custodial union

Some Pennsylvania School Districts Look at Early Retirement Incentive Plans to Help Budget Deficits . . . Could this be a less-painful option?

It is interesting to note how other school districts are exploring different options internally to reduce expenses. 

Apparently, Tredyffrin Easttown School District joins the ranks of Bucks County’s Morrisville School District to consider outsourcing custodial services in addition to an early retirement plan to its teachers.

According to a recent article in www.phillyBurbs.com  Morrisville School District’s school board suggests that these measures are required due to “out of control spending due to increases in salaries, benefits and pensions.”

Although Morrisville School District is ‘only’ facing a $2.5 million deficit, they are facing some of the same problems as TESD.  This district is offering a special ‘early retirement incentive plan’ to teachers as a way to reduce costs.  Teachers have until March 31 to decide whether to take this option.

Has TESD considered some form of an early retirement incentive plan for teachers?  It is possible that I missed this discussion in school district.  For those that have followed the school district closely, any information on this topic is appreciated. As school districts across the state are struggling to balance their budget deficits, I find it of interest to look at options that other school districts have explored.

Looking beyond Morrisville School District, I wondered if other school districts were exploring an early retirement incentive option as a cost-saving measure.  Middletown Area School District (MASD) in Dauphine County, www.raiderweb.org  (10 miles from Harrisburg) is also offering a retirement incentive plan to teachers in an effort to reduce their gaping deficit. For those teachers that qualify, they have until March 21 to decide on this option.

The MASD early retirement incentive is available to full-time employees covered by the teacher union collective bargaining agreement who have at least 30 years of district service by June 30, 2011 and incur no more than one additional year of service under the state employees retirement system (PSER) after retiring from the district. Employees 55 or older with 20 years of service by June 30 also can retire under the same conditions.

Benefits of MASD’s retirement incentive include a $20K one-time contribution into employees’ 403(b) accounts that won’t be included when computing their annual salaries for retirement benefits.  Health care benefits under terms of their current teacher union contract which expires June 30, 2012 will also be made available if a “sufficient number” of eligible employees retire under the incentive.

Could an early retirement incentive plan be a ‘less-painful’ way of reductions of costs for school districts in budget crisis?  In Morrisville School District and Middletown Area School District, their 2011-12 budgets will be ‘tweeked’ based on how many teachers take advantage of the retirement incentive. These kind of early retirement incentive plans  are similar to models often seen in private industry for employees.  Understandably, it is too late to enact an early retirement incentive plan for the 2011-12 school district budget in TESD, but what about for the following year’s budget? 

 Any discussion of an early retirement incentive plan would take cooperation between school districts and teacher unions.  However, with talk swirling in Harrisburg of teacher furlough legislation, I would think the conversation of early retirement incentive plans would be a conversation that teacher union leaders might welcome.

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