Retirement Offset Debacle Continues

Post date: Dec 18, 2010 2:23:14 PM

On December 16 the State Board of Education voted 4-3 to approve sending $18 million to the Oklahoma Teachers’ Retirement System to cover half of the retirement offset. So it appears teachers may be off the hook for paying that into the system, but districts will likely be left holding the bag since the board simply redirected money that was being paid to districts to help cover mandated health insurance.

If the Bartlesville district is eventually forced to fully cover the cost of the retirement offset on its own, the amount would approach $300,000 since in FY2010 the district's offset flow-through was $290,466.33.

Who was required to pay the offset became a matter of contention last summer when the legislature sent funding to the State Department of Education (SDE) without line-item instructions for how to spend the money. The SDE chose to not to allocate funds for the retirement credit, but instead sent the money to schools to cover an expected increase in health insurance rates.

That left some wondering if teachers would have to cover the amounts, ranging from $60 for those on step 0 up to $1378 for those on step 25. While the matter was referred to the Attorney General, the district continued to handle payroll normally, so teachers were not absorbing the cost of the offset.

A recent Attorney General’s opinion said the SDE is required to fund the offset whether the legislature instructs it to or not. The SDE will now send money intended for schools to cover health insurance premiums to the TRS on behalf of Oklahoma teachers. Although health insurance rates did not increase as much as expected, that still leaves districts with a funding gap, and even now not all of the offset is accounted for. The State Board of Education voted to ask the Legislature for a supplemental appropriation to cover the remaining portion of the offset.

The Oklahoma Education Association had lobbied the SDE since July to fund the retirement offset, and applauded the State Board’s decision. It was the Association’s belief that the cost could eventually fall to teachers and that the law clearly stated the offset is a responsibility of the state.

Stephen Crawford, executive director of the Cooperative Council for School Administration, agreed with the OEA, telling the board that the TRS credit should be a priority at this time. However, Ginger Tinney, the Executive Director of Professional Oklahoma Educators, took a contrary stance and encouraged the board members to fund health insurance instead of the retirement offset.

State Superintendent Sandy Garrett broke a 3-3 tie vote on the proposal to send the money to the TRS. Also voting “yes” for the proposal were Betsy Mabry, of Enid; Gail Foresee, Shawnee; and Gayle Miles-Scott, Oklahoma City.

OEA President Becky Felts is encouraging all OEA members and their colleagues to contact their local legislators and encourage them to approve the request for a supplemental appropriation to fully fund the offset. The legislature opens its spring 2011 session on Feb. 7.