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INDEPENDENCE — In an effort to close the gap on a $1.2 million cut to the Grayson County Schools’ budget, the division will consider implementing an early retirement plan.
Superintendent Dr. Elizabeth Thomas brought a proposal to the school board Feb. 9 that she said could save between $100,000 and $200,000 for the 2009-10 school year.
“This program would benefit both the school system, and its employees,” Thomas said.
Eligibility for the plan includes:
• retiree must be at least age 52 and have at least 20 years of service, with the past 10 years of employment with Grayson County schools.
• retiree must be employed and in good standing with the Grayson School board.
• retiree must notify the superintendent in writing by the deadline tentatively set for March 13.
The plan would give employees two choices.
Option 1 for non-classified personnel (hourly-paid employees, such as cafeteria and maintenance workers and secretaries) would give the retiree with Virginia Retirement System benefits an amount equal to 10 percent of the final contract salary. The supplement would be paid in equal monthly installments for 14 years or until the employee is eligible for Medicare.
Upon reaching Medicare eligibility, an employee’s monthly supplement will end. In the event of a retiree’s death, the balance owed would be paid to the retiree’s estate.
Option 1 calls for the school system to pay the employer’s and employee’s share of the current ($386.07) monthly individual health insurance premium in the employer’s base health benefit plan. The premium will be paid for 14 years or until the employee is Medicare eligible.
Option 2 for non-classified personnel will pay the retiree a stipend of $1,000 per year for each year past 20 years of service.
The stipend will be paid in lump sum on the last working day of the month after the last contract payday.
The option has the school system paying all of the employer’s and employee’s share of the current base individual health insurance premium in the employer’s health benefit plan for 14 years, or until Medicare eligibility begins.
The only differences for classified personnel (salaried employees such as teachers and administration) are a requirement of 30 years of service and a stipend paid at $2,000 per year for each of the past 20 years of service.
School board members were hesitant to approve the plan on first reading.
“So we are committing future boards to pay 10 percent of a person’s final pay?” asked board member Shannon Holdaway.
“That is correct,” Thomas said. “But we have calculated it and anticipate no cost to the division over the entire life on the program.”
The program would replace teachers on the high end of the pay scale — making $55,000 to $60,000 including benefits — with less experienced teachers at the lowest level, around $38,000 with benefits.
Although the school system would pay on average $5,000 per employee, the $20,000 savings in pay will far outweigh the costs.
“We would save about $15,000 on each person in the first year,” Thomas said.
The system is modeled after other school systems’ early retirement plans. Several Virginia school divisions use the same plan, according to Thomas.
Board member Gary Burris asked how many employees were eligible.
Thomas said it was about 30.
“What do they think [of the idea],” Burris questioned.
While only a small group of those eligible were spoken too, Thomas said all those in the group were very interested.
Burris then asked why the plan had to be voted on that night, when board members had not had time to look it over.
Thomas said the deadline was set for March 13 to apply for the plan and that a budget had to be presented to the county by the end of March.
“We need to know how many will participate so we can budget for next year,” Thomas said.
Holdaway said he could not see how it would save the board money in the long run. In his quick calculations, Holdaway said, it appeared the school system would pay an employee $90,000 over the 14 years to walk away.
Thomas assured that calculations were done and that computations showed there would be savings.
“My recommendation to this board is to approve this,” she said.
Holdaway moved to approve the plan and it was seconded by board member Hobert Bailey. During discussion, Burris said he could not vote in favor of the plan on such short notice and without more information.
“I’m sorry, all I see is red flags,” said Holdaway.
Bailey then asked if it could be worked into an upcoming budget workshop this week and still give employees several days to declare their interest.
“Then we may have the opportunity to have a pre-registration,” Bailey said.
Thomas said she would try to make it work.
Holdaway then amended his motion to take action at the next meeting, which is Thursday. Bailey seconded and it passed unanimously.
The public meeting is at 5:30 p.m. in the boardroom of the Grayson County Courthouse.