The approval of two teachers for early retirement will save Cary Elementary District 26 tens of thousands of dollars over the next two years, despite the district paying hefty penalties to do so, Superintendent Brian Coleman said.
The school board this week approved Julie Ellison, 55, and April Huffstutler, 59, for the early retirement option. Both teachers, who will now retire effective June 1, 2012, will receive a $20,000 post-retirement lump sum payment.
In addition to the one-time payment, District 26 agreed to pay penalties to the Teacher Retirement System associated with taking the early retirement option. Those penalties are based on a teacher's age and years of service with TRS. Ordinarily, teachers also contribute to the system if they opt to retire early, but as an incentive, District 26 paid all penalties.
Coleman said four teachers applied for the accelerated retirement plan, but the two Briargate Elementary School teachers were selected based on seniority within the district and available funding.
"The board is estimated to pay $180,000 in penalties," Coleman said. "Even with these penalty costs, it is estimated the district will save $70,000 over the next two years."
School board President Christopher Spoerl said savings would result from replacing the retiring teachers with less experienced teachers. The district would also see savings because it would no longer pay 6 percent raises in each of the final three years of a teacher's service. The teachers would also receive their full annuity and the savings also include the lump sum payments, Spoerl said.
"The whole notion here is what's in it for them, why would they do this?" Spoerl said. "Frankly with all of the uncertainty for those who have not yet retired and the real possibility that they could be affected by the legislature, for those who didn't want to wait and see, this was an opportunity to retire early."
Ellison is a third-grade teacher with 25 years of service, while Huffstutler is a fifth-grade teacher who has 21 years of service.
Spoerl said the district would pull teachers from the recall list to replace the two retiring teachers. The district has already recalled five teachers for the next school year.
"We're looking for savings and there's a number of teachers on the recall list that we would be quite happy to have back," Spoerl said.