Good news!
SHARE and the other UMass unions have been successful in significantly reducing, and in many cases completely eliminating, the amount that members will have to pay toward their pension to make up for the University’s retirement contribution error. According to the University’s estimates, only 32 SHARE members will still be affected.
University sending new letter to affected employees
In early January, 148 SHARE members got a letter from the University, explaining the error, listing the amount that had not been deducted from their pay but should have been, and alerting them that they might have to pay that amount back. Everyone who received a letter from the University will get a new letter in the next couple of days, with updated information. There is also a useful online FAQ.
What has changed?
We had several lines of argument in trying to reduce or eliminate the amount employees have to pay. The Retirement Board listened to all of them, and made the following decisions:
5 years instead of 17: The biggest impact on amounts owed came from the Retirement Board’s agreement to limit the look-back period to 2014-2018, instead of going back to 2002 or earlier. This decision means that employees will only be asked to pay the amount that could potentially increase their retirement benefit. It also brings the maximum amount owed by a SHARE member down from over $7,300 to under $2,700.
Under $500 waived: The Retirement Board has agreed to waive collection of any amount under $500. Employees who “owe” less than $500 will not have to pay anything. They also will not receive retirement credit for that amount, however the impact on retirement would have been small. This decision removed over 100 SHARE members from the list of affected employees.
Certification Pay and Holiday Pay won’t count: The Retirement Board agreed with us that Animal Medicine Technician Certification Pay should not be counted because it is not “regular” pay — it is only paid occasionally when a tech passes a certification exam. No one will owe retirement deductions on their certification bonus, and deductions will not be taken on the certification bonus going forward. This decision was made very recently, so the letter from the University will still say that certification pay counts, but the online FAQ will be up to date. Holiday Pay will not count either, as previously announced.
The University will pay administrative and other fees, and interest for the amounts owed:
If the amounts had been deducted on time, the money would have been earning interest. The University will pay the Retirement Board to make up for the interest lost.
If an employee chooses to repay what they owe as a payroll deduction, rather than a one-time payment, the Retirement Board will charge an administrative fee. The University will reimburse employees for that amount.
The University will also pay the Retirement Board some money to make up for missing fringe rate deductions.
the Retirement Board listened to union members
Although this solution is not perfect, it is a huge improvement over where we were when the error was first discovered. Importantly, it maximizes the retirement benefit to employees, while minimizing the amount employees need to pay.
The Retirement Board, under the leadership of State Treasurer Deb Goldberg, listened to what the unions had to say, did their research, and came up with a fair compromise. We thank them.
More Information from UMass and the Retirement board
This FAQ from the University has detailed answers to more than 20 questions
University System Office Human Resources: call 774-455-7150 or go to www.umassp.edu/hr
Mass State Retirement Board: email MSRB@umassp.edu or call 617-367-7770