Quality Education >Home>about the teacher's contract
We read an article in the naperville sun and wanted to know more, so we went to the source. Here is his response from Dr. Alan Leis Superintendent of Schools.
What is the rationale for the 6% salary in the last 4 years?
As you might have guessed, we took into account quite a few factors regarding the decision to include the 6% as part of the package. First, the agreement does not provide 4 years of 6% to all - those retiring on 2009 receive 3 years, 2010 4 years, 2011 3 years, 2012 2 years, and 2013 1 year. All are required to give 3 or 4 years advance retirement notice. And this provision “sunsets” in 2010 in the contract tentatively agreed to with NUEA.
Factors to consider are savings due to retirement attrition, cost avoidance of TRS pension penalties, and the negotiation process.
First, there is potential savings to the District by providing the > salary enhancement. The savings varies on whether the teacher receives 2, 3, or 4 years of the enhancement. But in general if we can get one teacher of every 4 that takes the enhancement to retire at least one year earlier than they would have without it - it pays for itself. I have a chart that illustrates this, but it does get kind of long.
Second, the 6% is a cost avoidance. Some teachers have the potential (by coursework, step increases if they qualify, additional assignments, stipends for coaching, , etc) to earn more than the maximum 6% (TRS allows up to 20% earnings, but requires the District to pay the actuarial cost over 6% as a penalty) over their last four years. The District would pay a penalty for these teachers. I had done an analysis of the potential risk. The 6% payments reduces or eliminates the risk. There are 48 teachers that would be eligible for the retirement enhancement over the life of our two year contract that could obtain lane advancement (increase in salary due to additional course work toward an advanced degree) that would result in a District paid penalty to TRS upon retirement. The total cost of salaries plus the penalty could approximate $15,000 or more than the total cost of salaries with the 6% enhancement. So, for some people the 6% payments can be less than if we didn't do it.
Finally, it can be noted that in deciding to do this we ultimately looked at what similar districts were doing. They are pretty much giving the maximum in the law--the four 6's. That was a key issue for the union--getting the maximum allowed by state law. We felt we leveraged that concern to lower our total teacher salary costs and extend our positive budget balance two more years out. Some might argue that we should fight this one to the death, but a majority of the Board didn't see it that way, focusing on the larger salary costs, not the benefits for a small percentage of teachers.
So, in the end it is not all about giving teachers more money. It is a business decision based on 1) the total cost of the teaching staff and managing turnover, 2) managing the risk of TRS retirement penalties, and > 3) a product of the negotiations process. Finally, realize that the Board can request to renegotiate different terms for 2010 if it can find a way to do so.