UM System curators approve new employee retirement plan

Thursday, October 20, 2011 | 8:24 p.m. CDT; updated 11:00 p.m. CDT, Thursday, October 20, 2011

KANSAS CITY — The UM System Board of Curators approved a range of new projects, including a new retirement plan, Thursday at a full-board meeting at the University of Missouri-Kansas City.

Among other issues addressed at the meeting, curators voted to approve a renovation project to MU's Gwynn Hall and established a new MU degree program called the Bachelor of Health Sciences, Athletic Training.

The curators took no action regarding the University of Missouri System presidential search or MU's athletic conference affiliation.

Curators met first, acting as the Presidential Search Committee, for 10 hours Wednesday night and Thursday morning in a closed-door executive session at The Raphael Hotel in Kansas City. Board chairman Warren Erdman said the committee would be doing routine business and no action would be taken.

The curators' open session full-board meeting began at 1 p.m. in the University of Missouri-Kansas City student union.

The first item on the agenda was a review by Betsy Rodriguez, UM System vice president for human resources, of the proposed new employee retirement plan.

No new information was introduced to the curators Thursday, but at an Oct. 4 meeting in St. Louis, Rodriguez presented a final proposal for consideration of the curators.

The current plan is based on a defined benefits model, which specifies what percentage of an employee's paycheck goes into the retirement plan and guarantees the employee a certain amount upon retirement.

The new plan combines some elements of a defined benefits plan with a defined contributions plan, in which some retirement income would be put in investments selected by the employee. It would not guarantee a certain amount of return upon retirement.

Curator Don Downing was the only dissenting vote. He said even though he disagrees with the plan, he was pleased with the transparency of the board and of Rodriguez's discussions.

"I think the process has been extraordinarily transparent and fair, and I really appreciate that," Downing said.

The new retirement plan will take effect for new employees in October 2012. Rodriguez will make a recommendation on a vendor to handle the new retirement plan investments at a Dec. 8 meeting, and the curators will continue to wrap up details of the plan throughout the first half of next year.

The curators also heard a briefing of the system's financial standing and an analysis of fiscal year 2011 from Nikki Krawitz, UM System vice president for finance and administration.

With the end of federal stimulus funds in fiscal year 2013, fewer state appropriations and more state money going to disaster relief around the state of Missouri, Krawitz acknowledged the system's financial hardships.

"Despite the challenges from decreased state funding and increased enrollment, the university has been able to strengthen it's financial standing," Krawitz said.

In the light of difficult financial times, Downing said it appears the system has managed its finances well. Krawitz said continuing to build the system's net asset base is essential for being able to take on more debt in the future and maintain the UM system's credit rating.

The curators also heard reports on internal and external audits, though no action was taken.

The curators approved several other action items, including:

  • Creation of a new MU degree program called the Bachelor of Health Sciences, Athletic Training. The degree will integrate athletic training courses in the physical therapy program.
  • Retaining Strategic Investment Solutions, Inc. as an investment adviser. The five-year contract term will require board approval each year. SIS is an independent investment firm with 31 retainer clients and $422 billion in assets under advisement.
  • Creation of a commercial paper program that would allow Krawitz and UM System treasurer Thomas Richards the authority to issue commercial paper notes up to $375 million. The notes could be used to finance or refinance capital projects.
  • An $11 million renovations project to MU's Gwynn Hall. Primarily funded by campus facilities and maintenance dollars, the project will include major renovations to the inside of the building, similar to the projects at Tate and Switzler halls.

The curators will reconvene tomorrow morning for an additional open session, which will include a report from Interim UM System President Stephen Owens, the University Health Care system annual report and a Chancellor's panel discussion.

Curators are scheduled to enter another executive session following a short press conference at 10 a.m. Friday.

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