A vocal McLean citizens group wants to see more changes to the pension system for Fairfax County Public School employees.
The McLean Citizens Association approved a resolution that was critical of the FCPS Educational Employees’ Supplementary Retirement System of Fairfax County (ERFC) pension system during its Board of Director meeting on Tuesday, March 1.
The MCA’s resolution urges the FCPS Board to immediately establish an independent pension task force to make the ERFC “financially sustainable without consuming a greater share of Fairfax County resources.”
“We’re going to try to rescue a pension for the benefit of those who were made promises to receive benefits and for the benefit of citizens who would like the county’s money to be spent on more than just pensions,” said Steve DelBianco, MCA board member, during the meeting.
As of June 30, 2016, the ERFC was underfunded by $830 million, according to the MCA.
“There’s a serious problem for God’s sakes,” said Dale Stein, MCA’s Budget and Taxation Committee chair, during the meeting. “It’s going to crowd out other expenditures.”
This would not be the first time the pension system was reviewed.
In May 2016, the Aon Hewitt consulting firm completed a “Retirement Plans Study” that
assessed the retirement benefits for newly hired FCPS employees.
The study concluded that newly hired FCPS employees are expected to retire with lower retirement benefit values when compared to the county’s other employee pension plans.
But members of the MCA were critical of this study and questioned its objectivity since the FCPS commissioned the study.
“What the Aon Hewitt report did not analyze was—because they weren’t asked to—they didn’t analyze the extent to which the pension plan was underfunded,” Louise Epstein, MCA’s Education and Youth Committee Chair, said during the meeting. “They didn’t analyze the impact on county finances, including the crowding out of other expenses. They didn’t analyze discrepancies between what they call the discount rate and actual returns and the comparative costs of different plans between [the county] and other employers, and they chose assumptions that tended to support the conclusions they reached.”
The FCPS is not oblivious to the need for reform.
The FCPS is currently considering implementing $4.7 million in reductions to its pension system by June in time for the fiscal year 2018 budget.
RECOMMENDATIONS include lowering the interest crediting rate on all ERFC member accounts from 5 percent to 4 percent. The FCPS is considering more changes for new or nonvested ERFC members, including instituting a minimum retirement age of 55; increasing the period for calculating the final average salary from three years to five years; and changing the cost-of-living adjustment to equal 100 percent of the Consumer Price Index with a cap of 4 percent.
While the MCA supports these options, the association only sees them as interim cost-savings measures and wants to see more reductions. In MCA’s resolution, it expects FCPS to implement the proposed task force’s recommendations in time for its fiscal year 2019 budget.
The handful of teachers in the audience were not happy, audibly huffing as board members argued in favor of the resolution and clapping for the two members who stated their reasons for voting against the resolutions. The teachers were not allowed to testify at the meeting.
“They don’t care whether or not we can live in their community,” said Mimi Dash, spokesperson for the Fairfax Employee Pension Coalition. “They care that their taxes are going up.”
She was one of a handful of pension beneficiaries who attended the meeting in opposition to the resolution.
“Why do I continue to put forth my time and effort when the community is saying, ‘Well, you’re not deserving of this,’” said Andre Mayer, an intellectual disabilities teacher at Luther Jackson Middle School in Falls Church.
“They’re destabilizing the teacher force by giving people less reason to come to Fairfax and giving people who have the potential of retiring the impetus to retire quickly so they won’t get screwed in this deal,” said Cheryl Binkley, who recently retired from teaching at George C. Marshall High School in Falls Church. “They are destabilizing the teaching force big time, big time.”
Most of FCPS’s fiscal year 2018 budget, 89 percent, is allocated to employee compensation, and the county is not looking to reduce or hold flat employee salaries.
FCPS started a compensation study last year and found that teacher pay is “significantly below the market average” in the region, according to Kristen Michael, assistant superintendent of financial services for the FCPS.
That’s why the fiscal year 2018 budget includes $33.2 million to increase teacher salaries. It also allocates $44 million for an increase in pay of 2.5 percent for all eligible FCPS employees.
“We started this current school year with approximately 180 vacancies,” Michael said during a town hall gathering about the budget in Great Falls. The event was hosted by the Great Falls Citizens Association, another citizen organization that has been critical of the pension system, on Tuesday, Feb. 21.
THE NUMBER of unfilled teaching positions is unprecedented for the county, according to Michael.
“This is an extremely complex issue which really does require expert input of which no one on our [Education and Youth] committee has,” said Kelly Green Kahn, MCA board member, during the meeting.
She voted against the resolution because the urge for pension reform was not paired with the association’s recommendations to reform teacher salaries.
“We have a concern about bleeding in the pensions, but in fact we are bleeding in our most important capital which is our teachers,” she said.
Tom Brock was the other MCA board member who voted against the resolution. He told the board that teacher salary deficiencies would be only be worsened if the county took their recommendations.
The MCA’s Education and Youth Committee will be hosting a public meeting on Tuesday, March 21, at the McLean Governmental Center to discuss teacher compensation.