University of Missouri System lacks funding for employee retirement program
Updated On: May 07 2013 04:32:11 PM CDT
The University of Missouri System's retirement fund is short of money.
The UM Board of Curators met Monday to talk about the current shortfall.
The fund has a little more than 84 percent of the money needed to cover the cost of retirements.
This problem has been a concern for almost four years, since the economy took a dive in 2008.
While UM said it's better off than many of its peers, it is still an issue that needs to be addressed.
Two factors have contributed to the losses in UM's retirement fund: a rising cost in medical benefits for employees and lower than expected investment returns.
The fall in funded retirement began in 2008 and has continually decreased over the last four years.
Some University of Missouri professors say they are concerned about what the changes in benefits could mean.
"What losses are going to be imposed or what expenses are going to be imposed on faculty so that their net pay is reduced? What losses in benefits are going to be imposed? That's what I'm concerned with," University of Missouri Faculty Council Chairman Harry Tyrer told ABC 17 News.
Employees are already paying part of their retirement, when the university had originally said it would pay for all retirement.
Tyrer said the market not meeting expectations and the rising cost in benefits impact more than just the retirement fund.
"Those kinds of things reduce the quality of the institution. We do not keep our best people because our best people will be hired away from us by folks who have already solved that problem," Tyrer said.
Board members Monday said benefits are going to change because the cost keeps rising.
The board will meet again in June to make the concrete decisions on the issue.
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