A lawsuit filed on Jan. 4 by Southwestern Michigan College (SMC) against the Michigan’s Office of the Auditor General was dropped after a new law changed how community colleges in the state should give to a state-run teacher retirement program.
The college decided to file the suit after an investigation by Michigan’s Office of the Auditor discovered Southwestern Michigan College did not contribute to the retirement system for student employees. As a result, all Michigan colleges are now required to report their contributions to the Office of Retirement Services.
The new legislation changed how state college’s monetary support would be calculated in the future and the unpaid funds was paid by the college, a Southwestern Michigan release stated.
The office investigated claims that Southwestern Michigan intentionally excluded part-time student employees from enrollment into the state’s teacher retirement program, Michigan Public School Employees’ Retirement System, according to MLive.
In September 2018, the state’s Office of Retirement Services released a report that showcased estimates of unpaid monetary support, late fees and ensued interest.
According to the report, Southwestern Michigan paid $257,569, including more than $210,000 in retirement contributions and left over late fees and interest.
The new law, signed by former Gov. Rick Snyder, closes this statewide issue and provides “certainty” to Southwestern Michigan and relief from the faulty interpretation of the office’s report, said SMC president David Matthews in a release.
“SMC has begun the process of withdrawing the college’s lawsuit against the OAG so that we can focus entirely on our mission of providing affordable access to high-quality education to the community,” Matthews added.
Under the new legislation, all 28 community colleges across the state are now required to pay for four years of contributions plus late fees and accrued interest.
Estimated unpaid contributions from other schools in Michigan included:
- Glen Oaks Community College: about $11,000
- Grand Rapids Community College: about $93,000
- Kellogg Community College: about $178,000
- Kalamazoo Valley Community College: about $330,000
