Retirement Contribution Error

SHARE has been notified by the University of Massachusetts that they made an error in not deducting retirement contributions from some kinds of “specialty pay”.

What kinds of pay did not have the required retirement deductions?

·       Evening, night and weekend shift differential

·       Holiday pay (straight time)

·       Animal Care Technician certification pay

·       On Call pay

Who is affected?

This is a University-wide error, affecting approximately 3,250 employees in 29 unions across all UMass campuses. About 150 SHARE members are potentially affected.

What does this mean for SHARE members who earn this kind of pay?

Starting in January, the University will withhold retirement deductions from these kinds of specialty pay, and transmit them to the State Retirement Board.

Will the missing deductions have to be repaid?

That is still being worked out. The Unions’ position is that the University should pay the missing contributions. The University wants the Massachusetts State Retirement Board to forgive at least part of the missing contributions, and to bill the employees for the rest. The Massachusetts State Retirement Board has not yet decided how to handle repayment.

What happens next?

In January, the University will send a letter to each employee who is affected, informing them that these deductions will be made going forward. The letter may also include an estimate of the amount of deductions that were not made for that employee, but should have been made. This does not necessarily mean that the employee owes that amount of money. The unions are still opposed to making the employees pay the missing deductions.

Why did this happen?

The University is supposed to take a pension deduction from “regular compensation”, like base pay, and transmit that money to the Massachusetts State Retirement Board. Other types of pay, like overtime, are not considered “regular compensation”, are not part of an employee’s pension calculation, and so do not have pension deductions taken out.

The University did not consider shift differential, holiday pay, on call pay and certification pay to be “regular compensation” that counts toward a pension. The Massachusetts State Retirement Board has informed the University that these are “regular compensation” that count toward pensions, and therefore must have pension deductions taken out.