To: Timothy J. Nelson From: Hollie,Vicki, Marguerite Date: April 20, 2015 Subject: Communication to Campus for EDUStaff and Board Update

Transcription

1 Lifelong & Professional Learning To: Timothy J. Nelson From: Hollie,Vicki, Marguerite Date: April 20, 2015 Subject: Communication to Campus for EDUStaff and Board Update This is an update on the work to date investigating the potential benefits and concerns of entering into a partnership with EDUStaff to oversee administration of adjunct and supplemental contracts for NMC. This document includes: Background Why NMC is investigating this approach Common questions from the informational sessions Answers to common questions Questions being investigated Summary of MPSERS retirement plans Next steps in the process Background At the regular March meeting, we presented to the Board our intention to begin investigation of this option and to general information sessions. Four employee meetings were held on April 13 th and 14 th to discuss potential options for employees and to gather initial questions and feedback. A representative from EDUStaff presented their information and processes and NMC HR personnel were present to answer questions regarding the state retirement program. 1

2 As a result of these meeting there are additional questions that need to be researched. During the next month we will: Provide a Board Update on April 20 th Investigate and respond to questions raised during the informational sessions Make a recommendation to proceed or not proceed at the May 18 Board of Trustees meeting. (Note: We had anticipated making a recommendation on April 20 th but additional investigation is needed before making a recommendation) Why do we want to investigate this? Two consistent issues for adjunct and supplemental employees has been: Pay rates Affordable access to retirement and other benefits We have made changes in this area during our compensation review but this relationship could provide additional relief in both areas. Additionally, the state has provided better access for these two groups. Retirement expense continues to be a significant cost to the institution and this relationship could provide significant relief in those expenditures. The investigation will identify the pros and cons of providing this choice to the employee groups and the institution. The following list represents the questions from the information sessions and through . As noted there are several questions that need further investigation and answers prior to formulating any recommendation to the Board of Trustees. 2

3 Common Questions 1. What is EDUStaff? 2. Is this Outsourcing? 3. Why EDUStaff? 4. How is EDUStaff paid? 5. What is the relationship between NMC and EDUStaff? 6. What is the relationship with the employee and NMC? 7. What is the relationship with the employee and EDUStaff? 8. How do I access information regarding my retirement plan? 9. What is a service year? 10. How long does it take to vest? 11. If I am 60 does it take less time to vest? 12. What happens if I request my contributions from MPSERS? 13. Who has a choice to go to EDUStaff or stay with NMC? 14. Can I move from EDUStaff to NMC? 15. Can I become an NMC full-time employee? 16. When do I need to make my decision? 17. How is the increase in pay calculated? 18. How was the calculation of NMC savings determined? 19. What is NMC s liability for retirement system payments? 20. If an employee of EDUStaff returns as a fulltime employee of NMC, can they enroll in MPSERS? 21. Will special consideration be given to new, part-time employees who are vesting with MPSERS? 22. Can I wait a year to switch to EDUStaff? 23. What happens if a group is interested in Unionization? Answers to common questions 1. What is EDUStaff? EDUStaff is a Michigan company based in Grand Rapids, specializing in contract management for part-time employees of the K-12 system and public colleges. EDUStaff provides for an optional 401K and access to health insurance as required through the Affordable Care Act (ACA). 2. Is this Outsourcing? No. NMC is responsible for the selection of the employee, the rate of pay and the performance evaluations. In a traditional outsourcing environment NMC would not be responsible for setting those working conditions or the selection of the employee. Based on accreditation standards NMC must retain responsibility of employee performance. 3

4 3. Why EDUStaff? EDUStaff is currently working with seven Michigan community colleges. They do not charge fees to the employee, invoicing colleges directly for services related to contract management. The reviews from the other community colleges have been excellent. You cannot compare reviews of K-12 substitute teacher contract arrangements with the arrangements that have been established with the Michigan community colleges for this service. 4. How is EDUStaff paid? EDUStaff is paid by the contracting college. The college is invoiced for the total costs associated with the EDUStaff employee and an administrative fee. The current administrative fee is 4%. 5. What is the relationship between NMC and EDUStaff? This is a contractual relationship. NMC is responsible for the selection of the employee and establishing working conditions. As described in question 6 below. 6. What is the relationship with the employee and NMC? Employees selecting this option will become EDUStaff employees for the purposes of administering their payroll. All EDUStaff employees retain their working relationship with NMC in terms of pay rates, supervision and evaluation, professional development, participation in college events. Adjuncts continue to access their NMC tuition benefit. 7. What is the relationship with the employee and EDUStaff? Once enrolled as an employee of EDUStaff, the employee has access to required professional development (such as compliance related courses for blood-borne pathogen handling, or drug & alcohol awareness, etc.) and access to EDUStaff benefits such as an optional 401K or health insurance meeting the minimum ACA standards (Affordable Care Act). EDUStaff provides guidance to employees seeking additional employment opportunities through their community college pool (an employment opportunity directory). 4

