COLUMBIA — MU employees will pay into their retirement plans beginning July 1, according to a memo sent to employees Monday morning.
The date corresponds to the beginning of the 2010 fiscal year.
These are examples of what the annual contribution would be at various salary levels:
"President Gary Forsee wanted to be able to realize the full impact for the full upcoming fiscal year," said Jennifer Hollingshead, spokeswoman for the UM System.
A Web site linked to the memo made it clear all full-time, benefit-eligible employees must participate in the pension plan with no choice of opting out.
The UM System Board of Curators approved the changes Feb. 6 during a meeting in Columbia. Final details will be released after the board's next meeting in April.
The step was taken to help the system's financial position during an expected economic downtown and to make it more consistent with other peer institutions that already require contributions, the system's Web site reported. Previously, the system has not required employee contributions toward its own pension plan.
Employees will be required to contribute 1 percent of their salary up to $50,000, and 2 percent on any amount exceeding $50,000.
For example, an employee who makes $90,000 would pay $500, or 1 percent of their first $50,000, plus $800, or 2 percent of the remaining $40,000, for a total contribution of $1,300.
The summary of the pension plan changes includes these items:
- Temporary and part-time employees will not have to contribute to plan. UM retired employees who work at the university on a part-time basis will also not be required to contribute.
- All contributions will go to the UM Retirement, Disability and Death benefits plan.
- The system will continue to be responsible for most of the resources needed to fund the plan.
- Regular pay, contract pay, vacation pay, personal days, shift differential, sick leave pay, and summer session pay are examples of salary categories to be used in determining contribution amounts for employees.
- The employee contributions to the plan will be made before taxes.
- Retirement benefits in the plan will not be affected by any of the changes. They continue to be based on the gross amount of an employee's salary.
- Employees who decide to leave the university before they have vested status will be eligible for a refund in the amount already contributed, plus interest. Final determination of the interested factor will be announced when plans are finalized.
- Contributions to voluntary retirement savings plans such as the UM Deferred Compensation Program or UM Tax Deferred Annuity Program can still be adjusted at any time.