Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, February 14, 1991 TAG: 9102140479
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: By NEAL THOMPSON EDUCATION WRITER
DATELINE: LENGTH: Medium
Teachers could retire early and be replaced by younger and cheaper ones, which would save money for school districts.
But those districts now are finding that Gov. Douglas Wilder's early retirement offer could cost thousands of dollars a year.
So some local districts plan to reject the offer.
"We don't plan to offer early retirement," said Richard Kelley, Roanoke's executive for business affairs.
Wilder's offer would allow teachers to retire at age 50 with 25 years of service, instead of at 55 with 30 years. Bills authorizing the offer still are pending in both the House and Senate.
Each school district would have to approve the offer for their employees.
Districts recently were notified by the Virginia Retirement System, which pays retirement benefits for state workers and teachers, of their number of eligible retirees and how much the plan would cost.
Roanoke County was told that about 130 of its teachers would be eligible. If all decided to retire early, it would cost the county about $600,000 a year.
Of course, not all eligible teachers are likely to retire. But the costs still would exceed Roanoke County's budget.
"It's really a good deal if it wasn't so costly," said Berkley Lucas, the county's instructional personnel director. "It doesn't work for us."
In Bedford County, if the 40 eligible employees there retired early it would cost about $160,000 a year. Superintendent John Kent said it was typical of the state to pass costs on to localities.
"It sounds a whole lot better than it actually looks once you start crunching the numbers," Kent said. "And I think a lot of surrounding districts are finding that out."
Salem Superintendent Wayne Tripp agreed. "Is it fair to ask the taxpayers to underwrite someone's retirement?" he asked.
Salem has only seven employees who would be eligible to retire early. But that still would cost the district nearly $50,000 a year, "and that's a lot of money over 29 years' time, " Tripp said. "I don't see it as a big money-saver for us."
The 29 years is based on the assumption that a 50-year-old retiree would draw benefits until age 79, which the retirement system calculates as the average life span.
Annual payments would begin in July 1992.
The state, in its own early retirement program, plans to compensate for those annual costs and actually save money by leaving positions vacant. School districts probably would have to do the same.
That is exactly the plan in Botetourt County, one of the few districts in Western Virginia expressing interest in the retirement offer. Positions vacated by retirees would be left open, giving the county the money to pay back into the retirement system, said Superintendent C.S. McClure.
"We feel that in the final analysis, the county would actually save money, despite the costs," McClure said.
But in Roanoke - where an exodus to early retirement could cost $600,000 annually - officials plan instead to allow its work force to decline through regular attrition. "So, for that reason, there's really no reason to offer early retirement," Kelley said.
by CNB