Central Michigan University has received a one-time payment of $32 million from the Michigan Office of Retirement Services to correct an error made by the state in assessing pension fund payments the past 19 years.
State officials say the error occurred each year when some of the payments made by seven universities to the Michigan Public School Employees Retirement System were incorrectly reported. The error continued, despite ongoing review by the state’s independent auditors, two actuary firms, the state Auditor General and retirement services office.
Barrie Wilkes, vice president of finance and administrative services, said the funds — the overpayment plus accrued interest — were received Wednesday afternoon.
“We for years have questioned the size of payments we were required to make, but we were assured the assessments were accurate,” Wilkes said. “It’s disappointing that it happened, but obviously we are pleased the situation has been rectified.”
CMU still is about to record an expected $93 million in long-term liability to the same retirement system this fall, as required by the Governmental Accounting Standards Board (GASB 68). The university’s external auditing firm, Plante Moran, is estimating CMU will owe an additional $40 to $50 million in health care liability by 2018.