ISD 194 looks to private sector for retirement changes
New contract aims toward fiscal responsibility
With inspiration from an agreement between the teachers union and the Lakeville School Board, District 194 administration and the board have worked out an agreement with nonunion employees that mildly increases compensation while increasing employees’ financial responsibility for health care costs and retirement, and brings performance assessment further to the fore.
The aim, said Director of Administrative Services Tony Massaros, was to craft a fair but fiscally responsible agreement.
The agreement, which the board passed last month, affects “nonaffiliated” employees, such as those at the administration level and in offices such as communications.
As with the new contracts with teachers, employees will share 50-50 with the district the cost for health insurance increases after the district pays the first 2.5 percent of the increase.
Retirement benefits will change, too.
This “reflects what’s been happening in private sector,” Massaros said. “(It’s a) transition from a system that rewards years of service to contributions from employer and employee.”
For starters, health insurance coverage for retirees’ families will cease.
For employees hired after July 1, 2011, the district will contribute $3,000 a year to an HRA account starting in the fourth year of employment and ending in the 20th year of employment (a $51,000 maximum), with the employee vesting in this account after 20 years of employment.
For those employees hired before July 1, the current agreement stands: Employees with 20 years of service and who are at least 55 years old will be eligible for single health insurance coverage until Medicare kicks in.
“This language again mirrors that of the teachers’ contract,” Massaros said.
Beyond health insurance, the retirement accounts will change.
Employees hired after July 1, 2011, will see a match from the district in their 403(b) retirement accounts of 4 percent of annual salary. The district will make no other retirement payments. Those hired before July 1 get that same 403(b) match (or higher, per precedent).
A final component of the agreement is a 1.75 percent raise. Nonaffiliated employees have not had a raise in nearly four years, Massaros said.
“We recognize the need for competitive compensation while addressing fiscal realities,” he said.
The previous contracts expired on June 30, 2011. The agreement took some time to come to fruition because administration and board members say they were working to craft the best possible agreements.
Board Member Roz Peterson was pleased with the results.
The performance tie “makes a big difference,” she said. “I want to thank everyone for being patient.”