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Caution Urged For LEAs Hiring Retired Teachers Due To New Limitations Under S399 Law

Katherine Joyce | NCASA Executive Director

Senate Bill 399, signed into law 7/11 by the Govenor, is intended to help districts recruit retired teachers to work in struggling schools that often are hard to staff. The law provides a new option for certain retired teachers to be employed on one-year renewable contracts to work full-time (or part-time) in schools defined as “high-need,” receive a state-prescribed salary not subject to an earnings cap, and still receive their full pension benefit.

Teachers who are eligible for this special perk must be employed to teach at a “high-need” school and must have retired on or before Feb. 1, 2019 under one of the following full retirement provisions:

  • Age 65 with 5 years of creditable service,
  • Age 60 with 25 years of creditable service, or
  • Any age with 30 years of creditable service.

A “high-need school” is any school that, at any point on or after July 1, 2017, regardless of whether it maintains one or both of these classifications, is or was: Title I, or  receives an overall school performance grade of D or F.

Qualifying retirees employed to teach at a high-need school must be paid as follows:

  • Paid on 1st step (Step 0 = $35,000) of salary schedule, except those teaching STEM or special education, who are to be paid on 6th step (Step 5 = $40,000);
  • Cannot receive any State salary supplements or bonuses or move to higher salary steps;
  • Must receive local salary supplements given to other teachers.
  • Cannot accrue additional retirement benefits from this or any future position; and
  • Employee and employer contributions for retirement are not required for the Teachers and State Employees’ Retirement System (TSERS), but the teacher is to be enrolled as an active employee in the State Health Plan, with LEAs paying the premium.

While these salary provisions may help entice qualifying retirees to return to work in high-need schools, the new law also holds limitations that require caution by LEAs in recruiting and placing retirees at schools across their districts.

The North Carolina Association of School Administrators (NCASA) and the North Carolina School Boards Association (NCSBA) have identified some limits within the law that are causing multiple implementation questions, and we have been seeking feedback from attorneys, TSERS staff, and the Department of Public Instruction (DPI). The two organizations have sent a list of questions from LEAs to DPI and urged the Department to issue answers and guidance as quickly as possible to help LEAs effectively navigate the constraints of S399, as well as avoid potential financial penalties.

In advance of that guidance from DPI, NCSBA obtained answers from TSERS staff on several initial questions. NCASA also is sharing S399 information that includes a summary of the law’s requirements, potential LEA financial risks for missteps, and “tentative answers” to the growing list of questions received from LEAs.

Superintendents are urged to ensure that finance and human resource directors, as well as principals, are aware of this law’s provisions and constraints and that caution is taken in the placement of all retirees as teachers for the 2019-20 school year. School board attorneys should be consulted to help ensure correct placement of retirees occurs in light of S399.

In addition, NCASA encourages LEAs, if feasible for the district’s staffing needs, to only place individuals who retired on or before Feb. 1, 2019, as teachers at schools not classified as “high-need” schools to avoid any potential missteps and financial penalties that could arise from the pending Internal Revenue Service review of this new law. That review could take six months or a year to complete.

NCASA will provide additional information on this issue as developments occur.

 

Katherine Joyce
kjoyce@ncasa.net
919-828-1426