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Board hears review of retirement "pickup" benefits; staff estimate about $500,000 annual cost
Summary
District staff presented a comparative survey of retirement pickup practices across local districts, described differences between "pickup" and "pickup on the pickup," and recommended the board discuss options; trustees agreed to a follow-up work session to evaluate potential changes.
Mark Souza and district staff briefed the Little Miami Local School District board on June 30 about administrative retirement "pickup" benefits and a recent survey of neighboring districts that examined who receives pickup and whether districts use "pickup on the pickup."
At the meeting, staff explained the technical difference: regular pickup pays the retirement percentage on salary (for example, 10% for some non-teaching plans); pickup on the pickup adds the retirement contribution to salary and calculates the retirement percentage on the higher total, producing a higher effective rate. "So that's pickup on the pickup," a district staff presenter said, explaining how a 10% pickup can effectively become about 11% under that method.
The presenter said Little Miami currently lists roughly 27 positions eligible for pickup and that, based on district payroll estimates, the pickup liability is "a little over half a million dollars" annually. The presentation included a regional survey showing variation: some districts offer pickup to a minority of eligible positions, others to most; a few districts reported pickup-on-pickup for many positions, which increases total cost.
Trustees and staff discussed ways to reduce cost, including reclassifying job codes so some positions are not eligible for pickup, lowering pickup percentages for new hires, and negotiating reductions over time rather than retroactively. Board member Diane Elmer said she supports moving funds into classrooms rather than supplementing administrative retirement pickup and said she would vote against personnel approvals that included pickup for rehires unless the board reexamined the policy.
Treasurer Terry (surname not stated) said the district's pickup line item is roughly $378,000 in a back-of-the-envelope estimate (using a $100k-per-position approximation for 27 positions at 14% STRS rates) and that an overall figure provided in discussion was "a little over half a million" when other pickup types were included. Staff recommended the board review pickup practices during contract renewals and when positions turn over, and to consider whether some jobs should remain coded as administrative for EMIS purposes.
Trustees agreed to schedule a follow-up session. "If we could get something on the schedule, maybe in August or so," one trustee said; the board committed to a deeper review at a forthcoming work session.
No change to the pickup policy was adopted at the June 30 meeting; staff presented the survey and outlined options for the board to consider.
