university retirement plans would be 1 percent for any salary up to $50,000, and 2 percent on any salary earned above $50,000. An earlier version of this article misrepresented his recommendation.

COLUMBIA — MU employees will see no raises and will pay into their own retirement funds if the UM System's board of curators agrees to proposals its president made Tuesday.

Gary Forsee is also asking the board to give him the option to furlough employees "if necessary."

Curators met Thursday and Friday on the MU campus.

Among suggestions to soften the recession's blow include transition assistance programs for those who may be laid off.

In a letter to employees, Forsee called these ideas "continued prudent actions on behalf of the university to manage the difficult economic times we all face."

The retirement plan recommendation would be a permanent change for all benefit-eligible employees if the board approves it Friday. No part-time employees would be affected.

Should the curators approve Forsee's retirement recommendation, eligible employees would contribute 1 percent for any salary up to $50,000, and 2 percent on any salary earned above $50,000*.

Forsee said that such a pre-tax contribution would keep employees' take-home salaries near the current levels.

Faculty Council Chairman Thomas Phillips said while this solution isn't ideal, he likes it better than most other options.

"I'm not happy to be losing part of my salary, but I prefer it to laying off faculty and staff members," he said, adding that the plan will make it harder to recruit new faculty in the future. "This is not a good thing but, in the current time of fiscal uncertainty, things like this are happening. We aren't happy, but we understand."

Phillips said he expects the Board of Curators to approve all of Forsee's recommendations.

The plan should have no effect on employee opportunities for promotion, according to UM System spokeswoman Betsy Rodriguez. Phillips said a proposed 1 percent contingency fund should cover any nominal salary increases from promotions.

Forsee also said such a benefit plan will put the UM System "more in line with our competitors."

Rodriguez said the system compared itself to 13 public universities when researching new retirement options.

Forsee made clear in the release he will not recommend early retirement incentives to the board as they have been expensive and difficult in the past.

Phillips explained such incentives are long-term solutions that take a few years to see a return. Right now, he said, the universities need immediate cost savings.

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