Riverhead saving at least $1.5M with teacher retirement incentives
The Riverhead School District is expected to save at least $1.5 million in the 2016-17 budget now that 15 teachers have agreed to take new retirement incentives.
The Board of Education offered similar incentives in 2013 to the Riverhead Central Faculty Association in order to present a budget under the state-mandated tax cap. About 20 teachers took the offer at that time, which saved the district nearly $2 million in the 2013-14 budget.
This time around, the school board and RCFA have agreed to offer two incentive options: $25,000 or subsidized health insurance coverage.
RCFA president Lisa Goulding signed off on the agreement Jan. 8 and the school board unanimously approved it during its meeting Tuesday night. School board member Ann Cotten-DeGrasse was absent.
The latest incentive offer is in addition to retirement benefits teachers are already guaranteed through their 2012-17 union contract between the RCFA and school district.
In that contract, teachers are already entitled to either $40,000 or subsidized health insurance coverage. With the newest retirement incentive agreement, retirees could opt to receive $65,000 total if they forgo health insurance.
The News-Review received copies of both the teachers union contract and the latest retirement incentive agreement through a Freedom of Information request. [Scroll down to read the documents]
When comparing the retirement benefits and incentives, the rates for both offers on subsidized health insurance coverage are the same: The district’s contribution shall be 75 percent on individual coverage — plus 60 percent of the difference between individual and family coverage for those that select the family plan.
According to a memo from Ms. Goulding to the RCFA membership, the current monthly subsidized rates are nearly $200 for individuals and about $600 for families.
These rates would remain in effect until the retiree becomes eligible for Medicare, both agreements state. At that time, the district’s contribution shall be reduced to 50 percent on individual coverage — plus 30 percent of the difference between individual and family coverage for those that select the family plan.
While the terms listed in the union contract for the $40,000 payment is described as a “one-time lump sum payment,” the $25,000 incentive amount would first be paid through the retiree’s unused sick time. The district would then pay the remaining balance through its reserves.
Both Ms. Goulding and superintendent Nancy Carney responded to interview requests via email and described the latest agreement as a win-win situation.
“The district and the RCFA have entered into a retirement incentive that will yield at least $1.5 million in savings in next year’s budget by replacing higher paid teachers with newer ones who make significantly less,” Ms. Carney said. “We are thankful for the years of service that our retiring teachers have given this district and we wish all the retirees well as they embark on the next chapters of their lives.”
Ms. Goulding described the agreement as a “mutually beneficial retirement incentive to our eligible members.”
“We’re hopeful that the savings realized by the district will be used to maintain and strengthen programs vital to the growth of our student body,” she said. “Let us be the first to not only wish our future retirees well, but also to celebrate them for the work they have done on behalf of the community. Their contributions will serve as a guiding influence for generations to follow.”
Photo: Riverhead school district superintendent Nancy Carney at last Tuesday’s Board of Education meeting. (Credit: Jen Nuzzo)
Retirement incentive agreement (January 2016)
