Pen­sion costs rise higher than teacher salaries in MUSD

Ripon Bulletin - - Local / State - By DEN­NIS WY­ATT

Re­tire­ment costs, led by pen­sions, are ex­pected to go up by 70 per­cent over the next three years in the Man­teca Uni­fied School Dis­trict.

A dis­trict fore­cast in Fe­bru­ary project teacher pen­sion costs will rise at least $13.9 mil­lion by 2019-20 while salaries will in­crease $8.1 mil­lion

Sched­uled hikes in con­tri­bu­tions to the Cal­i­for­nia State Teach­ers Re­tire­ment Sys­tem (STRS) and the Cal­i­for­nia Public Em­ploy­ees Re­tire­ment Sys­tem (CalPERS) threaten to sink gen­eral funds as school dis­tricts through­out Cal­i­for­nia scram­bled to deal with ris­ing costs as­so­ciated with un­funded pen­sion li­a­bil­ity.

The only way the pen­sion fund­ing gap can be made up is in­creas­ing as­sess­ments on school dis­tricts as well as what the cov­ered work­ers con­trib­ute.

Ev­ery time the per­cent­age of a teacher’s salary that the dis­trict has to pay into re­tire­ment funds it sets up a dicey rip­ple ef­fect. That’s be­cause roughly 90 per­cent of ev­ery dol­lar Man­teca Uni­fied spends from its gen­eral fund goes to cover em­ployee salaries, ben­e­fits, and re­tire­ment.

Many ed­u­ca­tors have been warn­ing that the sit­u­a­tion is likely to get to the point where it will im­pact the abil­ity of schools to main­tain staffing lev­els. The most likely sce­nario in such cases is not re­plac­ing 100 per­cent of staff lost to re­tire­ment for other rea­sons should re­tire­ment fund­ing bumps start­ing cut­ting into the fi­nan­cial bones of gen­eral funds.

Man­teca Uni­fied last school year con­tributed 12.58 cents on ev­ery dol­lar of salary for a teacher en­rolled in STRS. The cost for those cov­ered by CalPERS in the fis­cal year end­ing June 30 was 13.88 cents for ev­ery dol­lar it pays a teacher who elected to be cov­ered by CalPERS.

In real num­bers the dis­trict last fis­cal year paid $39.4 mil­lion to staff cov­ered by CalPERS with an ad­di­tional $5.4 mil­lion go­ing into the re­tire­ment fund. For STRS the salaries came to $167.8 mil­lion with the dis­trict’s share of the re­tire­ment con­tri­bu­tions cost­ing $21.1 mil­lion.

Man­teca Uni­fied in Fe­bru­ary pro­jected the t 12.58 per­cent STRS con­tri­bu­tion would ratchet up to 14.43 per­cent for the 2017-2018 school year, 16.28 per­cent for the 2018-2019 school year, and 18.13 per­cent by the 2019-2020 school year.

As for CalPERS it is pro­jected to go from 13.88 per­cent last fis­cal year to 15.8 per­cent in 2017-2018, 18.7 per­cent in 2018-2019, and 21.6 per­cent in 2019-2020.

By 2019-2020 Man­teca Uni­fied will be pay­ing $40.4 mil­lion to­ward re­tire­ment costs as op­posed to the $26.5 mil­lion they are pay­ing this year. That rep­re­sents a jump of $13.9 mil­lion.

Mean­while, over­all salaries are pro­jected to go from $207.2 mil­lion this year to $215.3 mil­lion by 20192020. That rep­re­sents a jump of $8.1 mil­lion.

The dol­lar cost of the dis­trict fund­ing re­tire­ment costs will in­crease al­most 70 per­cent more than what teach­ers will be paid.

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