District gauging interest in early retirement offer
Facing the prospect of a budget shortfall down the road, the Glenwood Community School District is offering early retirement incentives now to district employees as a pre-emptive cost-saving measure.
In a letter sent out last month to eligible classified and certified staff as well as administrators and department directors, the district is gauging interest in an incentive to employees that are at least age 55 years old, have 15 consecutive years of service in the district and are contemplating retirement. If the offer is accepted by enough staff, the Glenwood Board of Education would move forward with a finalized offer plan.
“We’ve looked at the finances and we’ve come up with an early retirement package next year and we’re looking for teachers to opt into that this year,” Glenwood Community School District Superintendent Devin Embray said. “If we can get a certain number of people willing to do that, it’s something we can offer. The board is sitting at a certain number that they’ll have to get close to in order for the plan to go through and them to finalize it.”
Embray said about 30 district employees meet the early retirement incentive criteria. About half, he said, are already vested in the Public Employees’ Retirement System (IPERS) fund and qualified for the “Rule of 88” plan. That plan allows any state employee whose age plus years of service equals 88 to be eligible for full retirement benefits even if they are under age 65.
According to the letter sent to staff, the district’s plan would offer certified staff, which comprise the district’s teachers, an early retirement package that includes a payout of 80 percent of the difference between their next fiscal year’s salary and the equivalent of a fourth year teacher salary. That money would then be placed into a 403(b), a popular tax-sheltered annuity retirement plan for public school employees, payable over two fiscal years.
The incentive package for teachers also includes $400 per month toward a health retirement account (HRA) for up to 60 months, ending the month prior to the teacher’s 65th birthday. For those who opt out of the HRA, an additional $4,800 would be added to the cash option, also to be paid over two years.
Department directors and administrators who opt into the retirement incentive would receive a percentage of their annual salary based on years of service. For 15 years of service, the employee would receive 10 percent of their annual salary, 20 years would receive 15 percent, 25 years would receive 20 percent, 30 years would receive 25 percent and 35 years would receive 30 percent.
The HRA package for administrators and directors would be the same as offered to teachers.
Classified staff, or non-salaried district employees, who choose the early retirement incentive would receive a cash payout equaling 38 percent of their current salary. Classified staff would not be eligible for the HRA plan.
District employees have until April 30 to let the board know of their intentions.
Embray said the board has indicated its financial cutoff for proceeding with the retirement incentive package is $420,000 or approximately 16 teachers.
“We have some interest and some who I think are contemplating it,” Embray said. “We won’t have an idea on exact amounts or numbers until April 30.”
The board plans to make a final decision on the plan at its May 14 board meeting. A similar incentive package was offered three years ago.
Embray called the prospect of losing dedicated, committed district staff a “bittersweet” financial decision no district wants to make. But with state funding not matching the school district’s financial needs and Glenwood’s lower than expected enrollment projections for the next five years, a proactive approach now is necessary.
“It’s totally financial and we’re not trying to put the burden on anyone who is considered eligible,” Embray said. “If it (the retirement incentive) works for them, great. If there is enough of them that it works for, that’s an awesome thing for our district. Otherwise we’ll move down the road two or three years for now, and if we can’t stay out of the red, we’re going to have to end up having to cut. That’s just going to be a reality.
“That’s not meant to pressure anyone out of the district, I don’t want it to appear that way at all. I know some people do think of it that way. But I don’t want to lose people. For me, it’s a double-edged sword. We lose that expertise, we lose that tenure and on the other hand, financially, to keep our doors open and our programs going, we’ll have to probably bring in younger staff.”