Baileyville school employees suing over loss of retirement plan

Posted May 17, 2011, at 11:27 a.m.
Last modified May 17, 2011, at 3:51 p.m.

BAILEYVILLE, Maine — Ten current and former Baileyville school system employees are suing the town, the school system and the school board for not having informed them of their right to participate in a state pension plan.

Portland attorney Donald Fontaine said the civil suit was filed first in Washington County but then moved to federal court in Bangor last week.

He said the 10 people include bus drivers, teachers’ aides, janitors, secretaries and food workers, and that some of them have worked for the school system since the 1980s. Most were hired in the 1990s.

Fontaine said the employees were entitled for all those years to participate in the Maine State Retirement Program but were never informed of their qualification by either the town or the school system.

“They have in essence lost their opportunity to have a retirement plan because so many years have gone by,” Fontaine said. During the past 15 to 20 years, none of the employees contributed to the plan and neither did the town or school system.

Those filing the suit are: Kathryn Curtis, Phyllis Carr, Carelton Davis, Mary Day, Michael J. Emery, Jeanne Graceffa, William Gierlich, Gary Johnson, Diane Kneelend and Darlene Norman.

The town and school system have not formally responded to the lawsuit.

Baileyville Town Manager Linda Pagels said the town was added in the lawsuit because it and the school system share the same employee identification number and are both part of the same retirement program. She said the town had a similar situation several years ago with town employees that ended up costing the municipality $700,000.

Luckily, she said, Baileyville had a $900,000 credit with the Maine State Retirement System and therefore did not have to expend any cash. This time, Pagels said, the town and the school system could jointly have to pay $300,000 or more if they lose the lawsuit.

“This is disappointing and unfortunate,” she said.

Fontaine said all of the affected employees were offered the opportunity to pay their full share of the plan for the years they were not participating, but that represents a sum of $20,000 to $30,000 for some of them.

“A few of the plaintiffs who were able to borrow the money to pay the back employee contributions have indebted themselves, cashed other retirement investments and incurred other costs,” Fontaine said.

The lawsuit requests all the money that would have been earned in the retirement fund be repaid to the defendants, including the employer’s share. Fontaine said he has not tabulated the full amount of that repayment but it could run into the hundreds of thousands of dollars.

“This is going to be a long process,” Fontaine said. “This problem was just discovered several months ago.” Fontaine said that unfortunately, the situation is not unusual. “Frequently towns and school systems fail to inform their employees of retirement opportunities,” he said.

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