UM Board subcommittee votes to expand Forsee's authority

Thursday, February 5, 2009 | 9:17 p.m. CST; updated 10:06 p.m. CST, Thursday, February 5, 2009

COLUMBIA — University of Missouri System President Gary Forsee called the university's economic situation a "perfect storm” Thursday.

Meeting with the Board of Curators, Forsee  described a convergence of economic circumstances, including a diminishing ability to reliably generate revenue from tuition, philanthropy, external fundraising for research and state funding.

Asking the Board of Curators for emergency measures to manage the situation, Forsee brought to the table proposals including a wage freeze, employee contributions to retirement plans and authority to impose temporary furloughs.

“Our traditional reference points of how revenue comes in the university, our traditional dashboard and grounding post about how we go about assumptions that we make for our plan … are all up in the air,” Forsee said. “They’re in turmoil.”

The board’s Compensation and Human Resources Committee went on to vote unanimously in favor of delegating authority to Forsee to impose temporary furloughs. The measure goes before the full board Friday.

Immediately after the motion was passed, it was amended to prevent Forsee from ordering furloughs without consulting the board. Another amendment ends his authority on June 30.

The Compensation and Human Resources Committee also approved a measure that would give Forsee authority to develop a transition assistance procedure for employees who lose their jobs as a result of budget cuts.

Assistance would include continued access to medical insurance and severance pay based on the number of years a person was employed by the university.

The board will also take up the recommendation to ask employees to pay into their retirement plans.

Under the proposal, employees who participate in a retirement plan will be required to make contributions based on their level of salary, beginning at 1 percent for salaries up to $50,000, and 2 percent on any salary earned over $50,000.

This would free up $11.9 million to go into a stabilization fund for the UM System, said Betsy Rodriguez, the university's vice president of human resources.

“In general, we had two guiding principles, and one was to minimize the impact to the lowest-paid employees,” Rodriguez said. “We determined that that was at the $50,000 salary mark."

"The second was to maintain our competitiveness among our peer group,” Rodriguez added.

The UM System hired Hewitt Associates, a human resources consulting firm, to conduct a relative value study, which compared UM employee benefits to those of 15 peer institutions. The study found that the UM System placed between second and third best among the 15 benefits plans.

Comparing the UM System to "peer" universities, Rodriguez said, “We are behind our peers in salary significantly, but we’re not so bad on benefits.”

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