Monday, March 7, 2011

Informative Q & A about school budget issues - compensation and benefits

These FAQ are posted at the Mamaroneck school district website.  It appears they are from last year's budget period, but many are relevant today.  Here are some selected questions from the

Q:  Please explain the teachers' salary structure, including raises and step increases.
A:  The teachers salary structure in Mamaroneck, which has been in place since the first contract in the 1960's, is structured similarly to teacher contracts throughout New York State.  The salary chart is a grid, comprised of a series of rows referred to as "steps," which are tied to teaching experience, and a series of columns referred to as "lanes," which represent levels of education.  New teachers are hired onto a "step" within a "lane," based on experience and education level.
Each year, ALL teachers receive the contractual cost of living increase; the current contract provides 3.8% for the 2010-11 school year, a rate that was competitive at the time the contract was settled.  In addition, a teacher progresses by a step each year, until s/he reaches the maximum step on the salary schedule.  If a teacher completes enough additional coursework, the teacher is also eligible to move over a lane. There are lanes for each 15 additional units of credit, from a bachelor's degree through a doctorate. Thus, a teacher can receive an increase for the cost of living, for an additional year of experience, and for additional education.
Q:  Why does this structure make sense? 
A:  This compensation structure was designed to encourage teachers to remain in the teaching profession and grow professionally, by acknowledging the value of experience and education.  There is no real promotional path for teachers, unless they wish to become administrators, so the salary increases resulting from additional years of service and education are in lieu of promotions found in other sectors.
Please note that salary schedules for administrators, secretaries, teacher aides and non-teaching staff also include steps.   

Q:  How much do teachers pay towards health insurance? 
A:  For 2009-10, teachers and administrators contribute 7% towards their medical benefits. (They voluntarily increased this from the contractual 6% in order to save teaching positions for the 2009-10 school year).  Members of the other three bargaining units (representing secretaries, teacher aides and non-teaching custodial/maintenance staff) contribute 4%.
Q:  How do our teachers' contributions to health insurance compare to those made by teachers in other school districts?  
A:  Per the most recent contracts with our five bargaining units, ALL our union employees now contribute to their health insurance for the first time.  Prior to 2007, none of our union employees made any contribution to their health insurance.  This year, teachers and administrators are contributing 7%.  While the contribution rate is lower than that of neighboring districts, inclusion of a contribution was a very important change achieved in the most recent contracts. The health care contribution percentage, along with numerous other provisions, will be reviewed during the next set of negotiations.

Q:  Why do teachers and other district employees get pensions?
A:  District teachers and civil service employees are entitled to a pension for public service employees.  This is a state law, and not at the discretion of employers.  Certified staff are part of the New York State Teachers' Retirement System (TRS) and civil service employees are part of the New York State Employees' Retirement System (ERS). 
Q:  How are pension contributions calculated? 
A:  Both the Teachers' Retirement System (TRS) and the Employees' Retirement System (ERS) are defined benefit plans meaning that retirees are promised a set payout upon retirement.  The district has no control over the New York State benefits that these state-run pension systems pay.  Employer contributions to TRS and ERS are set by the state as a percentage of salary and are based on an annual actuarial valuation of assets and liabilities.  The amount of money estimated to be owed to currently employed plan participants and retirees (the liabilities) is compared with the market value of the pension fund's assets, averaged over a multi-year period.  The difference between the liabilities and assets is what employers must pay into the system.  Simplistically, when the market value of the assets decreases, employers must make up for the loss in value by contributing a higher percentage of salaries.  Because the return on investments plummeted in 2008 and 2009, the TRS contribution is anticipated to increase from the current 6.19% of salaries to around 9% of salaries for the 2010-11 school year - a 45% increase; in the case of ERS
Q:  Other sectors have seen retirement benefits cut. Is there any way to reduce the pension contribution the district must make? 
A:  Employer pension contribution percentages are set by NYS law; employers may not reduce the required contribution rates.  The only way to reduce the amount of pension contributions would be to eliminate staff or reduce their salaries. (Note that any change to contractual salaries would require renegotiating the contracts.)
Q:  How will the new Tier V pension plan help us?
A:  In early December, the NYS Legislature created a new Tier V of pension benefits for public employees hired on or after January 1, 2010.  While the new Tier V pension plan will reduce our pension costs in the long-term, it will not help in the near-term.  Currently, teachers contribute 3 percent of their pay only for the first ten years of employment, are vested after five years and can retire with full benefits at age 55 with 30 years of service.  Teachers hired under the new Tier V must contribute 3.5 percent of pay throughout employment, will be vested after 10 years and can retire with benefits at age 57 with 30 years of service.  It will be a number of years before the district realizes any real savings from this new tier.

Q:  Can we ask the unions to renegotiate the contracts?  
A:  Yes, we can ask the unions if they are willing to reopen their contracts.  However, under NYS law, we can only reopen the contracts by mutual agreement.  The contracts cannot be unilaterally reopened and there are no provisions to do so even under extenuating financial or other circumstances.  Any request to renegotiate must be made through the union leadership.

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