It’s not every day that $9.4 million dollars drops into your lap, but that is exactly what happened to Northern Michigan University last week. The money is being returned to the university coffers as a result of pension system overpayments in prior years. This refund comes from the Michigan Office of Retirement Services which recently discovered that it had unintentionally overbilled NMU and six other Michigan public universities since 1997. The funds are unrestricted in how they can be used meaning that university administrations will have to decide how to best use the refunds. In an article published October 2, in the Mining Journal, NMU President, Fritz Erickson was quick to point out this sudden infusion of money is not going to change the administration’s view of the current budget. “It is important to understand that the funds being returned are not a windfall. They will need to be held in reserve and used for meeting our future MPSERS obligations,” Erickson said.
While the NMU administration appears poised to set aside all $9.4 million to cover pension obligations over the next twenty years, Assistant Professor of Accounting and NMU-AAUP Data Analyst George Wilson estimates that only a portion of the refund would be needed to completely cover NMU’s additional pension expenses associated with recent changes to pension reporting and payments for Michigan universities. “This refund was completely unexpected and is brand new dollars that can be used for an array of immediate and future needs. These funds represent a reprieve from the present deficit and should give the university time to make careful decisions about staffing, course offerings, and the range of experiences and opportunities we are offering to our students. We no longer need to rush into permanent structural changes when we now have the resources to solve what should be a short-term enrollment issue.”
The Executive Committee of NMU’s Chapter of the American Association of University Professors have endorsed Wilson’s comments calling them an accurate and articulate assessment of the present budgetary state of the university.
The $9.4 million refund arrives during a period in which the NMU administration had projected a deficit of $2.8 million for the current fiscal year.