For legislative change
Task force to study teachers’ pensions

GUILDERLAND — An idea hatched by the Guilderland School Board has received state-wide backing.

A task force of major stakeholders will look at ways to fund teachers’ pensions while protecting taxpayers.
"We’re looking to help taxpayers and preserve the pension system," said Linda Bakst, the board’s vice president. She stressed, "The integrity of the system needs to be maintained."

Bakst represented Guilderland last month at the New York State School Boards Association convention in Rochester where she led the initiative to introduce the resolution during the annual business meeting.

The task force will include representatives from NYSSBA, the New York United Teachers, the National Education Association, the New York State Council of School Superintendents, the New York State Association of School Business Officials, and the New York State Teachers’ Retirement System.
"We’re hoping to have a legislative agenda come out of it," said Bakst. "That’s the reason to have them all at the table," she said of the groups that represent both teachers and school boards, among others.
"Then all the groups hopefully would lobby for that agenda," Bakst said.

The task force is to present a proposal at the 2006 NYSSBA convention.

"Its time has come"

Guilderland School Board member Richard Weisz first introduced the idea at a board meeting this summer. He asked that the board push for a change in state legislation what 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 said then, 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, Weisz said, 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."

David Ernst, spokesman for NYSSBA, told The Enterprise in June that, at that time, the state legislature had no bills similar to Weisz’s proposal so the association had 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."

He also said that, since Guilderland would not be meeting the June 15 deadline for resolutions, it could make a proposal during the convention, from the floor, but that is difficult procedurally, requiring a two-thirds vote from the delegates.

Bakst said that, on Oct. 29, easily 75 percent of the 250 voting delegates at the convention supported the resolution.
"A lot of people should get the credit," she said.
Guilderland Superintendent Gregory Aidala "did a lot of legwork," she said; he sent out letters to all the superintendents so they could inform their school boards.
"We went to a lot of local meetings," Bakst said, such as the Capital District School Boards Association. "We met with NYSSBA itself," she said.
Referring to the other Guilderland board member who attended the convention, Bakst said, "Barbara Fraterrigo and I talked to people. I got out a flyer."
Summing up the widespread support, Bast said of the resolution, "Its time has come."

"We’re not investors"

In June, just after Weisz made his proposal, Chris Claus, president of the teachers’ union at Guilderland told The Enterprise that the Teachers’ Retirement System has gone through four phases, called tiers, since the first tier in 1973.

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."

Claus also drew an important distinction between private companies and the Teachers’ Retirement System.
"Private companies can borrow against their pension funds and that weakens them," he said. "The Teachers’ Retirement System is completely protected from any kind of raiding or liens. It's more secure."
He also said, "The only way I think a scheme like this would save a school district money is if it contributed less than now."

Claus did say changing legislation to allow school districts to bank the money, so they could better plan their annual budgets, shielded from fluctuation, would make sense.
He also said, "Teachers are teachers; we’re not investors." He indicated that the system in place now ensures teachers will have reliable incomes until death while a 401(k) plan allows a person to "accumulate large sums of money without tax liability," but, Claus said, "There’s no guarantee at the end."

"Long-term solution"

Asked if the task force were charged with considering the two recommendations made by Weisz — authorizing districts to offer 401(k) plans or coming up with a new set of rules for the Teachers’ Retirement System — Bakst said the charge was more general: to come up with financing strategies.
"There are definitely other ideas" to consider, she said.
She gave the example of allowing school districts to have a reserve fund. "In a better year," she said, "you could set aside money so in a lean year, you could draw it out."

The mandated amount that school districts are required to pay to the pension fund has ranged from as high has 20 percent to as low as three-tenths of a percent.
"A number of years, we were balancing our budget on the fact the [stock] market was good and we didn’t have to pay as much," said Bakst.

Since 2001, the amount districts must pay has risen dramatically. The amount that Guilderland had to pay this school year was an increase of 48 percent or $862,000 over last year.

Another change the task force might consider, Bakst said, is taking retirement payments out of the state-set cap if a budget is defeated by voters and the district adopts a contingency plan.
Taking payments outside the cap, she said, could prevent "massive cuts."
Referring to Weisz, Bakst said, "The things Dick suggested are also on the table."
"This is a long-term kind of solution," Bakst concluded, "but one of the most important. We often feel our hands are tied by state mandates. I feel pretty good about this."