— Melissa Hale-Spencer
GUILDERLAND — Should the state change the rules for teachers’ pensions"

Guilderland School Board member Richard Weisz thinks it should. He’d like the board to push for a change in state legislation that would authorize school districts to offer 401(k) plans or to come up with a new set of rules for the Teachers’ Retirement System.
Weisz told the other school board members at their meeting Tuesday night that, since Guilderland’s salaries for teachers are average for the state, "In a way, we’re subsidizing districts that pay more."
Secondly, Weisz said, as costs increase for things like energy and health insurance, "We’re being forced into a corner where the only way we can cut money is to cut staff."

The less the state mandates, said Weisz, the more flexibility districts have.
"All of the major industries with dedicated benefit plans are crashing," he said. "Sooner or later, it will come to us."
Weisz also said, "I think we can do as well if not better for our teachers...as well as save money for our taxpayers."

Union views

Chris Claus, president of the teachers’ union at Guilderland, told The Enterprise after Tuesday’s meeting that he is not yet well versed enough on the 401(k) plan to offer a knowledgeable comparison with the current Teachers’ Retirement System.

He is, however, very knowledgeable about the current pension system and explained it in detail, and then went on to raise some concerns about switching.

The Teachers’ Retirement System has gone through four phases, called tiers. One part of Weisz’s two-pronged proposal is to consider a fifth tier, which would require state legislation and would usher in a new era.

The first tier, Claus said, existed until 1973. The teachers themselves made no contribution and they were permitted a full pension after 20 years of teaching.

In the second tier, there were still no teacher contributions but 30 years of teaching were required for a full pension.

Claus used himself as an example. He began teaching in 1974, earning $10,000 a year.
"Let’s say the amount school districts were assessed was 5 percent. The school would then pay $500 to the Teachers’ Retirement system," for his pension, Claus said. "I contributed nothing."

In the third tier, teachers were required to contribute to the retirement system and 30 years remained the minimum service for full pension; a Social Security reduction of pension was also involved.

In the fourth tier, currently in use, teachers contribute as they did in the third tier, and 30 years remains the minimum for full pension but the Social Security reduction has been eliminated.

In general, Claus said, a teacher can collect a pension at the age of 55, and the pension continues until death.
Asked what the pension pays, Claus gave this equation: "Roughly speaking, a teacher’s pension equals the number of years in teaching, times 2 percent of the average of your highest three years of salaries. So, if you have 30 years of teaching, times 2 percent, that equals 60 percent. You take 60 percent of your highest three-year average."
Asked what he thought of Weisz’s assertion that, eventually, school districts will be faced with the same dilemma private industry is now facing, not making good on promised pensions, Claus said, "It’s hard to ignore the news. Dedicated pension funds are crashing."

But he drew an important distinction between private companies and the Teachers’ Retirement System.
"Private companies can borrow against their pension funds and that weakens them," said Claus. "The Teachers’ Retirement System is completely protected from any kind of raiding or liens. It’s more secure."
He went on, "The 401(k) plan is an investment account and it can make a lot of money or it may not make as much...With the 401(k), employees and employers may both contribute. If there were a 401(k) for school districts, we’d want the school district to contribute.
"The only way I think a scheme like this would save a school district money is if contributed less than now."

Currently, Claus said, teachers contribute 3 percent of their salary but for less than 10 years while school districts contribute for the duration of a teacher’s career.
Over the years, the required donations from school districts, Claus said, have ranged from over 20 percent to as low as three-tenths of a percent. "It has everything to do with the stock market," he said. "The problem is, school districts can’t decide, ‘We’ll always contribute 3 percent.’"

Claus said changing legislation to allow school districts to bank the money, so they could better plan their annual budgets, shielded from fluctuation, would make sense.
Referring to Weisz’s proposal, Claus said, "I appreciate Dick is looking out for the school district. I don’t know if this is the way to do it; maybe it is."
He also said, "Teachers are teachers; we’re not investors." He indicated that the system in place now ensures teachers will have a reliable income until death; while a 401(k) plan allows a person to "accumulate large sums of money without tax liability," Claus said, "there’s no guarantee at the end."

Claus said this is not an issue where his union will be able to move quickly. He said he himself would be speaking the next day to an investment banker and would also consult with experts at the State Retirement System and the New York State United Teachers, of which the GTA is an affiliate.
NYSUT, Claus said, has taken "a definite position on the privatization of Social Security: They are opposing it."
He concluded, "I would infer from that any similar idea that acts like privatization of the Teachers’ Retirement System would probably not get a very favorable response from NYSUT."

What next"

Weisz told the other board members on Tuesday night that he had spoken to the New York State School Boards Association which, in an annual fall conference, decides on resolutions it will lobby for.

Board President William Brinkman said that the association has a June 15 deadline for submitting resolution proposals.

The next school board meeting is scheduled for June 21. Board member David Picker said the board’s procedure is not to vote on an item at the same meeting in which it is proposed. He recommended either proposing a resolution from the floor at the association’s fall convention or waiting until next year.
"Everything we do in this district is done in a collaborative way," said Picker, indicating the teachers’ union should be consulted and the board should not proceed without the "support and equal enthusiasm of the teachers."

In a straw vote, five of the nine school board members — Gene Danese, Barbara Fraterrigo, Thomas Nachod, Colleen O’Connell, and Weisz — indicated they would like to call a special meeting in order to meet the June 15 association deadline.

Fraterrigo said she liked Weisz’s idea and it would benefit the teachers; she pointed out another time the board had acted on an issue at the same meeting in which it was proposed, calling that a precedent.
Superintendent Gregory Aidala said that, while it would be possible to send a proposal for a resolution to school board members over the weekend, with a meeting scheduled for Monday morning, "It’s a very rushed schedule."

President Brinkman said it would probably be without the Guilderland Teachers’ Association.
"It’s a bad idea to rush it," said board member John Dornbush. "I don’t think it’s fair to the GTA."
Danese said he, too, would like to use "the collaborative approach" and that a resolution could be developed before the association’s convention in October.

Board member Linda Bakst suggested the board vote at its next regularly-scheduled meeting, June 21, to form a committee to look at the issue.

Brinkman suggested that it will be a collaborative committee that will work with the teachers’ union.
"You don’t always get these brainstorms in a timely fashion," he said.
Weisz accepted the idea of a committee. "I just want to get the ball rolling," he said.

David Ernst, spokesman for the New York State School Boards Association, confirmed for The Enterprise yesterday that the June 15 deadline for resolutions is firm. Although a resolution can be proposed during the convention, from the floor, it is difficult procedurally, he said, requiring a two-thirds vote from the delegates.

Ernst said that currently the state legislature has no bills similar to Weisz’s proposal so the association has taken no formal position.

Generally speaking, he said, the association would favor a plan that would save public employers pension benefits.

Since the stock market faltered after the terrorists’ attacks of Sept. 11, 2001, Ernst said, employer contributions to pension funds have gone up.
"Ever since the eighties," he said, "pension reform has all been in one direction and it ain’t downward."