City wants 2,000 school employees to start paying into pensions
By By Erica L. Green and The Baltimore Sun
May 19, 2014 | 5:49 PM
The city pension board is requiring about 2,000 school employees to begin contributing to the municipal retirement system, a plan met with resistance by school officials, who say the district won't be able to meet the July 1 deadline.
The school system was informed this year that some of its employees would have to begin contributing to the city's Employees' Retirement System for the first time in decades. The school employees affected include paraprofessionals, school police, cafeteria workers and central office staff.
But the school system, which initially fought the plan, says it has not had enough time to inform its employees. Therefore, school officials plan to pay the initial bill of $14.4 million on the employees' behalf out of the district's budget.
In 2015, the school employees would be treated the same as other municipal employees who had to begin contributing to the city's retirement system under a plan introduced by Mayor Stephanie Rawlings-Blake last year to reform the underfunded pension system. The school employees would have to contribute 3 percent of their salaries beginning July 1, 2015.
School employees were not originally part of the mayor's plan, under which thousands of civilian municipal employees begancontributing 1 percent of their salaries to their pensions in October. The percentage will increase every year until it reaches 5 percent in 2017.
Citing fairness, the Employees Retirement System board voted in November to include school employees in the plan and gave the district until July 1, 2014, to communicate and prepare its workforce for the transition.
"The ERS Board acted because it believes that school system employees should be required to contribute to ERS — just as Baltimore City employees are now required to contribute," Roselyn H. Spencer, executive director of the retirement system, said in an email.
A spokesman for the mayor said that "as long as the [school system] pays its share of the annual required contribution, the source of the funds can be determined by whatever agreement they think is best."
Teachers and principals are not included in the plan because they belong to the state pension system.
Union leaders who represent affected school employees had mixed reactions to the request.
For city school police officers, the contribution request comes amid long-standing talks with the school system to move officers to the state's pension system. The state system covers most other law enforcement agencies, including campus police, and affords better benefits.
One of the biggest challenges that school police officers face in the city pension system is a much higher threshold to receive benefits for being injured in the line of duty. Officers have to lose half a limb or a body function to receive the same benefits afforded to their law enforcement counterparts around the state for lesser injuries.
In a recent letter sent to its membership, the school officers' union leadership said the district had used "stall tactics" in addressing the nearly two-year-old issue, and last week pleaded to the school board to help talks move forward.
"Our officers are not opposed to contributing to a pension system. However, we want to contribute to a system that is conducive to the job that we do, covers our greatest need and eliminates our greatest risk," said Sgt. Clyde Boatwright, president of the Fraternal Order of Police lodge that represents the city school police force.
Glenard S. Middleton, president of Maryland Public Employees Local 44, which represents 1,150 school employees, including food service workers and operations staff, said that he supported employees having to contribute to the retirement system.
He said that when they stopped contributing about 30 years ago, many found they couldn't retire with a livable wage.
"It's long overdue," Middleton said. "Everyone will see a benefit from this."
But he said that the union is concerned about whether the school system will have enough money in its budget to give wage increases to offsetthe contributions.
The new pension requirement for municipal workers was tied to a 2 percent raise, but the retirement board did not apply the same provision to school employees, Spencer said. She said the board did not believe it had authority over raises given by the school system.
"We will have to fight to make sure they get those raises," Middleton said.
School employees covered by the city's plan were due to begin contributing 2 percent of their salary on July 1, the same contribution schedule as city employees.However, school officials acknowledged that they had not communicated to nor prepared its employees for that requirement.
In a letter dated March 6, Spencer asked school officials to indicate whether the district intended to comply with the request.
Spencer said city schools interim CEO Tisha Edwards informed the retirement board last week that the district would not be able to have employees begin contributing on July 1.
She said she urged that the "school system act as quickly as possible to ensure equal treatment between city employees and school system employees. "
Victor De La Paz, chief financial officer of the school system, said it is prepared to pay the $14.4 million bill.
He said there were a number of barriers to implementing the contribution system by the July 1 deadline. The school system initially questioned whether the city's retirement board had the legal authority to require employee contributions.
De La Paz said the district is no longer challenging the plan but still questions the motivation behind the board's decision to have the school system and employees split the cost.
He also said that the school system needed to figure out budgetary issues, including how much in raises must be added.
About 120 employees were given 2 percent raises in September, he said. But those employees weren't given the raises in the context of having to start contributing to the pension system, so it wouldn't have been fair to ask them to do so, he said.
Most importantly, De La Paz said, the school system had not given the proper notice to affected employees.
"We need to make sure that our employees are clear about their new responsibilities," he said. "And we just haven't had time to do that."