By: Health Insurance
Submitted: 2009-12-25 16:50:23 | Word Count: 633
The Wauwatosa School Board has ratified a contract that will give steep pay raises to the district's most experienced teachers while also winning an important concession for the district with a change in retiree health insurance benefits.
The agreement, approved by the board on Monday and by the Wauwatosa Education Association on Friday, increases teachers' salaries and benefits by 4.76% this school year and by 4.25% in the following year. The top pay for the most experienced teachers will increase by more than 8% to $74,030. Teachers with doctorate degrees can receive annual stipends of $1,415.
[ advertisement ]
With the agreement, district officials were able to accomplish a goal by getting teacher approval to change health insurance benefits for future retirees. While teachers now receive health insurance after they retire based on the number of years they have worked for the district, teachers hired after July 2010 will be awarded stipends tied to their final salaries with which they can pay for their health insurance, said Daniel Chanen, Wauwatosa's director of human resources.
"Given the rapidly rising cost of health insurance vs. wages, this is projected to reduce our liability for post-retirement benefits from a third to a half," he said. "Of course, that's obviously for new hires. So, in terms of its overall impact on the district, it's going to take some time to take effect."
The district's total liability for non-pension retirement benefits was estimated at $88 million in an actuarial study conducted last year, said John Mack, the district's director of business services. Of that, $69 million was tied to teacher benefits, he said.
"We addressed a major, major issue that a lot of school districts have yet to address," Mack said. "I think that was a huge factor in our board giving the teachers a little bit higher package for the settlement."
On Monday, a conservative think tank criticized Milwaukee Public Schools for not addressing the issue. The unfunded liability for retiree health benefits at MPS is projected at $2.6 billion.
Other districts also have targeted the benefit in negotiations, especially after a change in government accounting standards forced them to record the liabilities on their financial statements.
Glenn Schilling, superintendent of the Hartland-Lakeside School District, has been raising concerns about the effect of retirement costs on his small Waukesha County school system. This year, the district expects to spend about $620,000 on non-pension retirement benefits.
"The long-term health of the school district has to depend on the changing of those" benefits, he said. "Our school system is not going to be able to survive without that."
In Wauwatosa, the district accomplished the change in retiree benefits by agreeing to a compensation increase for its teachers that is higher than the average settlement so far for the current school year, which the Wisconsin Association of School Boards has put at 3.75%.
Negotiations in the previous contract ended when the district imposed a qualified economic offer, an option eliminated by the Legislature this year that allowed districts to avoid arbitration by offering an annual 3.8% increase in salaries and benefits.
"I think both parties came to the table really wanting to work toward a voluntary agreement, and I think the district realized they were really out of step with area school districts in terms of compensation," said Sandy Nass, a director for the West Suburban Council who negotiated on behalf of the WEA.
