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Board approves early severance plan offering $85,000 403(b) buyout to eligible staff
Summary
The Birmingham Board of Education unanimously approved an early severance plan that offers eligible employees an $85,000 payment placed into a 403(b) over five years; the district says the measure is intended to reduce payroll costs and allow staffing adjustments through attrition.
The Birmingham Board of Education on March 17 approved an early severance plan that would offer eligible employees $85,000 placed into a 403(b) over five years, a measure Superintendent Dr. Roberson said is intended to reduce payroll expenditures and allow restructuring through attrition.
Dr. Roberson told the board the plan targets employees who have worked in the district at least 12 years or who are already eligible for retirement. "The proposal that we're looking at, would look at, teachers who have worked in Birmingham for at least 12 years, or who are eligible for retirement, for them to take an early severance plan," she said during her report.
The superintendent said the district contracted Educators Preferred Corporation (EPC) of Southfield to administer the program. Under the terms described at the meeting, participating employees would receive $85,000 in a 403(b) paid out monthly over five years; the district will pay EPC over three years. Dr. Roberson said about 291 employees are currently eligible under the tenure threshold but that the district does not expect the majority to accept the offer.
Board members discussed expected benefits and risks. Dr. Roberson noted the plan would reduce expenditures and allow the district to restructure staffing through attrition, but warned the district could lose experienced staff and that a large take-up could strain hiring capacity. She also said the offer could create expectations that would be difficult to meet if the program were not carried out.
Trustees voiced support for moving forward, citing the work to balance the district budget and concerns about state and federal funding pressures. The board approved the resolution, recorded as Resolution 65 on the meeting agenda, by a 7-0 vote.
Implementation details and limits presented at the meeting: employees with at least 12 years of service (or who are otherwise retirement-eligible) may apply; the $85,000 payment is structured as a 403(b) annuity paid to the participant over five years while the district pays the vendor over three years; the district reserves the ability to retain an employee for an additional year in specific staffing circumstances. The superintendent said the district expects most participants will be those planning to retire in the near term rather than younger employees who remain in the profession.
The board recorded the motion and vote without amendment. The motion passed unanimously, 7-0. The board did not specify a deadline for applications or the maximum number of participants in the text of the motion presented at the meeting; those operational details were not specified during the discussion.
