Stock market may help schools

Published 12:00 am Monday, April 5, 1999

Up to eight Albert Lea teachers could choose early retirement this year because of a healthy stock market and an obscure 1973 law.

Monday, April 5, 1999

Up to eight Albert Lea teachers could choose early retirement this year because of a healthy stock market and an obscure 1973 law.

Email newsletter signup

If they do retire, the district might not need to cut teaching positions, even though the school board recently approved $265,659 in cuts for next school year due to declining enrollment.

Educators usually retire when they reach what’s called &uot;the rule of 90,&uot; experience and age equals 90. While those retiring early are penalized, for some retirement pay could now go up more than $12,000 a year.

&uot;For the few people who qualify, it will more than make up for the penalty,&uot; said Steve Bracker, Albert Lea Education Association spokesman. &uot;To my knowledge, a few have already handed in their retirements. A few more are looking at the option.&uot;

The new retirement boon covers employees who were working in the 1968-69 school year and chose a retirement plan dependent more upon the stock market.

In 1973, the Legislature revamped teacher retirement benefits that based retirement pay on the five years of highest pay for the employee. But the 1973 law also allowed retirees to use the older system they had signed up for, if the benefits would be higher.

For more than two decades, that clause was never used. But today, as the stock market reaches new highs, the old system of calculating benefits is reaping unexpected dividends.

Most retirees affected by this will see their yearly benefits jump between $5,000 and $10,000.

Officials from the Minnesota Teachers Retirement Association say it is too early to know the full impact of the new retirement estimates. The association handles retirement accounts for 68,000 current public school employees and 25,000 retirees.

&uot;We got notified by the state that we have eight teachers who are qualified,&uot; said Superintendent David Prescott. &uot;We know of two or three who are considering the option, There may be more coming forward.

&uot;Those who did enroll in this did very, very well,&uot; Prescott said. &uot;That’s basically all we know about this.&uot;

Bracker said the retirement option benefits both the teachers and the district.

&uot;Hopefully, it’s a win-win situation,&uot; he said. &uot;If the teachers are ready for retirement, it gives them a way. The district can hire back somebody at a lesser pay scale.&uot;

But, across the state, educators are also concerned about an expected teacher shortage, Prescott said.

TRA estimates that about 500 of the 3,400 school employees who received letters will retire this spring, said executive director Gary Austin. If so, the number of retirements would be 25 percent higher than previous projections.

&uot;We’re concerned about finding replacement teachers,&uot; Prescott said. &uot;This is a national concern. The pool of certified teachers is less than a couple of years ago. Teacher retirements don’t make our job easier.&uot;

Qualified teachers have until June to decide if they will retire. While those qualified are close to retirement, this option might be limited to this year, Bracker said.

&uot;They might lose the option,&uot; Bracker said. &uot;We don’t know if will be available next year.&uot;