The Final Report - Malcolm Shabazz City High School, Madison WI

Decision Item #28:ELIMINATE ADMINISTRATORS’ RETIREMENT PLAN (NOT WRS)(cont.)Anticipated Savings: Option A is elimination of the program over a 5-10 year time. This option(cont.)allows all participants who have already elected to begin their five-yearcontribution period to continue the program. This option would not resultin any District savings until after year 5. At year 5, savings would occurover a 3-5 year time frame until maximum savings of $146,880 isachieved annually thereafter, This estimate assumes 4 eligibleparticipants each year at a maximum eligibility payout.Option B is for immediate plan elimination resulting in the Districtdiscontinuing District contributions to all those who have not given noticeto retire. This would accelerate District savings by five years and providethe District additional savings of $146,880 per year over a five year timeperiod. Total additional potential savings under this option is $734,440.Either option has choices of providing lump sum payouts to existingretiree participants, or continuation of existing retiree payout plans overthe stated 3-5 year period. District savings between these two payoutalternatives are negligible. The potential additional benefit of lump sumpayouts is earlier elimination of plan administration responsibilitiesthrough Human Resources.Student Impact:Strategic Priorities:Board Priorities:Effectiveness:Redundancies orAvailability of theService Elsewhere:Service Delivery:Elimination of the Administrator Retirement Plan program should have noimpact on students or student achievement levels.NANAThis program was intended to serve the District through overall costsavings generated as a result of administrator turnover. Over time, thisprogram has evolved to result in additional District costs, instead ofDistrict savings as intended. Elimination of this program would have longtermpositive financial impact for the District.Administrator retirees already receive retirement benefits at retirementthrough other programs. Elimination of this program to administrators willbe perceived as taking away a benefit.No impact.Virchow, Krause & Co. LLP Page 131March 11, 2002