Editor's note: both Delegates Cox and Hamilton are employees of public school systems in Virginia - Cox in Chesterfield, and Hamilton in Newport News.
Appropriations Committee
Virginia House of Delegates
January 29, 2009
Contact: Robert P. Vaughn (804) 698-1590
House Budget Conferee Kirk Cox
Outlines Early Out Retirement Program
for Local School Division Employees
-- House Budget will include Enhanced Retirement Incentive Plan --
-- Proposal Seeks to Help with Pending Layoffs of Teachers & Support Staff --
RICHMOND, VA – Signaling anew their direction in what has become a major area of contention in Governor Timothy M. Kaine’s proposed budget cuts, House Majority Whip M. Kirkland “Kirk” Cox (R-Colonial Heights) – who also will be a member of the conference committee that will hammer out a final agreement on HB 1600, amendments to the 2008-2010 Biennial State Budget – today announced a House budget proposal to help local schools with possible layoffs of any eligible school division employees. By enacting this Session the House’s Teacher and Support Staff Enhanced Retirement Incentive Plan, it will lessen the possibility of having to layoff younger teachers and other school division employees as well as help Virginia’s schools better manage their budget in these extraordinarily difficult economic times.
The complete text of Delegate Cox’s statement on the floor of the Virginia House of Delegates follows:
“Mr. Speaker, earlier this week, my colleagues Delegates Bob Tata (R-Virginia Beach) and Phil Hamilton (R-Newport News) detailed the intent of the House Appropriations Committee on having the General Assembly’s Joint Education Funding Task Force take an expanded look at all funding issues and proposed funding reductions involving public education now and into the future.
“While that effort is prospective, I am reminded of the adage, if you can’t help, then get out of the way.
“Well, Mr. Speaker, I believe we can and must help. In fact, it is incumbent on us all to help our local school divisions by giving them as many tools in their tool box as we possibly can.
“Clearly, school divisions – like state government – are facing some tough financial challenges that may result in a reduction in staff positions in the next academic year. The House Appropriations Committee wants to help. And, by taking the initiative, I believe we’ve come up with a good idea.
“Over the last several weeks, the Appropriations Committee members and staff have been discussing with the Virginia Association of School Superintendents (VASS) a proposal that will give our school boards the ability to offer an Enhanced Retirement Incentive Plan. This option would provide those school divisions, which voluntarily elect to participate, the ability to better manage their personnel needs and staffing requirements while they balance their budgets.
“The key concept at the heart of this innovative proposal is modeled after a provision in the state’s Workforce Transition Act (WTA), whereby the Commonwealth, on behalf of eligible state employees, can purchase additional retirement service credit, thus allowing them to retire with additional years of service and without penalty.
“Over the last several weeks, Chairman Putney and I have had the Appropriations Committee staff reach out to and work with the Virginia Retirement System (VRS) and a group of Superintendents on developing a practical proposal that will work. We have provided the superintendents with data on the number of eligible school employees, along with some cost estimates. All in all, we have been very pleased that this House proposal has been warmly greeted by VASS.
“As a result of this positive reception, and, after reading recent newspaper articles about how Chesterfield County – and many other school divisions throughout the Virginia – are beginning the process of notifying school employees that their positions may be eliminated, I suggested to Chairman Putney that we needed to formally introduce and begin advancing immediately this much-needed proposal.
“So, Mr. Speaker, with Chairman Putney’s concurrence, I will now outline the House’s Teacher and Support Staff Enhanced Retirement Incentive Plan. Here are the key components –
1) Any School Board may voluntarily elect to participate in this enhanced or early retirement incentive plan (ERIP);
2) Participating School Boards may elect to purchase between 1 and 5 years of retirement service credit for eligible employees, although the number of years they elect to purchase would apply to all eligible employees;
3) Any employee age 50 years old with at least 25 years of creditable service, as of June 30, 2009 is eligible;
4) Participation by each employee who meets the age/service eligibility criteria is completely voluntary and will be subject to approval by their school division;
5) Eligible employees must elect a retirement date between July 1, 2009 and June 30, 2010, or as mutually agreed upon by the school division;
6) Approved participants will not be subject to early retirement penalties;
7) Approved participants also may elect to participate in a school division's official early retirement incentive program;
8) Participating school divisions will be obligated to pay VRS for the cost of its participation at the rate of 20% of the eligible employee’s current salary, for each year of service purchased; and
9) Payment to VRS may be made in either one lump sum or 12 equal monthly payments over a period of five years.
“Mr. Speaker, I truly believe that it is incumbent upon all of us, as leaders, to help solve the real problems that many of our educators, businesses, families and taxpayers are confronting in this time of economic recession and budget shortfalls. This education proposal that will be part of the House budget that will be released in its entirety on February 8, is a constructive one to help meet this vital goal.
“I thank the Virginia Association of School Superintendents and the Virginia Retirement System for their helpful assistance and valuable input in developing this education proposal. I also would like to publicly acknowledge the leadership of Chairman Putney and the creativity of our Appropriations staff in helping to craft this sound and sensible proposal.
“By enacting the House’s Teacher and Support Staff Enhanced Retirement Incentive Plan this year, it will lessen the possibility of having to layoff younger teachers and other school division employees, as well as help our schools be able to better manage their budget in these extraordinarily economic times.
