Michigan Tech President Protests MPSERS Cost

March 7, 2013

Houghton, Michigan - Michigan Technological University, like six other public universities in Michigan, must pay a whopping bill each year to a state retirement system in which employees hired since 1996 have not participated and cannot participate. And the amount the University must pay is growing every year. Last year it totaled more than 14 percent of the state appropriation that Michigan Tech received.

The Michigan Public School Employees Retirement System (MPSERS) cost Michigan Tech $5.75 million last year, although the University opted out of MPSERS in 1996, and no employee hired since then has had the option to join that retirement system.

“We are required to pay for employees who would have been in MPSERS, even though they could not join, have not joined and will never receive a dime in benefits from the program,” said Michigan Tech President Glenn D. Mroz, testifying before the House Appropriations Committee Higher Education Subcommittee in Lansing today.

Over the past decade, state appropriations to Michigan Tech have dropped 24 percent, while the cost to students of higher education—particularly in the sciences, technology and engineering—has skyrocketed. The fiscal pain is compounded by having to return nearly $6 million of a shrinking state appropriation to meet the University’s MPSRS requirement, Mroz said.

Last year, Michigan Tech and the other MPSERS universities thought the Legislature had solved the problem by amending the law, capping part of the MPSERS payments. But the Office of Retirement Services chose not to apply the cap to the MPSERS universities.

“If Michigan Tech were treated the same as K-12 districts and community colleges, the University would save $3.6 million,” Mroz said. “We need legislative clarification of the act regarding MPSERS payments. We’re asking you to level the playing field in controlling costs by treating the MPSERS 7 the same as the 900 other groups in the MPSERS system.”
For the full story, see http://www.mtu.edu/news/stories/2013/march/story85727.html

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