National news on the financial and business fronts this summer has been anything but pleasant. Housing, gas prices, the stock market -- all have been sources of anxiety. Mention pension plans and most people think of Enron's demise, when more than $2 billion in pension funds were wiped out.

But mention NERP, Cornell's now-extinct Nonexempt Endowed Retirement Plan, and the 1,800 people who joined this plan before it was frozen in 1982 have good cause to cheer. That is because early in June, they received notice that the value of their NERP pension amounts had been increased by 12.5 percent -- on top of an already announced 20 percent increase in value last fall.

How did such good news come about?

"Through good investment management and a run of good markets through the late '80s and into the '90s," said Mary Zielinski, manager of retirement benefits, in the Division of Human Resources.

"In 1946, when NERP began, it was designed to mirror New York state's retirement plans, which our contract college employees join," Zielinski explained. "The state plans are defined benefit plans -- that is, the state puts funds in a pension plan for each employee, based on that employee's wages and length of service. NERP was also a defined benefit plan. The amount the participant received was not decided by the performance of the market: Cornell did the investing for you, and you could count on a certain value from your pension when you retired."

In 1983, endowed nonexempt employees became eligible for the Cornell University Retirement Plan (CURP), a defined contribution plan, and all newly hired nonexempt endowed employees were enrolled in CURP. Current NERP employees were also placed in CURP, but as long as they were in a nonexempt position, they continued to accumulate years of credit in the NERP pension benefit calculation.

Years passed. Most NERP participants retired. By 2006, a nonexempt endowed employee would have had to been working at Cornell -- as a nonexempt employee -- for at least 24 years to still be in NERP. Given the low number of participants versus the cost of administering the plan, it made more sense to close out the plan.

Most employers around the country who have terminated their pension plans have kept some or all of the excess assets in the plan. Cornell distributed all assets in the plan to current retirees and NERP participants still in the workforce by greatly enhancing their benefit. Cornell did not receive any excess assets from the plan termination.

Depending on what worked best for them, participants could either take a one-time lump sum in place of future payments, roll the funds over to an individual retirement account or tax-deferred annuity, or take a lifetime monthly annuity benefit, which would be administered by MetLife. When Cornell did a final accounting of the NERP investments, it discovered that regardless of how plan participants chose to invest or spend the money afterward, each would have the value of their pension increased by 20 percent as an early estimate. These funds were distributed in fall 2007.

In the final accounting, Benefit Services then determined that an extra 12 percent boost to the value of participants' benefits could be delivered.

With the new funds, most NERP participants either enhanced their regular monthly annuity check or rolled the new benefit into an existing retirement account.

"I just moved it into my tax-deferred account," said Donna Bugliari, program manager for Cornell's health and dental plans. "I had just joined Cornell six months before the plan froze, so I really did not have that much in the plan then. So I just did what I needed to do to have the funds transferred."

Bill Douglas, senior resource specialist for retirement plans, did the same thing. But a friend of his decided to pay the income tax associated with taking the benefit as a lump sum and spent the money on personal needs. Others chose to spend their funds on a major home improvement project or other big-ticket item they otherwise would not have been able to afford.

"None of us were really expecting this money, except as a small add-on after we retired, so this was a real windfall for all of us. And for those who have been nonexempt all these years? It made them very, very happy," said Douglas.