5 8. How do I access information regarding my retirement plan? The table on Page 7 summarizes the MPSERS plans and the link to the detailed information. 9. What is a service year? A service years equals 1,020 hours. Please see the table on Page 9 to see how this equates in contact hours. 10. How long does it take to vest? MPSERS plans established prior to 2012 require 10 service years to vest. The most recent MPSERS plan requires 4 service years. If you work part-time your service years do not equate to years employed. 11. If I am 60 does it take less time to vest? If you are in the MIP plan you may be able to vest in 5 service years. You qualify for a pension if you have creditable service (1,020 hours earned in the school year) earned in each of the five school years immediately before your retirement effective date. You must work within the month of your 60 th birthday. 12. What happens if I request my contributions from MPSERS? You will be required to fill out the MPSERS refund application and designate what will happen with your refund. You can take the distribution directly (which may be subject to penalties) or roll it into a qualified retirement plan. If you withdraw your contributions you will lose all service credit in the MPSERS system. If you become employed in a Michigan public school again your service credit would reset to zero. If you do not withdraw your contributions your service credit will remain at the same level. 13. Who has a choice to go to EDUStaff or stay with NMC? If approved, the EDUStaff option is available to Adjuncts and part-time supplemental employees only. Based on our findings, we do not believe this is an option for NMC retirees who have returned on a supplemental basis. Full-time employees who teach a course as an adjunct may consider this for their adjunct contract. 5

6 14. How was the calculation of NMC savings determined? The savings was calculated using 2014 wages paid to adjunct and supplementals. The total cost to the employer for social security, workmans compensation and retirement is 34.6%. The costs charged by EDUStaff including the administrative fee is 17%. 15. How is the increase in pay calculated? NMC is planning to pass on some of the savings to the employee. The current expectation is that employees choosing EdUStaff will see an 8% increase in their pay rate. 16. What is NMC s liability for retirement system payments? In 2014 the contribution to MPSERS was $4,566,526. The employer rates ranged from 20.96% to 24.32% paid on total wages for employees in MPSERS retirement plans. Please see attached chart that identifies plans, employee rates, employer rates and service years to vesting. Please note that even in a plan that the employee does not contribute the college must pay at least 20.96% of gross wages. Questions being investigated 17. Can I move from EDUStaff to NMC? 18. Can I become an NMC full-time employee? 19. When do I need to make my decision? 20. If an employee of EDUStaff returns as a fulltime employee of NMC, can they enroll in MPSERS? 21. Will special consideration be given to new, part-time employees who are vesting with MPSERS? 22. Can I wait a year to switch to EDUStaff? 23. What happens if a group is interested in unionization? Our HR staff will be able to inform you where and how to navigate through the MPSERS system. MPSERS determines your status with the retirement system, your years of service credit, and the most current interpretation of rules. Nothing will be as effective as your own research. The recording from the 1 st session is now available for viewing. 6

7 Summary of MPSERS retirement plans Retirement Plan Employee Contribution NMC Contribution Vesting Retiree Health Care Employee Contribution NMC Match To MPSERS To You Basic None 25.78% 10 years 3% Subsidy Health Care n/a Basic 4% 4% 25.78% 10 years 3% Subsidy Health Care n/a Basic DC converted None 21.47% DB:10 yrs 3% Subsidy Health Care n/a 20.96% DC: 4 yrs 2% Personal Health Care MIP Fixed 3.9% 25.78% 10 years* 3% Subsidy Health n/a MIP Graded** 3%, 3.6%, 4.3% 25.78% 10 years* 3% Subsidy Health n/a MIP Plus** 3%, 3.6%, 6.4% 25.78% 10 years* 3% Subsidy Health n/a MIP 7% 7% 25.78% 10 years* 3% Subsidy Health n/a Pension Plus** 3%, 3.6%, 6.4% 24.70% 10 years 3% Subsidy Health Care n/a 24.19% 2% Personal Health Care w/ Savings 2% 1% Defined Contribution None 21.47% 4 years 3% Subsidy Health Care 4% 7

8 (Election Reform) 20.96% 2% Personal Health Care 2% After Sept 2012 Defined Contribution 6% 21.47% 4 years 3% Subsidy Health Care 3% (Post Election) 20.96% 2% Personal Health Care 2% Before Sept 2012 *MIP 60 with 5. If you are age 60 and you have at least 5 years of service, you qualify for a pension if you have creditable service earned in each of the five school fiscal years immediately before your retirement effective date and you terminated your public school service immediately before your retirement effective date. A school fiscal year runs from July 1 through June 30. Note: You must work within the month of your 60th birthday. Creditable service In general, you earn one year of service when you work 1,020 hours within the July 1 through June 30 school fiscal year. **Increase in percentage of contribution is related to your range of compensation in each fiscal year. First % ($0-$5,000), Second % ($5, $15,000), Third % ($15, and over) This chart is for information purposes only- please consult with the Office of Retirement Services before making decisions on your retirement plan 8

9 Adjunct Faculty Hours Reported to MPSERS Area: Academic Course Applied Music Ensembles Phys Ed Independent Study Multiplier: 2.25 hours per week, per contact 0.5 hours per week, per contact 2 hours per week, per contact 1.5 hours per week, per contact 2.5 hours per contact, per Time frame: 15 week 15 week 15 week 15 week 1 One Contact reported to MPSERS is: hours 7.5 hours 30 hours 25.5 hours 2.5 hours Sample Scenarios: An adjunct who teaches 6 (academic course) contact hours for the the calculation is: 6 contact hrs x 2.25 hours per week x 15 weeks = hours for the. An adjunct who teaches 4 Phys Ed contacts for the the calculation is: 4 contact hrs x 1.5 hours per week x 15 weeks = 90 hours for the. 9