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Posted at 10:02 AM ET, 11/17/2011

D.C. says there’s no money for contract early retirement provision

Updated 5:50 p.m.

The provision built into the 2010 contract between DCPS and the Washington Teachers Union (WTU) seemed reasonable. Instructors with good IMPACT evaluations and 20 years of service were eligible to take early retirement with full benefits if they were excessed — their jobs eliminated due to budget, enrollment or NCLB issues — and unable to find other positions in the system.

But DCPS now says there is no money for the early retirement option. It also points out that the contract never made that promise. The pact stipulates that the retirement provision “shall be subject to necessary government and budgetary approvals.”

The retirement offer didn’t exactly touch off a stampede. WTU says eight teachers applied; DCPS says five. According to Peter Weber, deputy to DCPS chief of staff Lisa Ruda, retirement and benefits for the five teachers would cost about $2 million.

“This cost proved to be prohibitive,” Weber said.

This raises a couple of questions. Before the D.C. Council approved the contract last year, Chief Financial Officer Natwar M. Gandhi certified that the District could pay for what was promised.

Weber said that Gandhi’s fiscal impact statement was based on the best projections available, but that it was impossible to know with certainty how many teachers would take the option “and how far each of those individuals would be from retirement, and thus how much the option would cost for each.”

Gandhi’s position is that the funds exist. “The money is there,” said his spokesman, David Umansky.

The $1.5 billion Teachers Retirement Fund looks flush. The most recent actuarial analysis posted on the D.C. Retirement Board (DCRB) Web site placed its “funded ratio” at 110.8 percent. That means for every dollar it owes future retirees, it has about $1.11 available.

Weber didn’t respond to follow-up questions. Phone and e-mail messages over the last week to D.C. Retirement Board Chairman Michael Warren, executive director Eric Stanchfield and chief operating officer Sheila Morgan-Johnson also yielded no response.

Deborah Reaves, Stanchfield’s excecutive assistant, e-mailed a statement late Thursday afternoon that says it is not their issue.

“This is a DCPS initiative. DCRB is the Plan Administrator for the District of Columbia Teachers’ Retirement Fund and is involved in the retirement process only at the point that the plan member retires.”

WTU president Nathan Saunders has filed a grievance with the District. There is a clause in the contract that places the city in “material breach” if it fails to meet its obligations. It says that the consequences of the breach will be settled by a court, an arbitrator or the parties themselves.

Saunders said he thinks that the early retirement provision was bogus to begin with.

“It is my belief that they never planned on funding it,” he said.

By  |  10:02 AM ET, 11/17/2011

 
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