Ex-teachers sue over health plan - District 87 accused of reneging on deal

"Ninety-one retired teachers are suing Glenbard Township High School District 87, claiming the district is reneging on an agreement to pay their full insurance premiums -- a promise they said partly induced them to take an early retirement deal.

In a suit filed in DuPage County Circuit Court, the teachers allege the district breached the employment contract that agreed to pay teachers who took early retirement 100 percent of their individual health insurance premium.

Both the 1998 and 2001 contracts included language that any teachers taking early retirement would be entitled to those health insurance benefits until age 65, said Jeffrey Kehl, a Chicago attorney representing the teachers.

All 91 teachers submitted their formal "intent to retire" notices on dates that fell under the 1998 and 2001 contracts, Kehl said.

The district's most recent contract, which takes effect Thursday, requires that retirees contribute the same amount toward premiums as active employees, said Rod Molek, assistant superintendent for human resources. Since 2005, active Glenbard district employees have paid part of their individual premiums, he said.

Molek said he could not discuss pending legislation.

On April 30, 2007, Molek wrote a letter to retired teachers informing them that beginning in July, retired teachers must kick in 11 percent toward their premium for single coverage -- the same level of contribution as current employees.

Noting that the district spent $2 million in 2006 on health-care benefits for retirees, "the board cannot continue to provide benefits to retirees without assistance," read Molek's letter.

"According to past practice and an agreement with the Glenbard Education Association, the board has subsidized retiree insurance, even though they are not required to do so," the letter read. "Rising health-care costs, however, regularly add to budget constraints and fiscal pressure."

The letter also reminded retirees that they can enroll in the state's Teachers Retirement Insurance Program, and that the district would pay 100 percent of the employee's premium for that program.

Kehl said the statewide insurance program doesn't offer the same level of coverage as the school district's."

This message has been edited. Last edited by: KOAM,

Just shows how greedy these folks are. What are they going to do when the state fails on their pension guarantees? Sue the state of Illinois?

Gus,

"It's for the kids."

quote:

Originally posted by Gus:
Just shows how greedy these folks are. What are they going to do when the state fails on their pension guarantees? Sue the state of Illinois?

Gus: Just a thought. When does a deal stop being a deal? If you negotiate a price, and you put your signature on the line, you pay it. In the end, although it may be a lousy deal for some, the insurance deal was negotiated to remove some of those 100K+ teachers we all complain about.

You are correct Ron: I already thought of that believe it or not. The blame squarely falls on the previous boards allowing such golden parachute packages to be offered. I'm only wondering what will happen if the state has/will have issues with it's pension plans. Hell, they can't even pass a state budget due to the mess these idiots in Springfield have created.

The contract allowed retirees to have the same health insurance as current teachers, as an extra benefit, instead of the Illinois Teachers Retirement System health insurance.

They are still allowed to opt in and have the same insurance as current employees, nothing has changed.

I would think this lawsuit is about a disagreement in interpreting the 1998 and 2001 contracts. Did the old contracts indicate that retirees will receive 100% health care coverage forever or only that retirees would receive the same health benefits as currently employed teachers (which was probably 100% under those contracts)?

Apparently, the just negotiated contract says currently employed teachers pay 11% of health benefits. I guess that District 87 is just telling the retirees that they can continue getting the same coverage as currently employed teachers.

Any lawyers out there have an opinion on how the old contracts should be interpreted? Do the retirees have a valid beef?

Also, how much money are we talking about here?

If ninety-one retirees cost the district $2 million, then that is $21,978 per year for each retiree. If the district now wants 11% of the premium, that is about $2,417 per teacher (or $201 per month).

What is the cost of the state’s Teacher Retirement Insurance Program and the difference in coverage from the current Glenbard health plan?

I am just guessing about this. Does any know the specifics? Can the details of the lawsuit be found by any of you lawyers who post on this message board?

Exactly - In the article it was the retired teachers' attorney presenting his interpretation that the coverage was promised to be paid at 100%. That was not the specific language of the contract. Who can find it and post?

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Originally posted by GEmom2:
Exactly - In the article it was the retired teachers' attorney presenting his interpretation that the coverage was promised to be paid at 100%. That was not the specific language of the contract. Who can find it and post?

If you go to 505 County Farm, 1st floor, the Clerk's office will allow you to view any file which is not impounded (e.g. children). It should not be hard to find the file. The only thing in the file will be the Complaint. Get a copy and scan, and everyone can read it. It costs for the copies. $2 first page, 50 cents each page after.

Basically its an interpretation of the contract . What I wonder is why the union isn't suing but these ninety one teachers are doing this outside their union. Does this mean the union is agreeing with the board?. Also just because the expense has gone up is irrelevant to the matter. Just because the board made a stupid deal doesn't mean they can come back and say gee this is costing us to much lets change the rules.

BTW Real Estate taxes are due in three weeks.

quote:

If ninety-one retirees cost the district $2 million, then that is $21,978 per year for each retiree. If the district now wants 11% of the premium, that is about $2,417 per teacher (or $201 per month).

What is the cost of the state’s Teacher Retirement Insurance Program and the difference in coverage from the current Glenbard health plan?

At an average cost of almost $22,000 per year, per early retiree, one would have to surmise that the in-district health insurance is orders of magnitude better than the TRS health insurance.

Lest we forget, millions of Americans can't even GET HEALTH INSURANCE. At any price.

I know this all too well. My wife is one of them. Stage IV breast cancer, you know.

Yet, these early retirees have a CHOICE of a) free or b) nearly-free health insurance and they feel the need to sue over the nearly-free option?

