Board to Draft Letter Advocating Pension Contribution Cap

At the suggestion of board member Rich Franz, the Mehlville school board will draft a letter to the Public School Retirement System (PSRS) saying they would support a cap on the district and teachers’ pension contribution.

The board agreed to the letter at their annual school board retreat, where they also discussed and for the year.

Public School Pension Underfunded

The state legislature decides the rates teachers contribute to their pention funds and the school district matches their contribution. Right now, a teacher contributes 14.5 percent to the pension fund, a number that has risen by .5 percent every year for the last four or five years.

The contribution cap is 15 percent, but legislators have the power to raise that cap.The district's Chief Financial Officer, Noel Knobloch, said if legislators didn’t raise it, the program would become less and less funded.

“I would be surprised if they could keep it there, I’ve seen estimates that could go as high as 19 percent,” he said.

If contribution rates continue to rise and teachers’ salaries stay the same, they will receive less take-home pay. It will also cost the district $250,000 a year. In six years, the district would be paying $1.5 million more than they’re paying today with the same level of salaries, Knobloch said.

Larry Felton said the Missouri School Board Association supported freezing the contribution rate at 14.5 percent after studying the cost of living and benefits.

School Board to Support Cap

Franz suggested the board write a letter acknowledging the already unfunded liability. He said while teachers certainly deserve a pension, it was unfair to ask the taxpayers to continue to fund an open-ended benefit to our teachers.

“There has to be some motivation on the part of school boards, not just this board, but across the state to send a message to the state legislature that that increase cannot continue to go on indefinitely,” Franz said.

The board selected Secretary Elaine Powers to draft the letter with input from the board, Knobloch and Superintendent Eric Knost.

The board acknowledged the letter might not have an effect on the situation, although they would send it to local representation as well.  

“It lets our folks in the district know that we’re aware of the problem and it also educates the folks in the district about where the real problem is, it’s not with us,” Franz said.

 “We can definitely talk about the fact that it’ll be a burden not just for the people funding the school district… but it’s also a burden to the people who are working,” Board President Venki Palamand said.