My perils with pension portability - Guest column - educators benefits - Brief Article

School Administrator, Dec, 2001 by Laval S. Wilson

I know a great way to reduce the short supply these days of superintendent candidates: Reform pension portability.

This is a critical issue for me, a career superintendent, and for New York state, where I currently live. But it also is a national issue. Enticing qualified candidates to move to my state is problematic because of the non-portability of their pensions.

An educator who remains in the New York system for an entire career and moves upward through the ranks, from teacher to assistant principal to principal to assistant superintendent and eventually to the superintendency, will retire with an adequate pension.

A Divergent Path

But that's not my career path, and I am now paying dearly for the consequences. An educator for more than 40 years, I have come into New York as an administrator on three different occasions. Earlier in my career, I taught for seven years in Chicago and served as an administrator for five years in Evanston, Ill. At that time, Chicago and the rest of Illinois had separate pension systems. I was not vested in either plan.

In 1971, I became an assistant superintendent in Hempstead, N.Y. I served in this position for two years and another year as acting superintendent. I was in Tier 1, the first and most liberal category, of the New York state retirement system. After three years in Hempstead, I became superintendent in Berkeley, Calif., for six years, then successively filled superintendencies in Rochester, N.Y. (five years), Boston, Mass., (nearly five years) and Paterson, N.J. (six years). I never was vested in any of these states.

In 1997, I returned to New York for the third time to become superintendent of the Newburgh School District. This time I was placed into Tier 4 of the retirement system, the most restrictive category. Fortunately for me, the state legislature passed a special bill in 1999 that enabled returning educators to be placed in their original tier, in my case Tier 1. By returning to Tier 1, I was able to receive credit for 10 years of my Illinois experience. But the Tier 1 regulations stipulate a 50 percent penalty for those out-of-state years.

None of my other 19 years of experience as an educator in California, Illinois, Massachusetts and New Jersey can be credited to my New York retirement service. If I decide to retire at age 67, after three more years of serving as a superintendent in New York, I will receive an estimated pension of about $39,474. Because my total years of service in New York would have been 1.4 years if I retired at age 67, I would be assessed another penalty. The current retirement formula penalizes any educator retiring before finishing 20 years of New York service. My penalty would be 30 percent, or 5 percent for each year under 20 years.

If I retired at age 67, my retirement compensation would have been reduced by two penalties. The first would be the penalty of 50 percent on the out-of-state service. The second would be the 30 percent penalty for not working 20 years in New York state. So after both penalties are assessed, my estimated retirement benefit would be a little more than $39,000. Clearly these disincentives won' t entice many school leaders to move to New York.

In comparison, if I had served as an educator in New York state for my entire career and retired with 40 years of service, my pension would be about $111,300. This would be based on a final average salary of $148,400. Because of the non-portability, I stand to lose close to $71,826 a year.

Turn Back Time

The lack of portability is far less of a problem for teachers. Most teachers stay in the same state during their educational career. It is the superintendency that is in flux. Since the talent pool in New York state is becoming more and more scarce, attracting quality candidates from other states is a plausible solution to New York's dilemma.

Unless this issue is realistically addressed, many fine superintendents who are willing and ready to move into new leadership challenges will stay put in their home states. And New York's shortage of quality educational leaders will become even more acute.

Personally, if I could change the past, I never would have left New York state the first time. I would have built up quite a retirement bank by now.

Laval Wilson, a superintendent for 261/2 years, can be reached at 7 Penny Lane, No. 1, Newburgh, N.Y. 12550.