Central Michigan University is facing another significant budget crisis, this time relating to unfunded pension liability.
According to an audit report by Plante Moran presented to the Board of Trustees at Thursday’s meeting, the university faces an estimated $100 million liability to retirees. This figure does not include the health care aspect of the retirement program, and it will start to reduce CMU’s unrestricted net assets beginning in June 2015.
The number has ballooned in recent years, according to the audit report, because less revenue flowing through the university has forced more faculty to retire, thus putting more strain on CMU’s retirement funds.
Check back with CM Life on Monday for more on the liability.
Ross: ‘The sky is not falling’
In his report to the board, University President George Ross acknowledged the long-term problems CMU faces, including enrollment issues and the unfunded retirement liability. However, he said he is optimistic about the future of CMU.
“Do we need to manage our budgets in response to current enrollment, without impacting the quality of teaching and student learning? Of course we do, and we are,” Ross said. “Is the sky falling? It most definitely is not.”
He pointed to CMU being recognized as a tier-one academic institution in the country by U.S. News and World Report and the College of Business ‘ New Venture competition being ranked as the nation’s top educational program by Automotive Alley as signs CMU is heading in the right direction.
The challenges facing CMU are testing colleges and universities across America,” Ross said. “At the same time, the vicissitudes of higher education, while daunting, also provide opportunities for rethinking and strengthening who we are as we shape the future.”
Other Board of Trustees notes:
- The board approved a new Global Campus center in Columbus, Ohio. CMU’s current Columbus location is at a military installation in town, making access to the location by non-military civilians difficult. The new center will not cost the university more than $72,120 per year.
- The trustees approved a year-round practice location for the new women’s golf team. For more, see Extra Points on page 9.
- This was the first board meeting for Trustee Patricia Mooradian, the president of the Henry Ford museum in Dearborn. She was appointed to the board in August by Gov. Rick Snyder to replace Patricia Maryland, who resigned in July to take a new position at Ascension Health.
- It was also the first Board of Trustees meeting for Provost Michael Gealt, who began his new job last month, and the final meeting for Vice President of Finance and Administrative Services David Burdette, who will vacate his position at the end of the month.
- Staff Reporter Ben Solis contributed to this report.