HOUGHTON — As the result of a recalculation of liability on a state retirement program, Michigan Technological University and six other state universities, received several million dollars in refunds on Tuesday.
Michigan Tech President Glenn Mroz says the recalculation showed that the universities were billed more than needed to cover liabilities to the Michigan Public Schools Employees Retirement System for nearly two decades.
“ We stopped participating in MSPSERS in 1996, but have to continue to make payments to fund the pensions of participating members and will do so until the year 2036”
Mroz says during the calculation of an updated statement following new Government Accounting Standards Board rules, the Michigan Office of Retirement Services found that the seven universities have been overcharged for pension fund payments to MPSERS.
“Since 1997, some payments made each year by the universities were not included in the actuarial calculations and that resulted in an overestimation of what was owed to the pension fund on a yearly basis” Mroz says.
As a result, the seven MPSERS universities, including Michigan Tech, paid more money into the system than required by law and are entitled to refunds.
After discovering the error, the state Office of Retirement Services worked with actuaries to compute each university’s overpayment, including accrued interest. Michigan Tech has received $11,784,204, which includes both the amount of money the University overpaid to MPSERS plus all accrued interest since 1997.
Mroz says its important to understand the overpayment involves what the university is charged and not funds contributed by MPSERS employees to their pension accounts. “We greatly appreciate the quick response by the office of Retirement Services in addressing the overpayment issue. “
The funds will be used to fund the liability still owed to the MPSERS program through the year 2036.