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Longtime teachers await Janesville School Board benefits decision

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Frank Schultz
February 21, 2013

— The Janesville School Board is considering a less expensive early-retirement benefit for its employees, but some of those under the existing system might be allowed to keep the current benefit.

Veteran teachers are waiting—some anxiously—to hear what the board decides.

The board could impose the new system on all employees. If it does, those close to retirement likely would retire this spring. That would be the only way they could get the benefit they had planned on, unless it was grandfathered.

That’s because union contracts are scheduled to expire June 30. The board could change benefits that teachers and others have now from that point on.

Mary Ann Kahl, manager of employee relations for the district, urged board members at a committee meeting Wednesday to decide soon so employees can make decisions about their futures.

“I think it’s stressful to them, and I hate to see good people leave when there’s no need to,” Kahl said.

Officials discussed the idea at length at a meeting of the school board’s personnel, policy and curriculum committee.

Ninety employees—including 40 to 50 teachers—are eligible to retire this year, said Steve Sperry, human resources director.

The administration recommends that some employees be grandfathered “with some aspects of the current plan.” The administration recommends a decision be announced by mid-March.

Superintendent Karen Schulte, however, said the board should not vote on the matter until the status of Act 10 is known.

Act 10, which allows the board to control benefits rather than bargain with unions, is being challenged in court. Lawyers have advised the board not to make decisions relating to economic issues until the challenges are settled.

Board members expressed interest in controlling the benefit’s cost. Now, certain employees receive health care coverage from the time of retirement until they are Medicare-eligible if they meet certain qualifications.

Teachers age 55-61, for example, must have worked 20 years in education—10 of them in the district—immediately before retirement.

The problem is the cost of health insurance has skyrocketed in recent decades, making the benefit costly and difficult to plan for.

In addition, the benefit has been paid out of each annual budget, but new accounting standards require the district to set aside money to cover the cost for what now is considered an unfunded liability.

Two options for a new benefit are a tax-sheltered annuity or a health savings account. Various school districts use one or the other.

The retiree could use the annuity for any purpose. The health savings account would be limited to paying for health insurance.

Officials said they would have to draw a line between employees close to retirement—who could choose to keep the current benefit—and those who would be placed in the new plan.

Three to five years from retirement is a common place to draw the line, said Linda Mont of Key Benefit Concepts, a district consultant.

Board member David DiStefano said he would not mind one or two years, but he’s not worried about a mass exodus.

“If they want to leave, let them leave. There are opportunities for other people to come in and do great things in our school district,” DiStefano said.

Schulte said one or two years is too short a time.

Mont said much will depend on what the district can afford.

“We’re going to have to draw the line at some point, and somebody’s not going to be happy,” said Kristin Hesselbacher, committee chairwoman.

One option is not to offer any post-employment benefit, Kahl said, but offering the benefit helps recruit and retain employees and not offering it could affect morale.

Board President Bill Sodemann questioned whether a benefit should be offered. Some employees might be starting their most productive years when they become eligible to retire, so why encourage them to leave? he asked.

Board member Kevin Murray accused Sodemann of creating an argument for reducing the retirement benefit.

Also during the discussion:

-- Sodemann mentioned that retirees currently receiving the benefit do not pay any premium share. That might change after July 1, he said. Schulte confirmed that this is “something we have discussed.”

-- DiStefano suggested the district should consider extending benefits to domestic partners.

“We’re not treating all our employees equally, and in my opinion, that’s not what we’re about,” DiStefano said.

-- Kahl introduced the idea of getting rid of sick days, personal days and other ways that employees take time off and replacing that with one category: paid time off. The committee will continue this discussion at a future meeting.

-- Teachers union President Dave Parr, who has argued that the board should negotiate benefits with the unions, was present and asked to comment several times but was not otherwise a part of the discussion.



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