Board Extends Post-Retirement Benefit for District Employees
“We gave our teachers an embarrassingly small raise, but when you talk about our fund balance going down to two million dollars- two percent of our entire budget- that’s crazy. We can’t afford to do this.”
By Brandi Makuski
After nearly an hour of debate, the Stevens Point School Board this week voted to extend what’s been called a “rich” employee retirement benefit for one more year.
The benefit, which was implemented in 2012, offers qualifying teachers and support staff a $500 monthly benefit toward their health insurance premium for five years following retirement. The program was scheduled to expire on Jan. 15 of this year.
Board President Meg Erler said the matter was up for discussion because a group of teachers requested the board reconsider that sunset date.
At their Jan. 11 meeting, some board members proposed a temporary suspension of the retirement benefit for all staff hired after that date, and the creation of an ad hoc committee to study the long-term financial effects on the district.
“Let’s discontinue our post-employment retirement benefits on a temporary basis to give us the next, say, four to five years, to study this for all employees hired after today,” said Board Member Sam Levin. “We can’t [decide] this in a quick fashion. It took us years to impose raises, it shouldn’t take us days to take away something.”
But Erler pointed out Levin’s suggestion was moot, saying the decision to remove the benefit had not been made in only days, and the sunset date was created by the 2012 school board. The issue also was recently a topic of discussion during the December meeting of the human resources committee.
Levin said many post-retirement benefits were “sweepingly” removed following Act 10, and he’s convinced the issue has been a sticking point during the hiring and employee negotiation process- arguments he used several times in an attempt to obtain a majority vote in approving a new ad hoc committee.
Board Member Trish Baker said she’s received several calls from concerned teachers- some, she said, who claim they didn’t even know what their post-employment benefits were until they filed their retirement paperwork- and she felt the board should at least discuss the option of extending the benefit.
“I want to give teachers a real clear understanding of what they have,” Baker said, adding many who were eligible for the retirement benefit were “waiting for this board meeting to see what we would do” before determining whether or not to retire.
Baker said she supported discussing the issue but did not support extending the benefit for much longer.
“I don’t want to give anyone the illusion that we have the money to continue this sort of rich plan; we don’t,” she said. “We gave our teachers an embarrassingly small raise, but when you talk about our fund balance going down to two million dollars- two percent of our entire budget- that’s crazy. We can’t afford to do this, and I’m afraid putting together a committee to study it gives people false hopes.”
According to a board memo from Florence Haley, human resources director, the district is currently responsible for $12 million in unfunded future pensions. It’s a liability she says is not sustainable.
“The depth and breadth of that cost is another budgetary variable that consumes available operating funds both in the current year and, problematically, for many years to come,” Haley’s memo read in part. “The district annually spends $2.2 million dollars from the operating budget toward the cost of existing post-retirement benefits.”
Haley’s memo also outlines the board-approved standards for the retirement benefit, which requires a minimum of 15 years of full-time employment for retirees at least 55 years old- for teachers and administrators- and 57 years old for support services personnel. A written notification of retirement is also a requirement.
Erler said creating the sunset was a smart move on the part of the 2012 board.
“The previous board was correct in making a determination of the fiscal picture of our district, and frankly that picture has not gotten better, it’s gotten worse,” Erler said. “This board has lots of irons in the fire in terms of where we need to put our fiscal resources. We have our new teachers- our youngest teachers- making below-scale with respect to our competitors; we have our supplemental plan that we are moving forward with; and we are looking to try to provide additional resources to existing staff moving forward. We also need to provide a clear direction with this district in terms of the very limited financial resources we have.”
But Erler’s rationalization did not move Levin, who was steadfast in his belief an ad hoc committee would provide the board with more information.
“It makes absolutely no sense, why can’t we look at the numbers? We have people who can’t even find the information on the website or in the handbook, and we can’t even [look at the numbers]? I’m ashamed right now to be a member of this board,” Levin said.
Others on the board told Levin the numbers he was seeking have been presented in the past, and if he wanted to see them again, he only needed to ask.
“Sam, if you’re not understanding the millions and millions and millions of dollars in debt this cost district; if you want those numbers brought back to the board, I don’t think you need to have a committee to do it,” said Board Member Chris Scott.
The board voted unanimously to approve the one-year extension through March, 2017, with Lisa Totten abstaining.