Murray State President Talks Proposed Pension Bill, Graduation, Enrollment, Construction

May 8, 2019

Credit Murray State University

With spring semester coming to a close, Matt Markgraf sat down this week on Sounds Good with Murray State University President Bob Jackson to talk about commencement, fall enrollment, construction projects underway and they unpack how the proposed pension relief bill would affect the university and the possible roadmap moving forward.

President Jackson said, this Saturday, about 1,400 students will graduate from the university.

Looking ahead to enrollment next fall, Jackson said summer orientation numbers are up from the previous year, which he said is encouraging.

On the potential outsourcing of custodial and grounds keeping staff, Jackson said the overarching issue in regard to this topic is the state pension system. 

"Anything that's happening with KERS is going to impact other things on campus. How we manage things, whether it's outsourcing or otherwise. So, all of those options must be looked at and they will be looked at in the weeks ahead."

University officials have discussed outsourcing custodial and grounds in the past. According to university officials, there are approximately 75 full-time individuals in custodial and grounds and about 20 students. Dining, health services and motor pool have all been recently outsourced.

Regional university presidents, including Jackson, last week endorsed Governor Matt Bevin's proposed alternative to the pension relief bill he had vetoed. Bevin has said he would call a special session to address this issue, though some Republican lawmakers this week said the governor lacks votes in the House.

Jackson said the bill is important because the university's current KERS pension rate is 49%. "So that means every dollar of salary that we pay on behalf of an employee in the KERS plan, we're paying 49 cents of that into the pension system. If a reform doesn't occur in some form or fashion by July 1 that rate goes to 84%," he said, adding that this would be unsustainable and unmanageable and amounts to about $4.5 million in that change. "So it causes us to have to look at all options on this campus so we protect and preserve our teaching and learning component for our students."

The proposed bill would freze the current rate at 49% for one year. "So you've got one year - a one year window - to make a decision." The bill would also allow options for universities to get out of the KERS system, or to stay in the system and potentially pay the 84 percent or more going forward, Jackson explained. Different "mechanisms," he said, allow the university to get out of the system: over a period of time or a lump-sum payment.

What Murray State ends up doing depends on what happens in the legislature and with the governor. Jackson said he hopes a bill passes that is similar to what is introduced. This would give Murray State a one-year window to look at options. "We will seek some outside help in regard to that actuarial analysis of what we actually owe the system and how we would pay that back over a period of time and then how does it impact the operations of Murray State University."

The bill encourages employers to force employees out of plans said to be less generous. In what that process would entail at Murray State, Jackson said this aspect depends on what is passed. He said if the proposed bill passes there would be a freeze of individuals in the current KERS plan and would place some of those individuals - possibly all - into a separate optional retirement plan - which, one is already in place at Murray State.

If the bill is not passed, university officials warn of "disastrous consequences for our students and employees." At Murray State, this includes the potential $4.5 million increase in pension obligations. "It's unsustainable," Jackson said, "We cannot keep cutting our budgets at universities, which are set aside, in large part, for the teaching and learning component."

The university's Board of Regents would ultimately determine whether to pass any action regarding potential decisions made as a result of the bill and a recommendation put forth by the administration. 

Among other topics, Jackson described the new health services partnership with Primary Care Medical Center in Murray, which will operate a new clinic in Wells Hall.

Numerous construction projects are underway this summer on the main campus. The razing of Woods Hall will occur within the next couple of weeks, Jackson said. That property will be turned into a green space and, with Regents approval, would be named Woods Park, in honor of the former university president. Jackson added that the university will try to preserve the large, old trees on the property.

Renovations in the Curris Center include a new Starbucks and Chick-fil-A. The parking lot will also be "completely redone and revamped." Other projects include the Einstein Bagels in Waterfield as well as an HVAC system update in that building.

This story was updated to include the number of employees in custodial and grounds.