Retroactive benefits unfair

The county school board’s decision to reconsider tonight an earlier vote in which board members approved creation of a pension plan for themselves owes mainly to public criticism about two issues. One is the use of education funds that might otherwise be used for classroom needs. The other is blowback for rushing through the plan without advance notice and with little discussion of the issue. Those are fair concerns, but they shouldn’t necessarily mean that the pension plan should be retracted. A fairer compromise would be to limit retroactive payments for prior service.

Absent retroactive application, the annual pension benefit for all nine members of the school is modest relative to the overall school budget. It would be fixed at $750 annually for each of the nine school members, or $6,750 annually. Each member’s pension contribution would be deposited in a qualified retirement plan of their choosing, and that would be the end of the school system’s liability and responsibility for the plan. There would be no defined benefits under the plan, other than the $750 the school system would contribute yearly to the member’s designated retirement fund.

Tommy Franz, the system’s finance officer, said the plan was designed to keep it “simple” and limit the system’s financial obligation and future fiscal liability. That’s sensible and affordable.

What makes the plan much more costly to originate is the lump-sum, one-time payment of $54,750 that the system would contribute to eligible board members — those presently on the board as of Aug. 1— for their prior years of school board service.

The biggest recipient under that criteria would be Janice Boydston, who has served continuously on the school board for 29 years, counting service on the prior city school board. She would receive a one-time payment of $21,750 before she rotates off the school board on Sept. 1. The next largest recipient would be Everett Fairchild, who assumed a seat on the board in 1998, a year after the merger of the prior city and county school systems. Fairchild, notably, voted against the pension plan because it was introduced without amply notice.

We mistakenly said on this page last Saturday that the cumulative payments of the pension benefit would become annual payments. That is not the case. We regret the error.

Since the plan’s annual costs are relatively modest, it would seem affordable and fair to leave the plan intact if the retroactive feature could be dropped. Retroactive application, in any case, distorts the fairness of any increase in benefits.

As a general rule, elected officials should not be allowed to increase their own salaries or benefits during the term to which they are elected. That is patently self-serving. Many elected bodies have decided, rightly, that they should limit their ability to fix pay and benefits for their office only prospectively, by stipulating increases for the officials who will assume their seats in a new term. And preferably, such votes should come well in advance of the closing dates for candidates for the office to file petitions to get on the ballot for the next election.

That process removes the political onus on both existing and newly elected officials, by making officials subject to a referendum, of sorts, on any increase in salaries and benefits.

The school board’s most desirable benefit, in any case, may be the access granted board members to participate as employees in the school system’s health insurance plan. For a family-coverage policy, that is about as valuable, if not more so, as the board members’ $10,372 salary. The yearly pension benefit of $750 would pale by comparison.