Unions Cannot File Grievance over 403(b) Changes

Whether unions representing Minnesota District 861 teachers and paraprofessionals can legitimately file a grievance over 403(b) plan changes is under debate.

The Winona Post reports that the teachers union and paraprofessionals union each have asked for arbitration after former school board chair Brian Neil informed them the grievances they filed are not appropriate. The unions’ complaint is over the reduction of 403(b) plan providers from 23 to five, effective January 1.

Neil told the unions in a written response to their grievances that the matter is not open to arbitration or grievance because it is an issue not governed by union contracts, according to the Winona Post. An arbitrator will be asked to determine if the issue is or is not a contractual issue.

The unions say they do not like the change and are challenging the district’s authority to create a bidding process and narrow the list of providers, regardless of its motives to save employees money. District consultant Aaron Casper explained that by narrowing the list of providers, companies bid competitively for the business resulting in lower fees and more fee transparency for participants, the news report said.

The five top bids came from Merchants Investment Services (Goldleaf Partners), ING, Fidelity Investments, AIG Retirement, and Educators Financial Services. Union officials did not say which vendors they want to use that did not make the cut.