School workers looking to retire will face new rule
By Phyllis Moore
Published in News on November 9, 2014 1:50 AM
Wayne County Public Schools teachers and employees considering retiring mid-year need to know there is a new caveat -- there might be a penalty for retiring early.
Dr. Marvin McCoy, assistant superintendent for human resource services, said he has been keeping a close eye on legislation stipulating that those retiring after Jan. 1 might feel the pinch, depending upon their age and time accrued with the district.
"I was very surprised," he said, explaining that those with fewer years of employment may fare better if they work until age 60. "I do have several people that are inquiring about retirement, whenever they're eligible. They're just trying to see how much time they have in, to see when they could possibly retire."
There really is "no pattern" to those considering mid-year retirement, McCoy said, and there appears to be a natural progression rather than a wave of departures.
"They're not fleeing the career field," he said.
Much of it is simply the demographic.
"When you start talking baby boomers, I think that's more the case than anything," he said. "Many of the baby boomers are the care providers for their parents. There's a large number, many have come in to inquire about retirement. Instead of going for 35 or more years, they're saying, 'I'm at 25 or 30 or I started working late, so how would my retirement be affected if I went out early?'
"Exact numbers I cannot give you, but they're in critical areas -- math, science and exceptional children as well as the K-6 arena."
The mid-year retirement trend is not limited to educators, either.
"We have them across the board," McCoy said. "The baby boomers that are the caretakers for their parents are having to leave after the 30 years or some leave after 20 years and some individuals are having health issues themselves. So I have teachers, teacher assistants, cafeteria workers, custodians and the whole kit and caboodle."
The majority might not even be aware of the pending legislation that could impact their retirement checks, he said.
The bill in question, House Bill 1195, "Anti-Pension-Spiking Legislation," establishes a contribution-based benefit cap. It is slated to go into effect Jan. 1, 2015.
"If you retire before 60, you could be penalized," he said.
It all comes down to how long they have been an employee.
The average normal age range for those retiring from the school system can be 50 to 53 years old, he said. Those with 30 years on the job would not be affected by the legislative policy, no matter their age.
HB 1195 contains a suggested multiplier for anyone opting to retire with fewer than 30 years. At age 59, for example, the percentage reduction is 7 percent.
"The old retirement was 80 percent (of their salary). This new legislation is saying 7 percent less, so it would be 73 percent," McCoy said.
The amount goes incrementally higher for each year, he added, so that those who are age 50 stand to have their retirement pay reduced by 50 percent should they opt for early retirement.
Because of the potential pay cut, McCoy said his role now becomes not only one of educating those considering early retirement, but encouraging them to weigh the merits of staying on longer, even by a year or two, if possible.
In a district where there has not been a pay raise for the past four years, it would be wise to weigh options, McCoy said.
Meanwhile, his office is faced with not only losing educators to mid-year retirements, but continues to battle departures to other districts.
"There's still the jockeying between Wake and Johnston (counties), school districts that pay more than us," he said. "It's the proverbial catch-22."
With a teacher shortage and the numbers down in the schools of education, as well as the state's loss of its Teaching Fellows program, districts are reliant upon in- and out-of-state recruitment efforts and lateral entry educators, who have a bachelor's degree, but lack teacher certification. The lateral entry program allows teachers to enter the classroom while completing requirements for the certification.