Schools share pension woes
At least four districts in Texas and California have lost money in PCG-administered funds
At least four mainland school districts are having similar problems with a California company being sued by the Hawaii Department of Education over the disappearance of $2.28 million in DOE employee retirement funds.
Officials with the Texas independent school districts of Plano, Socorro and Friendswood, along with the Clovis, Calif., school district, say hundreds of thousands of dollars worth of employee money has disappeared under Plan Compliance Group, or PCG.
The company, based in Walnut Creek, Calif., transfers employee contributions into tax-sheltered annuity accounts, but failed to do so for some pay periods in September and October.
The missing funds amount to $380,000 for Plano, $280,000 for Socorro and $159,000 for Clovis.
The Friendswood, Texas, school district estimates its loss at less than $100,000.
"It may not seem like as much, but to our employees it's a lot of money," said Friendswood Assistant Super-intendent George Rodgers.
The various districts said PCG told them the company was hit with an unexpected tax levy by the Internal Revenue Service, resulting in its funds being frozen.
But the company has failed to explain how that would affect the annuity contributions, which are supposed to be deducted from employee paychecks and transferred directly into annuity accounts, they said.
"That money belongs to our employees and should not be affected by any levies against PCG," said Michael Johnston, assistant superintendent for business services with the 36,000-student Clovis Unified School District.
The four districts, along with the Hawaii school system and the University of Hawaii, comprise the lion's share of PCG's clients, according to a client list on the PCG Web site.
The Hawaii Department of Education filed suit in California Superior Court late last week against PCG and its president, Francis W. "Bill" Reimers, seeking the return of $2.28 million. The department said the missing money affects about 10,000 employees.
UH officials say $420,000 of its employees' money is unaccounted for and that the university also is considering filing suit.
The Plano Independent School District filed suit against PCG and Reimers in November, said Linda Madon, the district's executive director of financial services.
However, the company has repeatedly missed court-set deadlines to come up with the money or with documents proving PCG's claim that it is bonded against such levies, she said.
A final deadline has been set for Friday , and a hearing for possible contempt of court proceedings has been set for Dec.19, she said.
The various districts said they experienced no previous problems with PCG.
"(PCG) always had a really good track record with us, until recently," said Johnston of the Clovis school district, a PCG client since 1998.
A company receptionist yesterday said Reimers, on the advice of his attorney, was not fielding media calls.
The California Attorney General's Office declined comment yesterday on whether it was looking into PCG's practices.
Friendswood school district officials said they plan to file a lawsuit. Clovis is consulting with its attorneys on a next step, while the Socorro district remains in negotiations with PCG.
"We know they've had some financial problems but we remain hopeful they'll reimburse us," said Socorro spokeswoman Minerva Baumann.
The Town of East Bridgewater, Mass., another PCG client, has not experienced any problems, said the town accountant, Dorothy Richardson.
Efforts to reach several small Michigan school districts that contract with PCG were unsuccessful.