District Banking on Early Retirements

While the Upper Dublin School Board whittled the district’s 2013-14 budget deficit down by about $650,000 since January, it still has some ground to cover. Now, the school board is turning to early retirements.

The school board on Monday night approved a motion accepting an “early retirement incentive plan” for its teachers. The incentive? $20,000. The money will be paid into the employee’s 403(b) or toward medical coverage for up to two years.

The incentive plan is contingent on ten teachers taking the deal, and the teachers have until May 3 to accept the offer.

Superintendent Michael Pladus said the administration is “hoping” that the early retirement plan will drum up $750,000 in savings. Currently, there is a $2.1 million budget deficit, and Pladus said more early retirements would equate to fewer furloughs and demotions.

About one-third of the teachers in the district are at the top of the pay scale, according to Pladus. A teacher with 15 years’ experience and his or her “master’s plus 30” will earn $104,200 next year. Add in the district’s portion of FICA ($4,000), PSERS ($8,800) and the district’s average payout for medical benefits ($14,500), and a teacher’s total compensation at that level is about $131,600.

For comparison, a first year teacher who has a bachelor’s degree will earn $48,800 before the district contributes $1,900 for FICA, $4,100 for PSERS and $14,500 for the average payout for medical benefits — bringing the total compensation for a new teacher to about $69,400.

So, if the district doesn’t have to replace the retiring teacher, it will see a savings of about $111,600; if the retiring teacher is replaced by a teacher with no experience, it will see a savings of about $42,200.

Pladus said the district offered the same deal last year in which ten teachers retired and 7.7 positions were rehired.

“The deficit is still significant — it’s over $2 million — but it is going in the right direction,” Pladus said as he addressed the board. “[But] to be perfectly frank, as of probably last Wednesday, I was putting together this presentation and I thought we would be under the $2 million mark. 

Pladus said some unexpected retirements and a voluntary wage freeze by the Act 93 Group (which comprises school administrators) and central administration, helped lower the deficit. Those groups were slated for a 1.7 percent salary increase.

On the early retirement incentive program, Pladus said, “It’s one last ditch effort to avoid — or mitigate — furloughs or demotions in staff. We’re trying to avoid that at all costs for reasons that are obvious.”

School board student liaison Sam Jacobson asked Pladus for a ballpark figure of how many teachers were expected to be furloughed or demoted. Pladus said he did not want to give a number, and said it was dependent on how many teachers opted to take part of the early retirement incentive.

“At this point, I’d rather not answer how many, [but] in the gestalt, $1.35 million,” Pladus said.

The April 15 budget meeting has been pushed back a week to April 22. Pladus said he asked the board for an extension; he added that he and other administrators would like to start meeting with teachers who may be part of the first wave of furloughs and demotions and said they should “hear about it from the administration” and not the media.

The meeting will be held in the Upper Dublin High School Cardinal Room at 6 p.m.