Following a string of budget cuts by Missouri Gov. Eric Greitens, the board of governors has updated Truman State University’s contribution rate to its statewide retirement plan for professors — bringing annual costs up by an estimated $784,000.
Dave Rector, Truman’s Vice President for Administration, Finance and Planning, says rather than providing any changes for professors, the university will handle this financial plan. After public education took the brunt of Gov. Greitens’ $146 million budget cuts in early January, Rector says the additional costs on the University were unexpected and will make next year’s budget suffer.
The specific changes, as read from a copy of the Missouri State Employee’s Retirement System guidelines for retirement, address an aspect of the state’s retirement program that mandates an employer’s yearly contribution to a collective “pot.” This pot is the funding by which MOSERS ensures Missouri’s retirees are receiving a quality income replacement, and are able to help stimulate the economy in their retirement, according to the MOSERS website.
Rector says this year, Truman will be paying an extra 2.8 percent to MOSERS. Rector says the rate had been steady for four years. This raises the rate of contribution per-retiring-employee from 16.7 percent to 19.5 percent, a MOSERS summary says. In addition, MOSERS says inflations in rates like these match the rising costs of living.
“We pay this to MOSERS based on payroll,” Rector says. “So, a person earning $50,000 will cost $1,240 in additional retirement contributions during the next budget year. This is not money the individual will receive, it goes into a pool of funds held by MOSERS.”