For years, the MU Retirees Association has pushed University of Missouri System officials to raise the pensions of retired faculty and staff to match cost of living increases.
Rod Gelatt, former president of the association, said a 2 percent increase set to take effect Sept. 1 is a step in the right direction.
“We are talking about a group of people that are living on a fixed income,” Gelatt said. “When health care increases or medicine goes up, we need more to cover those.”
Gelatt is one of the 5,522 faculty and staff retirees who were recently notified about the increase, which will cost $1.71 million systemwide.
The most recent adjustment to retirees’ pensions was a 1 percent increase in 2005, said Ken Hutchinson, UM vice president of human resources; before that, the previous increase was in 2001.
Gelatt hopes that UM will budget for cost-of-living increases for pensioners every year. As it is, the increases in recent years have not kept pace with inflation. According to U.S. Department of Labor’s Bureau of Labor Statistics, the Consumer Price Index increased an average of about 2.7 percent annually between 2001 and 2006.
Gelatt said that, after factoring in proposed increases in electricity and other utility bills, the 2 percent increase will not result in an increase in his disposable income.
The Board of Curators approved the pension adjustment during its May 31 meeting.
The pension increase comes as UM administrators vow to increase the salaries of faculty and staff, which lag behind other large research universities in the United States. In April, curators ordered each of the UM System’s four campuses to reduce its general operating budgets by 1 percent. MU’s share of the cuts under the plan would be about $4.2 million for fiscal 2009, which begins in July.
Doris Littrell, a member of MU’s retiree advisory committee, has not factored the increase into her budget, but she knows it will not make much of a difference financially.
“A lot of retirees don’t have huge pensions because they didn’t have big salaries,” she said.
Littrell said retirees deserve increases in benefits whenever current employees receive raises. Still, she said, 2 percent is “better than nothing.”
“A lot of retirees worked at MU a long time and were paid a lot less money than people who are working for MU now,” she said.