This seems like the very pinnacle of entitlement thinking for public-employee retirees - socialized medicine of the Mercedes-Benz variety.

I don't know the specifics of this but my bet is that this insurance was part of the negotiation for early retirement to get the more experienced and expensive people off the books...if that's true, then the district shouldn't be allowed to go back on their aggreement. If it's costing too much, then the board shouldn't have agreed to it to begin with. If however, it wasn't in the contract and the teachers aren't genuinely owed anything, I'm sure that will come out in the court procedings. The teachers are not necessarily still members of the union after they retire so the union really wouldn't take up the cause....

Retirees are allowed to opt-in and receive insurance coverage from D87 instead of TRS.

This is the same insurance offered to D87 employees. Was D87 supposed to keep the exact same coverage from the same carriers of the past just for retirees?

I don't think it's a matter of carriers but who pays that is important in this.
Obviously there is some disagreement on who is supposed to pay. If I have to make a bet I would guess the District screwed up and is interpreting the contract wrong. Oh well there goes the 7th period.

Aug. 14 (Bloomberg) -- Roll back those pensions! Give back those sweeteners!

This may be the latest new idea in public finance to blow in from the West if Orange County, California, Supervisor John Moorlach has anything to say about it.

Tax-cap fever and the crazy-quilt creation of special tax assessment districts are just two of the modern-day contributions California has made to the world of public finance.

Next up: Nuclear war between those who get public pensions and those who don't.

Those are the words -- ``nuclear war'' -- used by Orange County Sheriff Mike Carona, commenting on a plan by the county's supervisors to challenge a pension increase given to sheriff's deputies in 2001.

The plan to challenge the retroactive increase was approved by county supervisors on July 31. Supervisor Moorlach said the increase was unconstitutional because it created an unfunded liability without voter approval, and might bankrupt the county.

Moorlach knows something about municipal bankruptcy. He was the critic who warned that Orange County's investments in derivative securities were unwise. He ran for the office of treasurer and tax collector in 1994 and lost to popular incumbent Robert Citron. In December of that year, the county became the biggest municipal bankruptcy case ever after its investments tanked. Moorlach was appointed to fill out Citron's term in March 1995, and won re-election twice before being elected a supervisor last year.

Everyone's Watching

Everyone in California is going to be watching the county, and if it prevails in court, because so many state and local agencies did the same thing when it looked like pension funds were awash in cash.

What the county did in 2001 was to approve a plan to allow sheriff's deputies to retire at age 50 with 3 percent of their peak year of pay, multiplied by the number of years they served. This was a 50 percent raise above the previous plan, which allowed them to retire at 50 with 2 percent. The new plan took effect in 2002.

For example, a deputy retiring after 25 years at age 50 with a $143,955 salary would get a pension of $71,978 under the 2 percent plan, and $107,966 under the 3 percent plan, Moorlach pointed out in his presentation.

Moorlach says the increase is unconstitutional, because it created a new liability, one not approved by the voters and one that created an immediate shortfall because no money had been set aside to pay for it. He wants the increase to be rescinded, or for the deputies to chip in and help pay for it.

21st Century Problem

If the county prevails, and that's a big ``if,'' states and localities across the nation will probably start looking at how they, too, might roll back what are now being seen as overly generous pension benefits granted to government workers.

Public pensions are a 21st-century problem. Nobody really gave them much thought before now. Decades ago, few people begrudged police or firefighters, people who put their lives on the line every day, full pensions with benefits.

Even as the size of state and local government grew, few people felt envious of those civil servants who weren't in the line of fire, those with clerical jobs or those in the parks department or the department of sanitation, for example, who received similar retirement packages.

Everyone knew that in exchange for salaries that were somewhat lower than those on offer from private companies, people who worked for government got nice retirement benefits.

Nobody really thought about those benefits until recently, until about the time private companies started doing away with their own pension and benefit plans, replacing them with limited contributions and making most employees responsible for saving for their own retirements.

Union Battle

So now everybody is looking at public employees' pensions, and wondering if we, the taxpayers, can afford them.

We're looking at them because of envy. We're looking at them because our elected representatives seem to have juiced some of those plans up considerably while we weren't looking.

And we're looking at public-employee pensions because it looks like our elected representatives haven't put enough aside to pay for those liabilities, stinting on annual contributions and otherwise not planning ahead. The bill is coming due as surely as all those baby boomers reach retirement age.

And now, thanks to a new rule from the Governmental Accounting Standards Board, we have something else to worry about -- not just pensions, but those so-called other post- employment benefits, chiefly health care, promised to public employees. States and localities are in the process of tallying those, and the final figure just for those benefits might be $1 trillion-plus.

Until now, those costs were usually paid for on a pay-as- you-go basis; GASB wants municipal governments to calculate about how much they promised, and include the figure in their financial statements. Surprise!

Welcome to the next union war.

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Nobody really thought about those benefits until recently, until about the time private companies started doing away with their own pension and benefit plans, replacing them with limited contributions and making most employees responsible for saving for their own retirements.

Correct. And in addition, who could have predicted $143,955 per year sheriff's deputies and $190,000 per year "Finance Managers" at suburban high school districts?

The generous pensions are one thing. Whatever happened to the lower-wages for government workers?

This is the crux of the problem. I'm waiting for the $250,000 per year fireman or the $300,000 per year village tree trimmer. Wages in ALL forms of government-supported entities have taken on a life of their own, totally outside of the realities of the private sector.

The Golden Rule at play: "Them that has the gold, make the rules."

Probably not to far away. Did you ever think you would live to see School supers making more than the Governor or 100K year teachers.

This is a direct result of well intentioned amatuers (school boards) running a multi-million dollar enterprise.