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.
For the third consecutive year, the Canterbury Recreation Association in Short Pump donated the most meals to the fourth-annual "Dunk Hunger" campaign, which raises money and food donations for FeedMore's Central Virginia Food Bank. Swim teams and community pools throughout the region combined to raise the equivalent of 77,404 meals this year, with the Canterbury group earning the Gold Medal, with 17,454 meals contributed.
CRA will earn a winners’ bash Aug. 24 from 3 to 5 p.m. at its pool on Pump Road.
“Our pool has adopted Dunk Hunger into its culture with fun ways to raise food and funds," said Canterbury’s Dunk Hunger chairman Jack McSorley, a Freeman High School junior. > Read more.
The last Rock ‘n’ Roll Summer outdoor concert at West Broad Village, scheduled Saturday, Aug. 22 from 7 p.m. to 10 p.m. in Short Pump, will feature a salute to the upcoming UCI Road World Cycling Championships, coming to the Richmond region next month. As an all-girl band entertains the public with an AC/DC and Foreigner tribute, representatives from West Broad Village will accept donations of children’s new and lightly used bicycles for redistribution to youngsters at the Virginia Homes for Boys and Girls. > Read more.
Bifocals at CAT’s first show for CAT’s 52nd season is Thanks Mitch by Pat Walker. Thanks Mitch will play at CAT Theatre on Monday, Nov. 9 at 8 p.m. and on Friday, Nov. 13 at 2 p.m. The production will also tour the Richmond area.
Mitch and his wife, Verna, are at their niece’s wedding when Mitch has had all the celebrating he can take. Verna settles him and his crossword puzzle book into an easy chair in the room next to the reception and promises to check on him later. Then one wedding guest after another comes into the room agonizing over a personal problem. Mitch keeps doing his crossword puzzle and somehow ends up saving the day. > Read more.
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