Educators, legislators clash over deferred retirement repealPublished 2:34pm Monday, March 28, 2011
By NEAL WAGNER / City Editor
A pair of Shelby County legislators said they supported a recently passed bill repealing the state’s deferred retirement option plan, but a local school administrator said he believes the sudden cut is “unfair.”
Through the plan, state employees, such as teachers, were allowed to continue working after they were eligible for retirement and place their retirement savings into a high-interest account.
“After you worked for 25 years and became eligible for the state’s retirement plan, you could work five years beyond that and take your retirement savings and put them into a special account with a high interest rate,” said state Sen. Cam Ward, R-Alabaster.
“It generated a lot of revenue for a lot of people,” Ward added, referencing those who took part in the program in the past.
The bill repealing the DROP program was signed into law March 24, and will allow only those who have already filed their application for the program and met its eligibility requirements to enroll.
Ward and state Rep. Mary Sue McClurkin, R-Indian Springs, said the program was a good idea, but it was negatively impacting the state’s education budget.
“It will bring us a savings of several million per year,” McClurkin said. “I approve of the repeal whole-heartedly.”
McClurkin said the program originally was intended to reward teachers who wanted to continue teaching beyond their retirement date.
“But now, it’s gotten way out of hand,” she said, noting the program cost the state more than $30 million per year. “The money we were spending on that program will now go straight to the classrooms. It will be placed into the state education trust fund.”
Ward said the plan would have been “worth saving” if it did not come at a cost to the state. However, he said he did not agree with the sudden nature of the repeal.
“I actually delayed repealing it in the Senate. I think the repeal date should have been later,” Ward said. “I think people who are already eligible for the program could have taken advantage of it.”
Riverchase Middle School Principal Charles Smith said the immediate repeal will have negative effects on teachers who have been planning for years to enter the program.
“(The repeal is) a burden to those who have been planning for this for years,” Smith said. “I knew people personally who were planning to get into the program, and all of a sudden it’s gone overnight. That’s unfair.
“How would (legislators) have felt if we were to say ‘We are taking this away from you tomorrow?’” Smith added. “Do I think the state should have limited the amount you could get from that program? Sure. But to suddenly cut someone’s retirement, it’s wrong.”