ANN ARBOR, Mich. — Washtenaw Community College could save about $1 million a year by removing 1,100 part-time employees from the payroll and rehiring them as contract employees, an idea that President Larry Whitworth has recommended to the board of trustees, according to AnnArbor.com.

The change would mean the college would no longer have to contribute to the state retirement system on behalf of those employees, according to the report. Whitworth told AnnArbor.com that the employees would not lose retirement benefits, because none would ever have become vested in the system.

Whitworth told AnnArbor.com that he also supports Senate Bill 802, a separate plan that would allow the college to enroll all new employees in a defined contribution retirement plan rather than the current defined benefit plan managed by the state.

The college will have to pay an amount equal to 19.4 percent of payroll this year into the defined benefit plan, the Michigan Public School Employees Retirement System, AnnArbor.com reported. That equals $9.8 million, up from about $3 million a decade ago, Whitworth told AnnArbor.com.

Brit Satchwell, president of the Ann Arbor Education Association, told AnnArbor.com that he opposes the bill because, if community colleges opt out of the state retirement system, then the K-12 school system would have to pay more in order the provide the promised benefits.

Chuck Agerstrand, the retirement consultant for the Michigan Education Association, the statewide teachers union, told AnnArbor.com that the MEA will fight the proposed legislation and that the state should have done a better job of managing the retirement fund.

SOURCE:
AnnArbor.com, "Washtenaw Community College considers converting part-time faculty to contract employees to avoid state pension contribution," Aug. 7, 2010

FURTHER READING:
Michigan Education Report, "15 Specific Ideas to Move Michigan Forward," June 7, 2010

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