The 403b faculty retirement plan was a focus of discussion at the monthly board meeting of the Friends of King School, Sept. 11.
Under the plan approved by the board, the administration will contribute a sum equal to 4 percent of a teacher’s annual salary and will match 50 percent of teacher contributions up to an additional 2 percent of the salary.
The new private retirement plan will be in effect this year for the staff at Joseph A. Craig Elementary. The state Board of Elementary and Secondary Education has not yet approved the Martin Luther King Jr. School of Science and Technology’s transition away from the public Teacher’s Retirement System of Louisiana plan. Tracie Washington, board attorney, said the measure was being presented to BESE for signatures.
Member Kenya Rounds abstained from the vote, saying he had not been present for previous discussion or meetings with the representative from Morgan Stanley who spoke with the board earlier this year about the 403b option.
In leaving the state plan for a private 403b plan, “I would say that we need to be very, very mindful of the pitfalls,” Rounds said. He then asked the board what the advantages of the private plan were to employees.
“Flexibility,” replied Shawne Favre, the director of finance. A private plan gives staff more control over their investments, she said.
Several members commented that the plans have a varying effect on older and younger staff. Many older staff members have worked for their entire careers under the public system in which the state invests retirement funds, and benefits are guaranteed. Younger employees may be more inclined to manage their own investments, they said.
“It allows us to give raises where we could not have given them before. That is what we have to say to our staff,” said board attorney Tracie Washington, noting the high cost of the state system. Several members said that the school could not balance its budget paying the 24.5 percent contribution now required by the state plan.
“We haven’t given a raise at King schools in… what, three years?” asked board president Hilda Young.
Board treasurer George Rabb said, “We’ll never be able to satisfy everyone. We’re just trying to do the best we can.”
Rabb also provided a brief update on school finances. He referred the board to a pie chart showing the percentages of the budget spent in different areas. Seventy-six percent of the general fund was spent on instruction, he said, noting that the law requires that a minimum of 70 percent go to instruction. Young congratulated Favre and Judy Collins, the school’s business manager, and other staff members for handling the school’s money skillfully.
“When you compare this school with many of the districts in the state, and many charters, it’s significant that a school which still has so many difficulties with facilities can still spend over 70% of its resources in educating its students,” Washington said.
The board also discussed an enrollment shortfall that will reduce state funding. “We have to do a better job of keeping of keeping our kids at King,” principal Doris Hicks said.
“The high school is 25 [students] short. That’s alarming. There are high school students roaming the streets. Let’s go find them,” Washington said. The Joseph Craig school currently has 78 vacancies. Young said that the board may have to consider staff cuts at Craig if enrollment does not improve.
Directors present in addition to Young and Rabb were board secretary Cora Charles and members Thelma Ruth, Eartha Johnson, Sandra Monroe and Gail Armant.