John Curry and RH Jones on school boards paying part of an educator's retirement contribution

John Curry to RH Jones, January 5, 2007

Subject: Re: Bds. paying additonal retirement money for some

Bob,

The employer "pick-up" has been used in my county and surrounding counties for over a decade. In my particular district, the superintendent's STRS contribution is "picked-up" at 100%, i.e., he/she pays nothing to STRS out of his pocket toward his/her retirement. In this same district, the principals' salaries are picked up at a 50% rate -- no pick-up exists for classroom teachers. I am of the understanding that in many of the suburban districts around Cleveland that classroom teachers also have some or a portion of their salaries picked up. I am like you, I am not sure of the impact on STRS by this practice.

John
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From RH Jones, January 5, 2007

Subject: Bds. paying additonal retirement money for some To all: (FYI)

Having been in education since 1957, I have never heard of school boards, in lieu of pay raises, "picking up" a percent of an educator's retirement contribution. I am wondering if, in any way, this may hurt our STRS? Some school districts are doing this.

Dr. Damon Asbury, the STRS Exec.Director, has kindly taken his valuable time to answer some of my questions about the "pick-up on pick-up" plan used by some school systems to avoid raising base pays, especially of administrators. I thank him for responding. In short, he informed me that employer "pick-up" plans may classify employees into 3-groups: (1) superintendent; (2) administrators; (3) teachers. And, this has not changed since 1980. Further, in response to a question of mine, he wrote that state colleges and universities may do this as well. And, he wrote: "Some may pay all or part of a member contribution in addition to salaries."

However, the inclusion of this "pick-up" into the final average salary (As Asbury states that the majority of the cases are doing) raises a question to me: Does not this hurt the STRS unfunded liability -- if and when certain educators get their final averages inflated in the above manner? I think so. It seems to me: That giving it at the time of the final years of employment is just another school district ploy to reward some at the expense of all STRS members. Should it be stopped? Higher authorities than this retired teacher will have to decide. The STRS has been looking into activities that artificially raises an educator's final average. Perhaps this is one of them?

Robert Hudson Jones, a STRS retired teacher member and union lifer