COLUMBIA — The University of Missouri System Board of Curators will tackle an unforeseen shortfall in state funding at its scheduled meeting this week at MU, as well as vote on changes in the employee retirement plan and get an update on the presidential search.
Thursday afternoon, Nikki Krawitz, the system's vice president for finance and administration, is expected to recommend ways to meet the steeper cuts imposed by Gov. Jay Nixon last week. Her plan will be reviewed first by the Finance Committee before consideration by the full board.
Nixon announced June 9 that the appropriation for the system's four campuses will be cut by 8.1 percent instead of the anticipated 7 percent. UM tuition increases and funds set aside for disaster relief were cited as reasons for the additional 1.1 percent cut.
The loss will amount to about $5 million for the system and $2 million for the Columbia campus, said Mary Jo Banken of the MU News Bureau.
In the past, travel expenses, maintenance and repairs have suffered the brunt of budget cuts. This time, the budget planners "are looking at every option available," Banken said Wednesday.
Curators are also expected to vote this week on changes to future employee retirement plans after nearly two years of discussion. The changes would not affect current employees but would apply to workers hired after Sept. 30, 2012.
"The university remains committed to honoring the obligations of the current plan," Interim President Steve Owens wrote in a message he sent to employees Tuesday.
Instead of the current defined benefit plan, new employees would be offered a combination of a defined benefit and defined contribution plan, Owens said.
Under the existing defined benefit plan, UM employees are guaranteed a monthly benefit for life upon retirement. Although employees currently pay a small contribution into this plan, market risks such as fluctuations in the economy fall on the employer, as they are bound to pay out the promised benefit amount.
Conversely, defined contribution plans specify how much the employer and employee must contribute to an account. The risk falls on employees in this plan, with retirement benefits contingent upon the performance of their investments.
Betsy Rodriguez, UM vice president for human resources, said a combination plan would include elements of both, with a certain amount guaranteed and the rest subject to an employee's investment decisions.
“It would be half of the defined benefit plan that we have now, and the other half will come from a defined contribution,” Rodriguez said.
Owens' message to employees indicated that new employees would be asked to make approximately the same mandatory contribution as current employees.
Although details will not be announced at this week's meetings, Rodriguez said board action will move the changes to the next step.
“It’s directing us to develop the final plan design for a board vote in October,” she said.
The Presidential Search Committee also will convene Thursday in executive session. Warren Erdman, who chairs the search committee, said he would provide a public update afterward.
After Gary Forsee’s resignation in January, Owens has served as interim president.
The two-day session will begin at 7:30 a.m. Thursday in the Reynolds Alumni Center, with committee meetings taking up most of the day.
The full board meeting Friday will be live audio-streamed at http://www.umsystem.edu/ums/curators/meetings/stream.shtml.