Dennis Leone: The Anti-spike rule

Dennis Leone to Molly Janczyk, March 14, 2007
Subject: Anti-Spike Rule

The anti-spike rule likely went into effect in the mid-1980s when many professors were loading up on summer classes in their final year of employment as a way to artificially boost their final average salary. The same is true for public school teachers who take 5 supplemental contracts in their final year (thinking it will help their final average salary) or for supts who receive a buyout bonus from the school board. For example, if -- in my last three years of employment -- I got a 3% raise, another 3% raise, and a 10% raise, STRS will only honor three 3% raises for the final average salary. That 10% increase in the final would be brought down to a 3% increase. I told the group that in my opinion, it makes perfect sense. The person receiving a 10% increase made STRS contributions for that higher amount only in his/her last year of work (instead of his/her entire career)..........so it would not be fair to base one's life pension, in part, on a spike he/she had in the final year. Doing so would mean that active teachers would have the burden of covering the increased costs.

Last month, during an appeal before the Board in exec session, one teacher argued that her increase in the final year was based on an "overload" of pupils she received. In other words, she got more money because she taught more kids. We told her, however, that a spike is a spike.........and I recall telling her that she would not want us to take away pension money if she had LESS kids due to her district's declining enrollment.

Does all of this make sense? It does to me.

I got burned personally with the anti-spike rule in a different way. My last 3 years were: 0% due to a board imposed freeze on everyone, 0% due to a voluntary self-imposed freeze I gave myself during an operating levy campaign, and a 3% base raise. So, in other words, my last 3 years were 0%,
0%, 3%. STRS, even though my 2nd 0% was a voluntary thing, gave me credit for only a 1% raise in my final year because THAT was the average of last 3 years. I shot myself in the foot and didn't realize it when I voluntarily took the freeze.

DL

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From Molly Janczyk, March 13, 2007
Subject: Re: Link to the report

Wonderful. So glad about OSBA as they seem a major obstacle. I know you were convincing! We are lucky to have you 'out there' informing such types.

What is the anti spike rule?

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From Dennis Leone, March 13, 2007
Subject: Re: Link to the report

Yeah, I know. By the way, I spoke to 75 administrators today (mostly supts) in Zanesville. HC was a big topic. After my remarks, some in the room expressed frustration with OSBA, given their acquired awareness that alternatives for solving the problem are few. As you might guess, there were several questions about calculating final average salaries and the anti-spike rule. Many are nearing retirement.

DL