Friday, March 6, 2015

THE DEFECTIVE 2007 LAUSD PAYROLL SYSTEM IS STILL A THREAT TO YOUR RETIREMENT by Mark Hemphill - Perdaily.com

THE DEFECTIVE 2007 LAUSD PAYROLL SYSTEM IS STILL A THREAT TO YOUR RETIREMENT by Mark Hemphill - Perdaily.com


When I first retired, things went as might be expected. There were a few minor adjustments in my payments but they became stable about six months later. That was until last May, because on June 1st the retirement payments I received covering the month of May showed a $263.00 reduction from the previous payments. I immediately sent out an inquiry to STRS. I supplied check numbers for June 1st and the numbers for previous checks to demonstrate the discrepancies. But before receiving a response, I received an update on my retirement payments from STRS on June 9th. It stated figures that were $323.00 more than what I had just been paid along with a statement that, " Your monthly benefit has changed from estimates or payments you previously received. The change is either a result of additional employer reporting or an internal correction to your account." It then stated a new figure that it would commence on July 1st and continue for my lifetime. However, the statement also showed that my service years had been reduced to below twenty five years and, to make matters worse, the payment I received on July 1st, which were to cover the month of June, were at the same lower figure of the June 1st payment. By now I also received a reply to my original inquiry from STRS. In response, I made them aware of the recent documents I had received from them and how contrary they were to the actual payments. The STRS representative suggested that I contact the Employee Service Office at LAUSD, which I did by email and phone. I spoke with a representative who asked me to scan and attach the documents from STRS into an email and to send them to her and she would forward them to a representative in the Retirement Unit. She also made an appointment for me with the Retirement Unit for July 19th. I contacted that unit this morning to secure a progress report on my inquiry. The representative offered to go over the report over the phone to save me a trip and then to email a copy to me. It turns out that the anomalies in my retirement payments, estimates and service years stem from the new payroll system of 2007. The Retirement Unit and Employee Service Office have recently done two "projects" to try to correct these errors. As it turns out, I'm indeed over the twenty five year mark and I qualify for retirement based on the single highest salary year. That figure was also wildly in error and had to be corrected. As it stands, my retirement is supposed to be substantially higher than what I've been receiving since payments started and what was reported on June 9th. The necessary corrections will go out to STRS officially on July 20th. End of story? Not quite yet.

I thanked the Retirement Unit representative and asked her if her office had been receiving many inquiries similar to mine. She responded that there were some and they were increasing but that many didn't work out favorably like mine. This suggests that there are probably a lot of retirees who have experienced these reductions and aren't speaking up about them. It also strongly suggests and another issue. The payroll system of 2007 was hopelessly flawed. Who's to say how many errors persist? How can the district possibly penalize retirees within a system so flawed by their own errors? How is the payroll unit calculating these revisions? Are they based on school years starting July 1st of one year and ending in June of the next or is it some other formula? What about those like me who have money coming to them that has been delayed? Where's the interest for loss of availability and future value? And if teachers had over reported salary years, then didn't they over pay in taxes to the Internal Revenue Service and the State Franchise Tax Board? So if you're retired and have suffered reductions in your retirement payments, you need to start your inquiry to the Retirement Unit. If you're thinking of retiring, you better secure your years of service and make sure they're verifiable. That payroll catastrophe of 2007 is anything but gone.

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