Grand Forks schools look to early retirements to hold down costs

The Grand Forks Public School District could save thousands in the next few years in early retirement incentives, but it can’t pinpoint the exact amount right now, said Business Manager Vicky Schwartz.

“The amount of savings is dependent on if we replace the person and what we bring the replacement in at,” she said. “But based on historical data, it should be a savings if we hire younger, newer teachers.”

For decades, the district has offered an incentive to teachers and administrators at the time they’re eligible to retire. This helps the district reduce personnel costs without terminating staff, she said.

In the past three years, the district has saved a total $422,730, which includes what the district spent on replacements.

At a district’s finance committee meeting on Thursday, members discussed the policy. The School Board approved at its last regular meeting paying $229,867 in early retirement payments over the next four years.

Details

The policy, established since 1980 and approved by the School Board, was originally designed to benefit certified licensed employees and the district.

By replacing high-salaried employees with lower-salaried employees, the district can save a significant amount while employees can voluntarily retire and receive extra money, Schwartz said.

Teachers and administrators receive the benefits over a four-year period of time. The average amount they receive is about $48,000 during that time, said Schwartz. For this school year, the district will have paid $825,629 in incentives, a total that includes new and past retirees.

Next year, the district has budgeted to spend about $800,000.

Teachers are eligible for the incentive if they’ve completed at least 10 years of continuous full-time service. They must also meet a requirement of the state retirement law called the Rule of 85.

If the combination of their age plus the years they’ve worked equals 85 or higher, they can retire with a full incentive from the district, but only if they retire the first year they’re eligible. If they retire later, the percentage is decreased by 10 percent each year, said Schwartz.

The average number of employees who take advantage of the incentive is about 17 per year, and the majority of these do so within the first three years, she said.

Finance committee members briefly considered whether the policy needed to be altered but decided against the idea.

Member Doug Carpenter asked about the savings. District data seemed to indicate that unless an administrative position was eliminated, the incentive program was actually costing the district money, he said.

Superintendent Larry Nybladh said the program has resulted in significant savings, even when higher-paid employees have taken advantage of it.

Later, Carpenter said he thinks the School Board should consider whether the position will be filled and how much replacements might cost.

“We may need to look at administrators (who retire) a little more carefully and be more inquisitive of those positions,” he said.