School Board analyzes post-retirement program
A program that pays retired Henrico school system employees a percentage of their final annual salaries in exchange for their part-time work within the system saves considerable money on substitute teacher expenses but could provide even more value to the system with several adjustments.
That was the conclusion of an in-depth analysis completed by county and school system finance officials, who presented their findings to the School Board Sept. 13.
At the beginning of the current fiscal year in July, the board increased the requirements of retirees who participate in the Post-Retirement Earnings Plan (PREP) program, mandating that they work at least 28 days during the school year in order to receive pay equal to 20 percent of their final annual paychecks. Eligible retirees may participate in the program for a maximum of seven years; 388 participate currently.
It was the third change made in the past three years by the board, which is seeking to squeeze more value from the 32-year-old program while reducing its annual cost. The PREP budget has dropped from its peak of $8.9 million in 2009 to $5.6 million during the current fiscal year. Prior to this year’s change, PREP participants received 22 percent of their final paycheck in exchange for working 24 days a year.
The program was created in 1980 as a way to provide a benefit to employees, encourage early retirement and save the school system money. During its budget process this spring, the School Board sought specific data to better determine the effectiveness and value of the program. But last week’s work session was proof that categorizing that value is a challenging exercise.
Though it’s relatively easy to determine the cost savings that results from using PREP retirees as substitute teachers – since there is a standard rate of pay for substitutes – it’s much more difficult to determine the value of administrative retirees who perform a variety of other responsibilities, Henrico Finance Director Gene Walter told the School Board.
Walter and his staff studied 507 PREP participants who entered the program during the past seven years and whose replacements were hired immediately upon their retirement. (The study didn’t include nearly 50 other participants whose former positions were eliminated, he said.)
Of those 507, 317 were retired teachers whose combined participation during those seven years saved the system $1.18 for each $1 it spent on the program, Walter said.
But Walter and his analysts could not determine a dollar-to-dollar estimate for the other 190 participants because their roles within the system were less defined and often entailed duties for which the system wouldn’t have hired temporary help.
School system officials recommended that the board consider a number of changes to the program that would make it easier to determine a clear value for each dollar spent in the program, including:
• assigning every participant to serve either as a substitute teacher (if qualified) or to fill another capacity with specific and direct calculable benefit to the system (such as SOL remediation);
• capping the maximum allowable salary to a participant at $90,000 annually;
• increasing the number of required years of Henrico service from 10 years to 15 years for eligible retirees and reducing the number of required years of service in the Virginia Retirement System from 16 to 15;
• requiring that interested participants notify the system of their intent by Dec. 1 annually and begin their participation the following July 1 (as opposed to the current system, which permits entry throughout the year – a minimum of 30 days after retirement – and makes budgeting for the program less predictable);
• grandfathering all current participants under the current standards until they have completed their seven years or dropped out of the program.
“We have determined that there’s a large responsibility on everyone’s part here to develop something that’s going to be very beneficial and cost-effective and also value-added to the school system,” Superintendent Pat Russo said during the work session. “That’s where we want to move this program.”
Current guidelines require that participants be at least 50 years old without having attained the age for full, unreduced Social Security benefits. The program initially was designed in part to serve as a bridge between retirement and Social Security, HCPS Finance Director Kevin Smith told the board. Using current standards, 854 current school system employees would be eligible to participate in the PREP program if they retired, HCPS Human Resources Executive Director Howard Banks said.
The board is expected to discuss the recommendations and the PREP program again at a meeting next month.
Citizen Staff Reports 10/12/2015
HandsOn Day 2015, which will feature 1200 volunteers serving more than 65 nonprofits in Greater Richmond, will take place Oct. 17 from 9 a.m. to 1 p.m. Among the projects in Henrico or surrounding communities that need volunteers are: installing GardenFest lights Lewis Ginter Botanical Garden, distribution center assistance at Feedmore, pumpkin carving with residents at SupportOne, work and play at Housing Families First, paint for independence at Heart Havens, spruce up the shelter and clean sweep at Harbor House at Safe Harbor, pinwheel project at REAP and Kidney Walk prep at National Kidney Foundation Serving VA. > Read more.
Citizen Staff Reports 10/12/2015
Virginians who want to plant beneficial plants for bees, butterflies and hummingbirds have a new resource at their fingertips. The online Virginia Native Plant Finder now lets users search for native plant species that benefit pollinators. The tool, which is managed by the Virginia Natural Heritage Program, is free and easy to use; searches can be completed on desktops, tablets or smartphones.
Native plants are those that grow where they evolved; they have traits that enable them to adapt to local conditions. The Virginia Native Plant Finder lets users create their own custom native plant lists by selecting from dropdown menus. > Read more.
Growlers to Go has opened its second area location – in Short Pump, next to Trader Joe's.
Unlike the flagship store on the Boulevard in Richmond, this location is equipped with a Tasting Room, offering customers the opportunity to drink pints or tasting wheels as well as order snacks on premises. > Read more.
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CalendarThe Short Pump Ruritan Club is seeking crafters for its 25th annual Short Pump Ruritan Craft Show on October 17 at Short Pump Middle School, 4701 Pouncey Tract Rd. For… Full text