Fox Point-Bayside School Board OKs post employment benefit payouts
Teachers to choose between two fund distribution methods
Fox Point - The Fox Point-Bayside School Board this week approved a series of changes to the district's post employment benefit package, moving to distribute the district's post employment benefit fund to existing teachers in the form of payouts.
Going forward, the district will pay a set amount into a retirement account on behalf of teachers annually and will not provide a health insurance benefit after retirement.
"We'll have a fixed liability over a long period of time, and I think it's manageable," board President Michael Weiss said.
Still in the air is how exactly the benefit fund will be distributed among teachers. Director of Business Services Amy Kohl presented two options, one which pays all teachers the same amount per year of service, and another which pays teachers with more years of service increasing amounts for their accumulated years.
Teachers will vote to choose one or the other option before the next School Board meeting, and that choice will likely be echoed by the board.
"It would be my intention to follow that recommendation," Weiss said.
Kohl and the district's finance committee have been working with actuarial consultant Key Benefits to limit the district's liability over time - which has been growing as the cost of a health insurance benefit has risen over time - and work with employees' expectations.
According to current actuarial estimates, the district has approximately $1.1 million worth of obligations for current retirees. Subtracting that amount from the $4 million balance of the benefit fund leaves approximately $2.9 million to distribute to current employees. That $2.9 million, divided by the 899 total years of service accumulated by the district's 69 existing teachers, means each of them would receive about $3,200 per year of service upon retirement.
The district, however, is looking to provide more than that for its employees, and is planning to increase the employee payouts to a point where the total cost would be at most an additional $750,000.
Kohl presented two options for distributing the additional money. The first would increase the payout per year for employees to $4,000, and would come in at an added cost of approximately $733,000. The second option, the purpose of which is to reward long-standing teachers, would add an increasing amount per year of service above the $3,200 - e.g., $600 per year for the first nine years, $900 for the 10th through 14th years, up to $1,200 for the 20th through 27th years. The second option would add approximately $743,000.
Though the increased payouts come with a large price tag, Weiss said he would prefer $750,000 of fixed costs instead of the growing liability associated with an insurance benefit.
"Everybody thought they had (health insurance), and understandably," Weiss said. "It's an attempt to balance that as best we can. If we wanted to be really hard-line about it, we could put no more money in, but I don't think that's the right place to end up either."
"It does seem reasonable," board member Timothy Melchert said. "It's kind of like a good-faith effort to correct this situation that no one intended or planned on."
The School Board will vote to adopt one or the other plan at its next meeting after teaching staff weighs in on their preferred option.
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