Lease-back concept viewed for teachers
One more potential revenue-generator for the Kyrene School District is under study, focusing on a phased retirement plan that would lease retired employees back to the district through an outside company at 78 to 80 percent of the employee’s salary.
Employees would collect a portion of their retirement pension at the same time.
During a Kyrene Governing Board study session held in early March, Jeremy Calles, Kyrene’s director of business services, said a task force is developing ways the plan could be beneficial for both the employee and the district. That group has said it will present a recommendation to the board in April.
“In lieu of keeping their contract, (Kyrene employees) would retire and then be leased back,” Calles said. “We would have the same quality, experienced Kyrene teachers; we’re not leasing back teachers from another district; we’re not leasing back any employees who weren’t already our employees.”
Calles said employees who opt for this program would have increased income but decreased job security, as the contract with smartschoolsplus is good for only one year.
Calles presented an example of how the process would work for employees wanting to take advantage of it.
“So, (when) we’ve already finished the RIF (reduction in force) process, we’ve given you a contract saying that we have a position for you next year. You turn your contract back in, and say, ‘I don’t want the contract, I would rather retire and be leased back,’” Calles said.
“You get one year, but you have no guarantee after that one year that you’re going to come back again.”
Employees would then have to reapply for their position each following year, he said, and would earn the same amount of pay (78 to 80 percent of their previous salary) in following years.
The district would gain savings from retired employees coming back to work at a reduced rate, Calles said.
Although the phased retirement would be an opt-in program, board member Ellen Shamah said she was does not support it, as leased-back employees would eventually see decreased pay after their first year back.
“I think it’s a fancy way of decreasing teachers’ salaries,” Shamah said.
Sandee McClelland, president of smartschoolsplus, a company specializing in phased retirement programs already being used by neighboring school districts, said without an incentive provided by a program like this, many teachers will not retire right now, due to the economy.
“If this wasn’t made available to them, they wouldn’t be retiring and there would be no vacancy for a young teacher to slide into.”
Board member Ross Robb said the concept poses large-scale questions, including why the district would rehire employees back in the first place.
“There are really just too many variables to figure it all out,” he said. “To me, the advantage of it seems to be it’s a choice.”
The question of how many will opt for the program, which would determine the district’s predicted savings, remains unanswered, Calles said.
The board is expected to study the recommendation further and possibly act on the recommendation during April 10 meeting.