Union objects to UM pension decision

By TERRY GANEY

Columiba Tribune

Monday, February 16, 2009

University of Missouri System President Gary Forsee has a big sales job ahead of him, convincing employees that contributing to their defined benefit pension program is a good thing.

A business representative for the union that covers campus workers says employees already have contributed to their pensions by accepting lower wages and their contract with the university does not provide for another contribution.

“Our biggest question right now is whether it’s even legal to take your wages and do anything with them without your authorization,” said Rex Taggart, business representative of Local 773 of the Laborers International Union of North America. The union represents some 1,100 food service workers, custodians, maintenance employees and groundskeepers on the MU campus.

The UM Board of Curators has approved Forsee’s proposal to require workers with salaries below $50,000 to contribute 1 percent of their wages to their pension plan. Those whose income is $50,000 and above would pay 1 percent on the first $50,000 and 2 percent on the amount above that. Employees who leave the university before their contributions vest would get them back.

Currently the plan is financed entirely through university contributions, similar to plans that cover state workers and employees of the Missouri Department of Transportation.

“It’s worked out very well,” Taggart said. “It’s always been the light at the end of the tunnel for people.”

Missouri’s public school teachers contribute to their own plans, which are matched by local school districts. The teachers’ pension plan is the biggest in the state. Defined benefit plans differ from defined contribution plans, common in the private sector, in which workers kick in a percentage to their own 401(k) plans.

Many government pension plans lost a quarter of their value in the collapse of the stock market last year. Contributions will be needed to make up the difference. Forsee wants some of that to come from employee wages. The administration is hosting a series of workshops on the campuses explaining the plan.

“Our issue is that it’s a change,” Forsee said. He said the economy had rifled its way through the university budget and the impact on the pension plan needed to be considered. He said many other states and universities as well as the private sector had shifted to plans in which employees contribute something.

Forsee said information from actuaries indicated the university would have to significantly step up its contributions over the next three years for the plan to be fully funded. “For the university to assume that those funds are going to be available to us from state sources was a high-risk proposition,” Forsee said.

Taggart said the plan as proposed would take money away from workers’ income at a time when they need it most.

“It’s going to make a hardship for people,” Taggart said. “If the fund was in a crisis, it would be one thing. People need this money in their pockets.”

Reach Terry Ganey at 573-815-1708 or e-mail tganey@columbiatribune.com.