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State Officials Criticize UMass Privatization Plan


AMHERST – The University of Massachusetts Amherst is still pursuing plans to move about 100 public, unionized jobs to the non-unionized private nonprofit UMass Amherst Foundation, despite recent statements by elected officials urging the school to consider other plans.

The affected employees work on fundraising and marketing projects for the school’s Advancement office, and are represented by two unions, the Professional Staff Union (PSU) and the University Staff Association (USA). University officials announced the proposed change in an email to Advancement staff earlier this year, saying the move was necessary to keep the university in compliance with state and federal pension laws, and to secure the retirement accounts of employees already enrolled in the state system. Both claims have been disputed by the unions.

US Congress member Jim McGovern, state senator Jo Comerford, and state representative Mindy Domb released a joint statement last week urging the university to drop the plans to privatize the jobs. 

“Based on the nature of the work that these individuals perform, and have performed, their eligibility for state pensions has been validated and, in doing so, their public employment and retirements are no longer at risk,” they wrote. “If there are issues that extend beyond the pensions of these employees, we are confident that a resolution can be developed and, through good faith collective bargaining, executed.”

Staff at both the Advancement office and the UMass Amherst Foundation work on marketing and fundraising to support UMass students, faculty, programs, and facilities. According to state law, employees of a public college cannot spend more than 25% of their working hours on projects related to an affiliated private foundation. University officials claim that most Advancement employees’ work exceeds this limit, and that most jobs in the office should therefore be transferred to the Foundation.

However, union members estimated that fewer than 10% of their members are out of compliance with these standards, and say management is refusing to return to the bargaining table to find a solution that maintains their status as state employees. In a joint press release, the unions state that the change would move Advancement office’s $13 million annual budget “beyond the reaches of state accounting oversight and public scrutiny.”

Arwen Staros Duffy, who serves as both UMass’s vice chancellor for Advancement and the executive director of the UMass Amherst Foundation, told the staff of the proposed changes to their employment on February 18. The Massachusetts State Retirement Board (MSRB), she said, had set a deadline to submit a plan for compliance by February 20.

“I write to share that, regretfully, the University, USA, and PSU have been unable to reach an agreement on a reorganization plan,” she wrote. “To meet MSRB’s February 20 deadline, the University will submit a plan that necessitates ensuring that the UMass Amherst Foundation, not UMass Amherst, performs most of the advancement and fundraising work to maintain legal compliance moving forward.”

“[T]hese positions are not being lost,” she continued. “[T]hey are being moved for compliance reasons and in the interest of protecting your past and future retirement contributions.”

Tremendous Misunderstanding

Last month members of the two unions staged a demonstration outside the Whitmore Administration building against privatization of the Advancement office jobs, and potential loss of their pensions. 

“The university is still bound by its agreements with the union around the Advancement division, and no state agency is going to rescue them from their obligation to bargain with the unions,” said PSU co-chair Andrew Gorry.

In a March 27 statement, Comerford and Domb wrote that they were “not convinced that UMass Amherst’s plan to restructure is needed,” and publicly urged UMass to seek other alternatives. The state legislators weighed in three days before the regular meeting of the MSRB, the state governing body that oversees retirement eligibility.

“As legislators who represent UMass Amherst and its people, we are gravely concerned about the 100 employees at UMass Amherst – many of whom are our constituents – whose positions focus on building support for the university,” they wrote. “Their state jobs, careers, and retirements are on the line as the flagship campus endeavors to move their positions to a private entity.”

At the virtual meeting last Thursday, MSRB members noted an unusually large number of people present, voted to move the UMass item up the agenda, and discussed it for about five minutes. 

State treasurer Deborah Goldberg, who chairs the five-member board, assured attendees that UMass employees’ money already paid into the state pension system is not at risk of being lost, but warned the compliance issue would need to be addressed moving forward. 

“These employees will retain what pension-creditable service they have earned through the date of UMass Amherst’s anticipated restructuring,” Melinda Troy, the MSRB’s director of legal services, said at the meeting. “To date, with the exception of one employee, the individuals who have been enrolled in the state retirement system have appropriately been entitled to membership in the system, in part due to a state law which permits them to do some limited work for the foundation in the course of their state employment.”

Goldberg called the idea that UMass employees could lose their existing pensions a “tremendous misunderstanding,” and said that the compliance problem is “100% UMass Amherst’s responsibility” to resolve. She and other members said they did not plan to take any action to bring the school into compliance.

“I personally feel very badly that their employees have been confronted with a confusing, disruptive, and stressful situation for them and their families,” Goldberg said. “I advise and strongly encourage UMass Amherst to resolve this as soon as possible with the clarity and the empathy their employees rightly deserve.”

Increased Urgency

“Today’s emphatic statements by the Treasurer and the state retirement board put an end to

the university’s deception,” Gorry said after last Thursday’s meeting. “Their justification to privatize these jobs clearly holds no water.”

According to the MSRB, UMass officials first reported the problem to the state.

“The university became aware of the issue as a result of another pension matter and immediately began a review to determine whether UMass employees would be impacted,” UMass spokesperson Edward Blaguszewski said in a statement. “All of the positions moving to the UMass Amherst Foundation were determined to have compliance issues that put employees’ pension and retirement eligibility at risk.”

Blaguszewski told The Shoestring that the university’s legal team reviewed corporate documents, job descriptions, and job offer letters to determine that the jobs did not comply with state law. The MSRB has not conducted its own assessment of the employees’ eligibility.

“As far as I know, we’ve been given no information other than a letter from a law firm hired by UMass,” MSRB member Theresa McGoldrick said at the March 30 meeting. “There’s no information or evidence to show whether they do that kind of work or not, whether there’s been any violation in statute, and for that reason, we’re not acting on this we’re simply saying it is UMass’s issue to fix.”

In a letter to the university, the MSRB had said that having staff in non-compliant positions paying into the state pension system could be “problematic” for the Massachusetts State Employees’ Retirement System, which must follow guidelines set at the federal level by the Internal Revenue Service (IRS). 

“If ineligible members are permitted to participate, the entire plan risks losing its status as an IRS-qualified retirement plan, jeopardizing the retirement system and the associated benefits for all of its members,” Troy explained at last week’s meeting. 

The next day, Comerford and Domb – this time joined by US representative Jim McGovern – again issued a statement calling for the university to end the privatization plan.

“Thanks to the Treasurer’s statements, it is clear that this is 100% UMass Amherst’s responsibility to resolve,” they wrote. “As a result, with increased urgency, and based on University officials’ comments that their plan was based on the need to secure these retirements, we call on UMass Amherst to immediately abandon its plans to eliminate and privatize these public positions and to announce a renewed commitment to work with the union to protect these employees’ careers and futures.”

The legislators also urged the MSRB to document in writing the fact that each Advancement employee is eligible to collect their pensions earned thus far.

Blaguszewski said that if the plan goes forward, Advancement employees would not need to reapply for their jobs at the Foundation, and that any who wish to remain public employees can discuss opportunities to do so with the university’s human resources office. 

UMass officials did not answer additional questions from The Shoestring about how the work of the Advancement office is distinguished from that of the UMass Amherst Foundation, or other details about the proposed changes.

“The university will not be making any additional comment at this time,” Blaguszewski said.

A version of this article was published in the Montague Reporter. Photo courtesy of the author.

Sarah Robertson is an independent journalist living in western Mass.

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