JCTA voting on pact (1/21/04)

The Jay Classroom Teachers Association was expected to complete voting this afternoon on a tentative contract which makes significant changes in teachers’ retirement benefits.

The tentative accord won approval 6-0 Monday night from the Jay School Board.

But JCTA officials said this morning there is a good possibility the contract won’t win teacher approval as written.

The new contract would address a multi-million dollar unfunded liability facing the school corporation in connection with severance retirement benefits and retiree health insurance.

Currently, retiring teachers receive — in addition to their state teachers’ pension — lump sum payments for up to $42,000 worth of accrued, unused sick days. If they meet retirement criteria, they also receive single health insurance coverage from their retirement date to their eligibility for Medicare.

The Indianapolis actuarial firm of McCready and Keene has projected that the payout for certified employees and retirees would total nearly $30 million over time.

Under the tentative contract, both the sick day payments and retiree health insurance benefits would be bought out at a cost of $7.9 to $8 million.

Funds for the buyout would come from a pension bond issue, a vehicle created by the Indiana General Assembly for just such a purpose. Authority to issue pension bonds expires at the end of 2004.

Jay Schools superintendent Barbara Downing said the pension bond system was designed by the legislature to be “revenue neutral.”

In other words, the bonds would be paid off over time by property tax revenues that would have otherwise gone for capital projects. There would be no addition to the tax rate to pay for the bond issue.

“Over the years, the corporation and the union wrote a check that couldn’t be cashed,” said board member Brian Alexander, who served on the negotiating committee. The buyout is intended to resolve that looming unfunded liability, he added.

“If the vote does not pass,” JCTA president John Ferguson said today, “it won’t be because the teachers don’t like the plan. ...They realize we have to do something. But they are nervous, and they are scared. They’re giving up their security. ...They aren’t mad. They’re very nervous.”

Currently teachers are able to accumulate as many as 220 unused sick days. That would drop to 90 after the buyout.

Faced with a catastrophic illness, teachers could also turn to their “sick leave bank” of days; but Ferguson said contract language concerning the ease of use of the “sick leave bank” still needed to be clarified.

The tentative contract calls for teachers with eight or more years of experience to receive a lump sum buyout of their retirement severance based upon accumulated sick days, with those funds placed into individual 401 (a) retirement accounts. Those teachers also would receive a lump sum for future retiree health insurance needs which would be placed in a Variable Employee Benefit Account or VEBA.

Teachers with fewer than eight years of experience would not receive money for retiree health insurance or the sick day buyout. Instead, they would receive an additional 1 percent of their 2003-2004 salaries, with those dollars placed in a 401 (a) individual retirement account. The school corporation also would contribute 1 percent of salary in 2004-2005 and 2005-2006 to the retirement accounts of those teachers. In 2006-2007, the 401 (a) contribution would increase to 1.5 percent of salary.

“This is an example of collective bargaining working for both sides,” said board president Duane Starr in support of the tentative agreement.

Board member Ted Champ was not present at Monday’s meeting.

Downing walked the board through a report on highlights of the tentative agreement, noting that the school corporation had been reviewing the unfunded liability issue since 2001. She said discussions of a buyout of the retirement benefits had begun in the summer of 2002 and had been the focus of 11 meetings with the teachers’ negotiating committee.

The tentative contract also calls for pay increases of 2 percent for teachers with less than 19 years of experience. Teachers with 20 years or more experience would receive a 3 percent increase and a $500 lump sum. Teachers at the top of the pay scale would receive a 4 percent increase.

Based upon those changes, pay increases for the current year for teachers with bachelor’s degrees would range from $1,485 to $1,791 and pay increases for those with master’s degrees would range from $1,583 to $4,700. The $4,700 figure includes the one-time lump sum of $500.

The agreement also calls for no additional contribution from teachers for their health insurance over what was in the prior year’s contract. It would also increase pay for coaches and extracurricular sponsors.[[In-content Ad]]