AUBURN — Money that has vanished from Auburn teacher and school staffers’ retirement accounts, due to mix-ups by retirement firms and a newly hired money-handler, may soon reappear.

“We’re told that they’ll make it right,” said Jude Cyr, business manager for the Auburn School Department. “No one will lose money. We have our records, so we know.”

Since the start of the year, some payments to retirement accounts have been diverted to the wrong company or lost in a bureaucracy of numbered accounts, changes in the law and decisions by companies to get out of the teacher retirement business.

“It’s not that the money’s gone,” Cyr said. “It’s been shuffled around and you have to follow the trail.”

The problem began on Jan. 1, when the Internal Revenue Service changed the rules for public school workers’ supplemental retirement accounts. The nationwide change shifted the work to schools to make sure rules for withholding were followed.

“What the IRS created was a nightmare,” Cyr said.

School departments around the country, including Lewiston and Auburn, chose to contract with money-handlers to act as middlemen between the individuals and more than a dozen retirement providers. 

Auburn chose Gatekeeper Administration & Consulting of Flagstaff, Ariz. So did many other schools. By February, problems were popping up. At first, the company was responsive to problems, Cyr said.

Then, it became overwhelmed. By April, calls went unanswered, Cyr said. Meanwhile, people were getting worried that their money had gone for good. 

“It has been a source of discouragement and deliberations and fact-finding,” said Thomas Morrill, superintendent of Auburn schools.

In Lewiston, there have been no such problems with the company, said Tom Jarvis, human resources director for the Lewiston School Department.

Neither has the problem become a big headache across the state. Mark Gray, executive director of the Maine Education Association, said he was unaware of Gatekeeper’s problems.

In Auburn, warnings were circulated to employees enrolled in supplemental retirement plans as early as March, Cyr said. He asked people to check their statements. Of the school department’s employees, about 70 have such plans. Since the start of the year, between 20 and 25 percent of all money earmarked for those plans and withheld from paychecks has been lost for at least a while, Cyr said.

His own money was among the missing.

“I looked at my account and found withdrawals,” he said. He hadn’t made any.

Until May, the School Department was seeking legal advice for a possible next step. Then Gatekeeper announced it was being sold to a bigger company, CPI Qualified Consultants Inc. of Great Bend, Kan.

Calls to the company from the Sun Journal were unanswered Monday.

Cyr said he has been pleased with CPI’s workers and has been assured that all money will be found and, if needed, returned with interest. Already, some had been been found.

“It’s been hit or miss,” Cyr said. “About 15 people are still owed money.”

dhartill@sunjournal.com

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