Teachers are offered early retirement

January 24, 1993|By Sherrie Ruhl | Sherrie Ruhl,Staff Writer

Teachers and other school employees who meet certain conditions are being offered up to one year's salary to retire early.

About 38 of the school system's 3,600 employees are eligible, said spokesman Albert F. Seymour. Based on school system estimates, about 25 percent, or 10 employees, are expected to take the offer, he said. Employees have from Feb. 1 to May 7 to accept the offer, he said.

He said the school system does not have an estimate of how much money it could save with its Voluntary Early Retirement Incentive Program.

"This is not a moneymaker in the first year but in subsequent years it will reduce our payroll so we can hire additional staff and perhaps other things which we could not otherwise afford," said Ray R. Keech, school superintendent, speaking to the school board at its Tuesday night meeting.

Employees who take early retirement will continue to get retirement benefits paid by the state, Mr. Seymour said. The school system saves money because it can hire new employees who make less money than more experienced workers.

For example, a teacher with 15 years of service and a master's degree could be making about $39,396. Replace that teacher with a new hire making about $24,583 and the school system saves $14,813.

Participating employees who retire one to five years early get a one-time payment, ranging from 20 percent to 100 percent of their annual salary. For example, employees five years from retirement would get 100 percent. Employees one year from retirement would get 20 percent.

Employees who take the early retirement are penalized by the Maryland State Retirement Agency, losing 6 percent annually, up to 30 percent, of their retirement benefits for each year they retire early.

Eligibility requirements depend on which of two pension plans the employee uses. Under the old pension plan, teachers with at least 25 years of service are eligible. Under the new pension plan, teachers over 55 with more than 15 years of service are eligible.

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