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In an early morning meeting on July 17, the District 65 School Board authorized the District, on behalf of retired teachers, to reimburse the Teacher Retirement System (TRS) for amounts TRS overpaid those teachers in pension benefits in the last four years due to extra sick days being included in their credited service years. In exchange, the District will require teachers to release the District from future liability regarding any reduction in pension benefits due to the inclusion of extra sick days.
The issue surfaced on June 15 when about 15 teachers showed up at a School Board meeting to protest the reduction in their pension benefits, which they blamed on the District. Jon Jacobson spoke on behalf of his wife, while teachers lined up behind in a show of support.
Mr. Jacobson said more than 20 teachers who retired in 2005 and 2006 received notices from TRS that their credited service years for pension purposes were being reduced. “TRS claims that 170 extra sick days given by District 65 in 2005 as service credit to those willing to retire were illegal under a long established TRS rule,” he said.
Teachers were told to refund to TRS by July 20 thousands of dollars in “overpayments” during the last four years, Mr. Jacobson said. In his wife’s case, Mr. Jacobson said, “We are told to refund $5,600 in ‘overpayments.’” He said his wife’s pension check would also be reduced each month going forward.
He added that the District offered extra sick day credit to encourage early retirement in 2004, and said, “Teachers retired earlier than they otherwise would have, relying on the extra year of sick day service credit offered by the District to boost their pensions.”
At the July 17 Board meeting, Dr. Murphy said the District and its legal counsel had conversations with TRS and “many of the TRS calculations have been favorably addressed.” He said TRS also agreed to extend the July 20 deadline to refund the overpayments.
Dr. Murphy said Mary Brown, chief financial officer, had been in contact with many retired teachers and explained the District’s offer, under which the District would assume responsibility to repay the amounts that TRS had overpaid, in exchange for a release of future liability.
He told the RoundTable that going forward, the maximum impact on a retired teacher with an ending salary of $80,000 would be $1,760 less per year in pension benefits than they would have received if credited with the extra sick days.
Dr. Murphy said, “Going forward, we understand they [the teachers] will receive the amounts to which they always were entitled based upon their years of service to the District or other school districts during their professional careers.” He said the District valued its retired professionals and that the District has attempted to resolve this issue amicably and fairly.
Mr. Jacobsen told the RoundTable, expressing his own view, that teachers were appreciative of what the District is offering, but were disappointed that they are not getting some compensation for the reduction of pension benefits they will incur in the future.