Mehlville School Board Approves Letter for PSRS Cap

By a 7-0 vote, the Mehlville School Board approved a letter to the Board of Trustees of the Missouri Public School Retirement System (PSRS) recommeding the organization’s plan to cap contributions at 14.5 percent for employees with a matching 14.5 percent for school districts.

“While (our) letter is mostly symbolic, it does ask the PSRS board to look for ways to keep the contribution percentage as low as possible in order to minimize the burden on working educators,” said Mehlville School Board President Venki Palamand.

Contributions are obligatory and can pose a financial challenge, especially to new teachers, who are paid less than experienced peers, he said.

The board first spoke of sending a letter . At the September board meeting, they heard a first draft, prepared by Secretary Elaine Powers. 

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 at the retreat. 

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.

“The letter is also a chance to let our residents know that the state retirement system places an ever-increasing strain on our budget,” Palamand said.

The district’s mandated contribution rate for 2011-2012 is more than $7 million, with an equal amount being contributed by more than 700 certified employees.

“Our school district has a substantial stake in the PSRS and we appreciate (its) efforts to reform the system to limit future increases.” Palamand said.