Finance committee reviews supplemental retirement proposal for classified employees

A staff presenter gave the Finance Committee of the Savannah-Chatham County Board of Education a briefing March 12 on supplemental retirement options for classified (hourly and non‑TRS) employees and a district proposal to offer an employer match to voluntary 403(b)/457 accounts.

The presenter told the committee that the district’s classified employees are overwhelmingly covered by a supplemental plan administered at the state level (referred to in the briefing as PSCRS) and contrasted that plan with the Teacher Retirement System (TRS). The presenter said PSCRS was established in 1970 as a supplemental retirement benefit for employees who are not covered by TRS and noted that members receiving the PSCRS benefit typically include bus drivers, school service workers, maintenance and custodial staff and some managers. The presenter said members contribute either $4 or $10 per pay period, that employees must earn 10 years of service to vest, and that retirement eligibility was described in the briefing as involving both age and years-of-service thresholds discussed during the meeting.

Why it matters: classified staff make up a substantial share of district employees who do not participate in TRS. The committee discussion framed the proposal as a tool for recruitment and retention and asked for cost details and plan design options.

Key details from the presentation

- Scope: The presenter said 785 positions are in the supplemental plan population discussed and showed total salaries for those positions at about $26,800,000. - Cost scenarios: Using those salary figures, the presenter provided employer-match examples: a 3% employer match (paired with a 3% employee contribution) was shown at about $805,000 annually; a 4% match was shown near $1,100,000. The presenter said many districts that offer a match commonly use a 3% match and noted one district reported a 4.5% match. - Enrollment design: The presenter said the district’s preference would be automatic enrollment with an opt‑out option ("have employees opt out, not opt in"), and that vendors estimate roughly 85% participation when automatic enrollment is used. - Vendor management: Staff recommended using a single recordkeeper for the district plan going forward to reduce administrative and management costs; current arrangements include multiple vendors for 403(b) plans. - Vesting and distribution limits: The presenter said the district would apply IRS rules to design vesting for the employer portion, and recommended a vesting schedule that would require an employee to remain for about five years to receive the district’s full match — a limit the presenter said is driven by IRS rules.

Committee reaction and clarifying questions

Board members welcomed the proposal as a recruitment and retention tool. One board member asked for a district-wide figure on the local employer cost of paying into Social Security; staff said they would provide that number. Another board member recommended adopting design choices that do not cost the district but are beneficial to employees (for example, allowing age-50 catch-up contributions and maximizing lawful withdrawal flexibility). A board member noted earlier conflicts with TRS and pay practices in prior years but expressed support for improving classified-staff pay and benefits.

What was not decided

There was no formal vote on a plan design or to authorize implementation. Staff presented multiple design choices (3%, 4%, 4.5%, vendor consolidation, auto‑enroll with opt‑out, and a five‑year vesting expectation tied to IRS rules) for later board consideration and requested direction on preferred match levels and program details.

Ending

Staff said they would return with additional data requested by committee members, including the total district cost of participating in Social Security and any further cost estimates or vendor information needed to finalize a recommended plan design.