Recent Raises Make School Board Members Eligible for Pensions

As we reported earlier this month, . The response we heard from readers was mixed, but largely negative.

It was the first raise for councilors since 2001 and the first for school board members since 1998. The raises for the mayor and School Committee take effect in March, while city councilors won't see theirs until 2014.

A seemingly unanticipated benefit of the $1,100 raise for school board members was that they are now eligible to receive public pensions for their service, reports the Salem News.

That issue didn't come up at the City Council meeting on Feb. 14 when a majority of councilors agreed to dole out the raises -- Ward 5 Councilor Dave Gamache didn't even include the School Committee initially in his yearly proposal to increase the mayor's pay.

Council President Tom Gould told the Salem News he wasn't aware of the added benefit, but said it likely wouldn't have changed his vote of support. For the record, Anne Manning-Martin, Rico Mello and Dave Gravel all opposed giving raises to the council and committee.

The Salem News reports that pension reform laws passed in 2009 prevented School Committee members from being eligible for a pension unless they earned more than $5,000 for their service.

Here's a chart of the compensation changes:

* Councilors receive another $1,800 as an expense count.

In addition to pension eligibility, elected officials also have the option of taking the city's health insurance plan. On the council that's Gould, Mello, Barry Sinewitz and Michael Garabedian, while School Committee members Beverley Griffin Dunne, Jarrod Hochman, Dave McGeney and Brandi Carpenter also enjoy the benefit.

McGeney said no one on the board asked for the raises, but he sees it as the "City Council recognizing the hard work by the School Committee." At the same time, he acknowledges taxpayers may view it entirely differently.

McGeney said the money involved (approximately $28,500) is essentially "symbolic" for the many hours elected officials spend serving their constituents, whether that's in official meetings, fielding phone calls at all hours of the day or community or school events.

"In a $65 million budget, I don't think it's a dealbreaker one way or the other," he said.

As for a School Committee expense account, "We don't have one, we're not asking for one and don't need one," he said.

But back to pensions. According to information published by state retirement officials (PERAC), here is how the system generally works:

Members need 10 years of service and to be age 60 by the time they retire in order for their pension to be vested, meaning they are eligible for an annual retirement allowance. That person would otherwise only receive what he or she paid into the system plus interest.

Elected officials have the option of entering the system and are classified with general government employees.

The basic formula used to calculate pensions now is a benefit rate based on age at retirement multiplied by an average of the five highest salary years again multiplied by years of creditable service. Retirees' annual pension allowance also cannot be more than 80 percent of that average salary.

In practical terms, if for instance the most senior member of the School Committee, McGeney, were able to retroactively count his 17 years on the board toward a pension and retire tomorrow, his annual allowance would be approximately $1,150.

And that’s only if retirement officials allowed him to count his service previous to becoming a member of the system. PERAC gives no indication such exceptions are allowed.

As another example, if Gamache were to collect a pension for his 24 years of service on the City Council when he steps down at the end of the year, he would receive about $2,300 annually.

When asked how the pension eligibility might affect him in the future, McGeney was at a loss for specific figures. He said that was probably indicative of how small a sum of money was ultimately involved.

And for those still wondering why light commissioners were left out of the recent round of pay raises, that's because the City Council has no control over their pay nor operation and management of the light plant.

Light commissioners would have to vote on their own raises just as the council did.