School Board weighs early retirement offerings

Friday, November 16, 2018

Spirited discussion ensued at Alta-Aurelia School Board’s discussion Monday of whether to offer early retirement incentives, and what to offer in the case that they do.

Superintendent Lynn Evans came to the board with a proposal offering staff a cash payment of 60 percent of their current base salary if they choose to retire at the end of this school year. He said that he believed cash would be the best incentive to garner early retirements.

“It would save you money on classified staff,” said Evans. “It’s been many years since we’ve offered early retirement to classified staff.” Offers as high as 80 percent of salary have been offered before with limited to no success in spurring turnover, he said.

“I don’t think we should use taxpayer money to fund retirement when people are eligible to retire,” said board member Gigi Nelson. “If we want to offer it, we need to offer something valuable.” Nelson wants to offer paid health insurance as an incentive for early retirements, citing philosophical disagreements with the proposal of cash incentives. If any, she would like to see the cash offering stand at 50 percent of a teacher’s current salary.

It was unclear whether offering health insurance for a certain number of years would be any less expensive than offering cash up front.

“You’ve already paid them, why are you paying them to leave and to retire? That’s what [the taxpayers] are going to say,” said board member Nicky Sleezer.

School Boards often use early retirement tools as an incentive to reduce costs and increase flexibility in budgeting, though a few districts keep a standing offer every year. Teachers near retirement who are higher on the salary schedule with their level of experience can often be replaced with newer, less experienced teachers with lower initial salary needs.

Evans will be putting together a proposal with cost comparisons for offering insurance versus cash. The board will take action in December, opening up the decision to teachers early next year, potentially giving the school more time to find quality new teachers.

“I do want you to know that when we put it out there, it’s just this year,” the superintendent told the board, advising them to use it as a tool to flip the salary schedule. “As soon as you put it in policy and leave it there, it’s not a tool anymore.”

The offer could potentially be first come, first serve, with a cap on how many staff it will allow to take the offer. Rohwer suggested having a higher incentive for those who take advantage of the offer first, and lowering it for those who accept later. Evans said he believes two or three teachers might take advantage of the offer.

Early retirement incentive payments come out of the management fund, which is funded by a local property tax levy used for a few limited purposes. Any cash cash incentive payments would go into a 403(b) account, the teacher’s version of a 401(k) retirement account. It would not affect their eligibility for collecting an IPERS pension.

“Our constituents are acutely watching this,” member Jon Turnquist said, pondering whether the board would face less flak for offering insurance. All board members are on board to make an early retirement offering of some type, but the board all agreed the potential offer wouldn’t do any good if nobody takes advantage of it.