The Hopewell Valley Regional School Board passed a resolution on Monday in opposition to Governor Chris Christie’s February 24, 2015 pension system “Roadmap to Reform“. The that plan contained among other things the recommendation that local school districts absorb the pension burden from the State. According to the HVRSD resolution, this would represent a monumental change in how public employee benefits, particularly the Teachers’ Pension and Annuity Fund and the School Employees’ Health Benefits Program, are financed and administered.
Teacher’s Pension and Annuity Fund (TPAF) benefits are established by the State, and are not controlled through local school board action. Similarly, post-retirement medical benefits are provided to TPAF retirees through State legislation, not local school board action. Medical benefits for retired school employees total over $1 billion in 2015- 2016.
The Hopewell Valley Regional Board of Education has publicly affirmed through Monday’s resolution that the TPAF and any new retirement program for certificated school district staff must be funded by the state government and that any reform must balance the health of the State’s retiree benefits programs with local school boards’ responsibility to provide sound educational programming.
“Our Board is emphatically opposed to managing pensions locally, said Hopewell Valley Regional Board of Education President Lisa Wolff.
“It is just such a bad idea on so many levels. First, if we are forced to make pension payments locally, the resulting budget deficit would most definitely hurt education quality.
Further, if we assume the state can find a way to make this revenue neutral, which considering its history of unfunded mandates is a major stretch, local districts simply don’t have the expertise necessary to administer pensions.
Finally, consider a teacher that moves from one district to another. Right now, it’s straightforward that they simply continue paying into the state system and draw on it upon retirement. The complexity would be overwhelming if they decentralize. Would each district pay a pro rata share?
I can’t state strongly enough what a terrible idea that is.”
What the school board did agree on was the need to reduce the overall costs of public employee health and retirement benefits. To that end, the school board urged the State Legislature and Governor to take a studied and comprehensive approach that will ensure the long-term solvency of the state’s public employee retirement programs without unduly burdening local school district budgets and endangering educational programming.
By resolution passed unanimously on Monday, the Hopewell Valley Regional Board of Education urged the State Legislature and Governor to ensure that the employers’ cost for teacher pensions and post-retirement medical benefits (financial obligations created by the state) not be transferred to local school districts. The district also requested further control over the cost of health benefits by the Legislature giving local boards of education unilateral authority to enroll in the School Employee Health Benefits Program, if the board determines that such action would generate financial savings.