DROP vote could alter classrooms
Published 10:58 pm Friday, March 11, 2011
The Alabama Senate voted this week to end the state’s Deferred Retirement Option Program (DROP) as one of a number of cost-cutting measures being pushed by Gov. Robert Bentley.
The program, started in 2002, allows veteran state employees to achieve financial incentives for delaying their retirement. Initially, the program’s design was to prevent outgoing employees from being able to tap into their retirement accounts while also retaining experienced workers.
Exactly how much money the state will save annually by cutting the program will take some time to determine. But the effect that abolishing the program has on Alabama public schools may be seen sooner rather than later.
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“I believe that when (teachers already in the DROP program) get to 30 or 32 years they will retire,” Demopolis City Schools Superintendent Dr. Al Griffin said of the effects he thinks such a vote may have on school systems statewide. “I expect mass retirement this spring if the vote is to repeal DROP.”
Since its 2002 inception, the program has allowed school systems to retain its veteran teachers while simultaneously providing a motivation for other educators to turn down opportunities in classrooms in neighboring states or the temptation to leave academia altogether.
“That was their motivation to start with was to retain your seasoned teachers,” Demopolis City Schools payroll clerk Jennifer Roemen said.
As for Demopolis City Schools, the elimination of the program may not have as profound of an effect. The program currently benefits only eight DCS employees and has seen an average of less than three enrollees per year since its launch in 2002.
“Since that ever began, I’ve only had 21 people (sign up for DROP).” Roemen said. “That includes the people that are in there right now. That is since June of 2002.”
The program has benefitted individuals who are at least 55 years of age and have at least 25 years of service in that participants continue working while also drawing retirement benefits into a savings account.
The program has since served as a strong recruiting and retention tool for the state in a number of areas including education.
“A lot of the dynamics of teaching have changed,” Roemen said. “I don’t know if a lot of the older, seasoned teachers want to make those changes without that extra incentive.”
“That’s the case for every school system,” Griffin said. “Your veteran teachers who have not reached 55 or do not have 25 years, I’m sure they are going to weigh their options.”
Eliminating DROP will prevent other long-time state employees in higher paying jobs from reaching the point of becoming a heavy financial burden on the state. A list released Thursday by the Legislative Fiscal Office revealed AEA officers Joe L. Reed and Paul Hubbert as the top two beneficiaries of DROP. Reed has a DROP balance of just under $1.5 million while Hubbert’s account currently holds just below $1.4 million.
The top four beneficiaries have an account containing more than $1 million while five others possess DROP benefits surpassing $800,000.
The common state retiree will not receive DROP benefits coming close to those totals. Still, doing away with the program figures to save the state money going forward as it replaces more experienced employees carrying higher salaries with newer workers at basement level pay.
“Financially, let’s leave the jury out on this one,” Griffin said, pointing out that any estimation of what the education budget or other state programs may save in the long run would be purely speculative. “I want to see in three or four years what the effect is. I have heard it from both ends.”
While the impact on state spending will take some time to weigh, eliminating DROP will certainly have an effect on state workers who had been looking forward to enrolling in the program.
“I just hate to see them do that to people who are so close,” Roemen said. “For people who have stuck around, trying to get to the age (of DROP enrollment), it is really discouraging.”