This is a story of unconscionable greed … and shocking betrayal … that, unless corrected, will result in a retirement in poverty for many DeKalb County [GA] Schools teachers and other employees who have spent their entire careers serving DeKalb County students. This is one story in an occasional series illustrating how DeKalb County Schools’ superintendents, overpaid but incompetent central office personnel and most Board members enrich themselves and fluff their resumes standing on the backs of children and teachers.
For decades, thousands of DeKalb County public school teachers have educated, guided and enriched the futures of DeKalb County’s children. Since 1979, these dedicated public employees have been promised retirement benefits through a Tax Sheltered Annuity (TSA) established by DeKalb County Schools, as an alternative to Social Security. The Board promised to include TSA contributions in its annual budget as an established percentage of every employee’s compensation. The TSA Plan was generally perceived as – and was intended by the Board to be – a compensation and benefits “perk” to attract and retain superior teachers and staff.
Thirty years later — on July 27, 2009 – the DeKalb County Board of Education, faced with a budget shortfall caused by a bloated central office, decided to balance the budget on the backs of its hard-working teachers and stop contributing to the TSA Plan. This “funding freeze” – with no prior notice – violated a promise enacted in Board policy that had its roots in the original resolution authorizing the TSA Plan: a two-year notice to teachers and others covered by the TSA before reducing or ending TSA funding.
DeKalb County Schools has wrongfully withheld money owed to DeKalb’s teachers – and any interest that might have been earned – by instituting a “freeze” on promised contributions to the TSA Plan without the contractually required, two-year notice. Accordingly, a class action lawsuit seeks redress for this continuing wrong.
TSA History and Hijack Timeline
- 1977: Reviewed the extent to which DeKalb County Schools’ employee retirement benefits should incorporate, or rely upon, Social Security.
- 1977 – 1979 : Identified and weighed the pros and cons of Social Security versus an alternative employee retirement benefit administered privately.
- 1979: [May 14, 1979] Passed the following resolution (emphasis ours):
NOW THEREFORE, BE IT FURTHER RESOLVED, That in the event of withdrawal from Social Security, funds currently budgeted for Social Security shall be used for the support of the alternative plan, and the funding of the alternative to Social Security shall be adjusted annually in proportion to the employer’s Social Security amount; and
BE IT FURTHER RESOLVED, That before the budget is adopted each year, a determination shall be made as to the amount that would have been required for continued participation in Social Security during the current year and the projection shall be made as to the amount that would have been required to continue participation in Social Security during the forthcoming budget year, and
BE IT FURTHER RESOLVED, That the amount required for the forthcoming year to continue funding Social Security shall be the amount budgeted to fund the alternative to Social Security, and that to the Board of Education will give a two-year notice to the employees before reducing or terminating these funding provisions.
- 1979: [May 21, 1979] More than 70% of DeKalb County Schools’ employees approved the alternative, private plan providing Social Security-type benefits. TSA funds in individual employee accounts would be tax-sheltered until needed, or withdrawn.
- 1983: [July 11, 1983] Established the TSA Plan (Alternative to Social Security)..
- 2009: [July 27, 2009] Facing difficulty balancing its budget, the Board suddenly declared an emergency meeting. Though not on the published agenda, CFO Marcus Turk suggested a temporary suspension of funding for the TSA and the Board agreed.
- 2009: [August 1, 2009] Funding for the TSA Plan was suspended and has not been restored.
- 2010: [January 25, 2010] Then-Superintendent Crawford Lewis announced DeKalb County Schools’ funding for the TSA Plan would be restored on July 1, 2010. It was not.
- 2010: [May 10, 2010] The Board realized its error in violating its own policy and suspending TSA contributions. The Board voted to “waive” its TSA policy requiring a two- year notice when contributions were suspended or terminated.
- 2010: [June 14, 2010] The Board voted to eliminate provisions of the Board’s Bylaws and Policies that were “not part of the TSA Plan itself,” presumably to delete and remove the two-year notice requirement that the Board, by its earlier illegal actions, had violated.
Breaking the Promise
- The DeKalb County Board of Education breached a clear, legal duty by failing to meet, in 2009, 2010, 2011, 2012 and 2013, its clear, unambiguous, contractual duty to fund the TSA Plan.
- The DeKalb County Board of Education breached a clear, legal duty by failing to give employees a two-year notice before reducing or terminating the TSA Plan funding provisions.
- The DeKalb County Board of Education made this decision based on a misguided notion that the board’s own written policies could be broken at any time, as stated to the AJC by Tom Bowen, Board Chair at the time of the cut, “A board can waive or go against its own policy because the board is the policy-setting body.” [http://www.ajc.com/news/news/local/teachers-file-lawsuit-over-dekalb-retirement-plan/nQr4Q/]
Windfall Elimination Provision (WEP)
Social Security Amendments of 1983
Without TSA, the Windfall Elimination Provision compromises DeKalb County Schools’ retiree benefits. For those eligible to receive Social Security (i.e., worked 40+ quarters for one or more organizations that did pay into Social Security), benefits are reduced by 35% or more if teachers/staff ultimately retire from and receive a pension from an organization that did not pay into Social Security (i.e., DeKalb County Schools). Even Social Security collected by a teacher on a spouse’s work record will be reduced by 35% or more. This is true even though the spouse worked for employer(s) who paid into Social Security and/or if the teacher worked elsewhere (for at least 40 quarters) for employers who were paying in to Social Security, but who retires from DeKalb County Schools. This calculator shows the reduction in the Social Security payout for retirees from DeKalb County Schools.
The TSA Plan offset this disparity to a large extent. But, since 2009, teachers in DeKalb no longer build their TSA retirement benefits through Board contributions. In addition, they will not get the full Social Security benefits that they would have received had they never worked for and/or did not retire from DeKalb County Schools. This is true regardless of how many quarters teachers and their previous employer(s) paid into Social Security.
The Windfall Elimination Provision is just one more reason why DeKalb County Schools’ not funding TSA is so damaging to teachers if they hope to have a secure retirement.
A shocking story of betrayal of trust, indeed! These people, including the current DeKalb County [GA] School Board members, have no shame and they don’t care who knows.