Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, February 9, 1991 TAG: 9102090098
SECTION: CURRENT PAGE: NRV-1 EDITION: NEW RIVER VALLEY
SOURCE: RICK LINDQUIST CORRESPONDENT
DATELINE: RADFORD LENGTH: Medium
The schools still could save money if less-experienced, lower-paid personnel replaced them - or they were not replaced at all.
But that's not likely, Superintendent Michael Wright said Friday. "We'll have to replace all those folks."
Wright said nine teachers, three school building administrators and one maintenance worker would be eligible under House and Senate bills to allow early retirement for state workers at least 50 years old with 25 years of service.
The superintendent broke the news to the School Board Thursday night. At the time, he thought he was talking about a one-time payment. He said he was told Friday the system would be paying the premimum for 28 years.
A retirement advisor for the state system in Richmond told the Roanoke Times & World-News Friday afternoon the payment would be for 29 years, not 28 - but it may not be as bad as it sounds.
The state retirement system sent letters to all school divisions and other state agencies last week outlining "the worst-case senario" for each system, said Barbara Stovall - that is, what it would cost each school system if all their eligible employees retired early and were replaced at the same costs.
She said the retirement system's phones "have been inundated" with calls from anxious local school officials since the letters went out.
Stovall said the state would assess the localities the extra money the early retirements would cost the retirement system over the years. She said she had no idea how officials came up with 29 years of payments.
The figures sent to local school administrators for their systems were figured as a percentage of the school system's total annual payroll and based on actuarial statistics, Stovall said. The percentages and amounts, called the "replacement factor," would vary from locality to locality, she said.
If an early retirement bill becomes law, actual costs for each school system will be calculated after the state knows how many employees will retire early, Stovall said.
Final figures will be available early next year, she said.
The retirement system's letter to Radford officials said the state would assess the city a premium amounting to 1.34 percent of its current payroll if all 13 teachers elected to retire.
Gov. Douglas Wilder has recommended early retirement for state employees as a state cost-saving measure. The plan would add five years to the service credit of eligible employees. Effective dates of retirement, according to the retirement system, would be from July 1 through October 1 of this year.
The retirement system's letter said there would be no penalty for teachers who retire early, and that the system would provide a monthly $100 "bridge benefit" until the retiree reached age 62. The plan also would allow for a cost of living allowance in the second year after retirement.
Should an early retirement plan be approved for state employees, local school boards could then decide whether offer early retirement to their teachers.
Radford's School Board decided to wait and not take a formal position on either the concept or its implications.
Wright pointed out that the school division could not deliberately hire replacement teachers at the bottom of the scale, and that there was no guarantee that new teachers would not also be at the top of the scale.
"So, the real savings is in non-replacement," board Vice Chairman Guy Gentry said. Wright agreed, pointing out that the board usually hires experienced teachers, but not necessarily at the top of the scale.
"This is the worst year in the world to find something that's going to cost us money," said board member Chip Craig. He said he didn't care if the plan did not turn out to be a financial windfall for the city as long as it didn't cost more money.
Although he has had no formal requests for early retirement as yet, "there are people who are interested," Wright said.
He also said city administrators have studied the plan and City Manager Robert Asbury "has reservations about recommending it."
So far, the Radford Education Association has not taken a formal position on any early retirement proposals.
Assistant New River Editor Jack Chamberlain contributed information to this story.
by CNB