ROLLA — Salary increases for University of Missouri System faculty would average 1.75 percent across its four campuses, according to the system's preliminary budget.
At a UM System Board of Curators meeting Thursday, Nikki Krawitz, the system’s vice president for finance and administration presented the projected salary increase figure, which is lower than the 3 percent increase discussed at a Feb. 20 curators meeting.
Each campus will come up with its own plan for how to dole out salary increases. MU Provost Brian Foster said at the meeting that MU is planning a 2 percent salary increase along with a pool for special raises.
However, Krawitz said final numbers for the salary increases won't be available until the budget is presented in June because the system is still calculating an increase in medical benefit costs that will accompany the salary bump. In addition, Wolfe said that any increases in state support could go to help boost salary increases.
The board spent part of its April meetings Thursday reviewing the system's preliminary budget for fiscal year 2013, which is still based on the reduction in state support announced by Gov. Jay Nixon earlier this year.
In the afternoon, curators heard a legislative update from Steve Knorr, UM System government relations vice president, about major issues in Jefferson City affecting the university, especially the budget.
Knorr referenced an action Wednesday by the Senate Appropriations Committee to put forward a budget plan that reverses Nixon's cuts to higher education and provides a modest increase in funding for K-12 schools.
David Lieb of the Associated Press reported Wednesday that by following the House's budget recommendations, the Senate "has essentially locked in those dollars."
Knorr agreed with that conclusion, but conceded that the budget is not fully finalized and will likely go to the Senate floor next week.
Because the state budget is not finalized, the system is still planning its budget based on a $30 million reduction in state support, which includes an additional $18 million as part of the state's inclusion in a settlement with the nation's five largest mortgage banks.
System President Tim Wolfe said any money more than the governor's proposed decrease will be used for strategic investments — such as providing faculty salary increases and padding the system's massive deferred maintenance debt — that position the four campuses for success and strength going forward.
"It won't be going back to do the same old, same old," he said.
On Thursday morning, curators discussed an investment structure for UM System employees' retirement fund. Investment consultants presented the board with advice about the portfolio for the retirement plan, which currently includes approximately 18,000 active employees and 4,000 retirees.
The changes in the investment portfolio are a part of an ongoing review process that supports the university in receiving a desired 8 percent return on investments.
To help pay for the rising cost, the system needs to make more in returns on its investments, which could mean changing the types of investments it selects, such as taking on more stocks for more return and, consequently, more risk. The system's financial advisers, Strategic Investment Solutions, Inc., presented a range of portfolio options for curators to consider and eventually choose from at the board's June meeting.
The board approved an investment policy for the new retirement plan that will begin in October and combines some elements of a defined benefits plan with a defined contributions plan.
The board also heard a presentation regarding its required annual contribution to the plan. During the economic downturn in 2008 and following, the system made a lower than planned return on its investments. Playing catchup on those losses, coupled with the increasing cost of funding a growing retiree pool, means that the annual required contribution for the next fiscal year is 10.15 percent of the system's payroll — the highest in the history of the plan.
Also during the afternoon meetings curators approved:
- financing for the Henry W. Bloch Executive Hall for Entrepreneurship and Innovation at the University of Missouri-Kansas City;
- the project design for a new Chemical and Biological Engineering Building at Missouri S&T;
- a new master of medical science program at UMKC. The program would train physician assistants and would begin admitting students in January 2014 at the earliest.
The board met at the Havener Center at the University of Missouri Science & Technology on Thursday and will continue its meeting Friday when it will hear reports from Wolfe and board chairman David Bradley.