Later Retirement Doesn’t Harm School Districts’ Payroll Costs

The notion that forcing teachers to work an additional five years before retirement will cost districts money came up during my appearance on the Dan Yorke Show, last week, and it apparently has some currency in the General Assembly. Obviously, though, a replacement hired on a five-year delay will cost less than one hired earlier until he or she hits step ten, so to see how the balance works out, I’ve taken a look at the numbers.
The upshot is that, in the long run, the later retirement saves the district money in salary — which doesn’t factor in the post-employment benefits, like healthcare, that it would have to pay for five additional years of retirement under the current system. (In some districts, a later retirement date would eliminate their post-employment healthcare costs entirely.)

0 0 votes
Article Rating
Subscribe
Notify of
guest
3 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
JohnD
John
10 years ago

Justin:
Great analysis; and it’s conservative. A more in depth analysis will show you that most teachers have served as substitutes for many years before being hired by a district or come from another. As a result, they are not being hired at step 1. So the savings is really far less than even your calculation shows.

Patrick
Patrick
10 years ago

Interesting. So Larry Purtill is saying that it will be more expensive to the towns and to the whole system for teachers to work more. At the same time, they’re telling us that it is more expensive to cities and towns after Carcieri “forced” many employees into early retirement, taking their pension earlier than they might have previously.
So first they tell us it’s more expensive to have them retire now they’re telling us it’s more expensive to keep working?

Tommy Cranston
Tommy Cranston
10 years ago

You cab sure of 1 thing in life:
If the NEA says something it is a lie.

Show your support for Anchor Rising with a 25-cent-per-day subscription.