Board of Regents to consider changing pay day

Amy Poppinga

Amy Poppinga

The way employees in the South Dakota regental system get paid could soon change, and this has some workers concerned about how that could affect their retirement.

The Board of Regents proposed a plan to move pay day from the last working day of the month to the first. The change would take effect in July 2009, and by changing the payroll date from June 30, 2009, to July 1, 2009, the state will push the expense for one payroll into a new budgeting and fiscal year. The one-time budget surplus will amount to $10.9 million.

The BOR is hoping to get the Legislature’s approval of the plan so it can move forward with a mobile computing initiative. This initiative would require all students at South Dakota’s public universities to rent or buy a mobile computer and would help universities move to wireless Internet environments.

Robert T. Tad Perry, executive director of the BOR, said many incoming students went to high schools that had mobile computing environments, and so if a university is less technologically advanced than their high school, the students will probably go somewhere else.

“If we want to compete for students, we have to make sure we have a technological environment,” said Perry.

Students will need to purchase or rent their own laptops, but the BOR needs the $10.9 million to train faculty to use technology in the classroom, update classrooms and set up a wireless system on all campuses.

Apart from raising money for the mobile computing initiative, the proposed pay date change will also affect some BOR employees’ pocketbooks. These employees will not lose any money from their paycheck, but for employees retiring in the next three years, their retirement accounts will be hit.

The South Dakota Retirement System (SDRS) figures employees’ retirement benefits based off their salary during the highest 12 consecutive calendar quarters (three years) in the last 10 years. For almost all employees, the highest 12 quarters are their final three years of employment. For those who retire in the next three years, though, the last 12 quarters will not be the highest because they will only receive 11 paychecks for calendar year 2009.

“Those people have to decide when it will be in their best interest to retire,” said Perry.

The BOR Executive Director said that the affect on retirement is controversial, but “the best I can do is give people facts.” He said the SDRS cannot make up any retirement money lost due to IRS regulations and federal employment laws.

This retirement situation has angered several employees.

Roger Olson, who works in the print lab, is within 16 months of retirement after currently being employed by SDSU and the BOR for almost 34 years. He said he decided his retirement date long ago, and so he is disappointed that he might have to change his plans now.

“Someone tells me I can still have that retirement date or I can work longer if I choose to ? but if I choose to keep that retirement date then the state is going to take $81 a month away from my wife and I,” said Olson.

“I kind of feel like I’m taking one for the team.”

Olson said the pay date change will cause his wife and him to lose about $40 a month each in retirement benefits. If he retired before July 2009 to avoid the pay date change, he and his wife would together get about $150 less.

“I kind of feel if the program is so wonderful and so necessary then quite possibly the state should appropriate the money, but not off the back of the career service people,” Olson said.

South Dakota Rep. Larry Tidemann of Brookings District 7 attended a recent meeting about the pay date change and agreed with Olson’s position.

“I do not want to see anything using the employees’ dollars,” he said. “I think that is a wrong approach. You don’t balance the budget on the employee’s back.”

Unfortunately, Perry said, there are not many other options. He said the state is already strapped for resources, and students would have to pay an additional $500 each to fund the project. If the BOR were to fund the project in a different way, it would have to cut roughly 400 positions system-wide.

Despite these concerns, Perry said that the benefits of the project should outweigh the costs.

“If we don’t do it ? what happens? No technology environments? I don’t think that’s in the best interests ? of the students, faculty, universities and even the employers of this state.”