News Story

Paid to Leave: Generous Teacher Buyouts at East Lansing Public Schools

An early-retirement incentive may actually have some East Lansing Public School teachers putting off retirement in hopes of getting a lucrative seniority bonus, says Michael Van Beek, the director of education policy at the Mackinac Center for Public Policy.

East Lansing gives its top three teachers in seniority up to 50 percent of their salary when they retire, according to the teacher’s union contract. Teachers with 15 years or more get 30 percent of their annual salary; those with 20 years get 40 percent; and those with 25 years get 50 percent.

Teachers hired after July 1, 1992 are not eligible for the incentive.

“If the goal is to save money by incentivizing teachers to retire, the incentive for teachers is to hang around until you are the top three,” Van Beek said. “Can you hang around for $35,000, $40,000? Buy a boat when you retire? Yeah.”

Van Beek said before 2007, all retiring teachers received up to 50 percent of the annual salary as part of a retirement incentive. He said that was changed to just include the top three.

The lucrative retirement bonus is rare in Michigan schools, Van Beek said.

East Lansing Superintendent David Chapin didn’t respond to an e-mail and a message left at his office.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.