Providing clarity

There have been recent accounts of an Auditor General report citing Southwestern Michigan College for failing to enroll and withhold retirement from part-time student workers.   

As board treasurer, I wish to provide some clarity:

The law governing the state teacher’s retirement system is Public Act 300 of 1980 entitled “The public school employees retirement act of 1979.”  Section 5(c) specifically excludes “An individual employed by a reporting unit while enrolled as a full-time student in that same reporting unit.”

As a result, full-time students who work on campus are exempt from having State of Michigan teachers’ retirement contributions withheld from their checks. 

While Public Act 300 addresses full-time student workers, it is mute as to part-time students who work on campus.  Also noteworthy, both state and federal student worker statutes exclude full-time and part-time students who work on campus from participation in the unemployment system and social security withholding system.

In 2011, the SMC human resource manager contacted the Office of Retirement Services for clarification concerning part-time student workers.  The inquiry, as documented in a sworn affidavit, states that the ORS concurred that a student worker would be exempt from participation in the retirement program whether they were full-time students or part-time students.

SMC has since consistently reported the exemption of part-time student workers and has been audited by the ORS with no findings. 

The college is working to resolve this conflicting information.  Legislation has already been introduced to clarify the public-school employees’ retirement act to specifically exempt part-time students. 

Ongoing updates will be provided as more information becomes available at swmich.edu/taxpayer-information, or in the main menu of the college’s website swmich.edu under the tab named “About SMC.”

Becky Moore, CPA

Treasurer, SMC Board of Trustees

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