Schools Offer a Lure to Retire Early

The school district is offering early retirement to its employees.

The school district is offering early retirement incentives to teachers and staff to reduce personnel costs due to budget constraints and state funding cutbacks. And some departing employees may not be replaced, district officials said Tuesday.

Whether or not the district goes through with the golden handshake, which would credit employees with two extra years of work toward their retirement benefits, depends on the employees who opt in.

Longtime high school ceramics teacher Bill Darnall’s pottery wheel may quit spinning as he notified the school district earlier this month of his intention to retire if the deal goes through. It’s unclear yet how many others will come to a similar conclusion. The non-teaching staff has an April 16 deadline to decide, and certificated teachers have until April 30.

School officials must certify that the incentive will not add to the district’s costs, explained Nancy Hubbell, assistant superintendent of instructional services. Such a determination would be based on current salaries for the departing employees weighed against costs the district must pay into the two state pension systems in early retirement benefits, as well as the cost of hiring new employees.

District administrators expect the difference between the higher pay scale salaries of the retirees and the lower salaries of any new hires to more than offset costs of early retirement packages.

If the retirement incentives go through, the district may not necessarily replace all of the outgoing employees, depending on enrollment levels and which employees retire, potentially providing additional cost savings. Currently, the district employs a total of 171 teachers and 148 staff members.

“Once the candidates have filed their intent to retire, we can perform the calculations and make a recommendation to the board,” said Hubbell.

The district has covered this ground before. A similar retirement incentive offered to teachers as recently as 2010 achieved the desired reduction in salary costs, said Hubbell. Less recently, non-teaching staff took advantage of a retirement incentive in 2003.

Last month, school officials met unofficially with representatives of the Laguna Beach Unified Faculty Association and California School Employee Association, unions representing teachers and non-teaching staff, respectively, to inform them of the incentive offers. Both packages allow employees to retire now and receive benefits commensurate with an additional two years of service, the standard golden handshake deal offered by the pension plans, California Public Employees’ Retirement System (CalPERS) for the non-teaching employees and (California State Teachers’ Retirement System (CalSTRS) for teachers.

Eligible employees must have five years of service; non-teachers must be at least 50 and teachers 55 years of age or older.

All employees eligible can take advantage of the offer and retire from June 1 to Aug. 31. Various restrictions apply to those who accept the deal. For example, non-teaching employees may not receive unemployment insurance payments during the retirement window, and teachers may not receive such payments for a year after their retirement date. Furthermore, teachers may not work in any California public schools for a year, or work in this district for five years from their retirement date.

The board will hold a mandated public hearing on the status of the CalPERS incentive on April 24, and will review the teachers’ incentive package at the following May 8 board meeting. Assuming both deals prove viable, they’ll be subjected to board approval on May 8 and May 22, respectively.

Asked whether the district considered sending out pink slips if the retirement incentives don’t yield hoped for results, Hubbell said, “there are no plans for lay-offs at this time.”

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