October 27, 2011

Later Retirement Doesn't Harm School Districts' Payroll Costs

Justin Katz

The notion that forcing teachers to work an additional five years before retirement will cost districts money came up during my appearance on the Dan Yorke Show, last week, and it apparently has some currency in the General Assembly. Obviously, though, a replacement hired on a five-year delay will cost less than one hired earlier until he or she hits step ten, so to see how the balance works out, I've taken a look at the numbers.

The upshot is that, in the long run, the later retirement saves the district money in salary — which doesn't factor in the post-employment benefits, like healthcare, that it would have to pay for five additional years of retirement under the current system. (In some districts, a later retirement date would eliminate their post-employment healthcare costs entirely.)

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Great analysis; and it's conservative. A more in depth analysis will show you that most teachers have served as substitutes for many years before being hired by a district or come from another. As a result, they are not being hired at step 1. So the savings is really far less than even your calculation shows.

Posted by: John at October 27, 2011 8:29 AM

Interesting. So Larry Purtill is saying that it will be more expensive to the towns and to the whole system for teachers to work more. At the same time, they're telling us that it is more expensive to cities and towns after Carcieri "forced" many employees into early retirement, taking their pension earlier than they might have previously.

So first they tell us it's more expensive to have them retire now they're telling us it's more expensive to keep working?

Posted by: Patrick at October 27, 2011 8:54 AM

You cab sure of 1 thing in life:
If the NEA says something it is a lie.

Posted by: Tommy Cranston at October 28, 2011 11:43 AM
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