March 4, 2010

Cumberland Approves Early Retirement Plan for Teachers

Marc Comtois

Cumberland has approved a plan designed to entice top step teachers into retirement for the purpose of saving cash.

If [20] teachers at the 10th salary step took retirement, it would save nearly $500,000, according to the board's estimate....The idea is for teachers at the first salary step to take the place of those at 10th salary step who choose retirement. Among several retirements incentives is paying 10 percent of the 2009-2010 school year's base salary on Aug. 15 or providing three years of healthcare coverage under the school district's plans. The retiree's copay would be at the same rates as those paid by people who remain employed by the school district.
This is something other school districts have done in the past, too. Heck, private industry has offered these sorts of deals for years, though not as much as they used to, so there is certainly a precedent to this sort of thing: offer the expensive middle-management types a deal to get leaner and, if need be, hire cheaper replacements.

Of course, the difference in the private sector was that, in addition to the short term savings from replacing older employees with younger, long-term savings were realized by offering those younger employees less generous benefits packages. Not so sure if that's going to happen here. And I'm not sure if making it attractive for some of your most experienced--and one would think at least a few of the best--teachers to leave is the best thing for education.

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In the tech companies that I've worked for, if you're unfortunate enough to be over 40 and near the top of your pay grade, you probably have a target on your back, and are slated for replacement by someone from the third world with an H1B visa.

Posted by: Chris at March 4, 2010 12:59 PM

What does this do to the pension liability?

Posted by: Art at March 4, 2010 1:08 PM

Art, good question and I wondered that, too. But, from Cumberland's POV, I suspect that's not their problem, right?

Posted by: Marc at March 4, 2010 1:28 PM

New creative ways to screw the taxpayers. Are they crazy? In ten years the newbies will be top-steppers and the 50-year old retiree will be collecting a top-notch pension and STILL not paying for health insurance.

We should be talking about lowering the pay for the top-step teachers, raising the age of retirement and increasing health co-payments. We can save the teachers money by getting rid of the union dues they are forced to pay.

Posted by: dave at March 5, 2010 7:45 AM
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