Sweet Deal: Another Teachers Union President's Pension On Taxpayers' Dime
Fraser Schools agrees to pension spiking arrangement with union official
Editor's note: This story has been updated with Fraser Public Schools' response.
The new president of the state’s largest teachers union has a special arrangement with the school district where she used to work that lets her keep accumulating school pension credits even as she works for the union.
Paula Herbart has been considered an “educator on loan” since she went to work full time for the Michigan Education Association in the 2012-13 school year, according to documents received through a Freedom of Information Act request.
The arrangement is the same as her predecessor Steve Cook had with the Lansing School District, with one difference. Cook was able to substitute his six-figure MEA salary for the much lower public school salary he previously earned to increase his eventual state pension payouts.
By contrast, Herbart’s retirement benefits from the underfunded state-run school pension system will be based the salary she earned as a real school employee, not as a union president.
Herbart is considered to be on an unpaid leave of absence, according to the local union contract. Fraser Public Schools continues to pay her the $83,875 salary she was earning before going to work for the union full time, plus health insurance benefits and pension credits. The teachers union reimburses the district for their cost.
The arrangement is not prohibited by state law and was approved by her district’s school board and superintendent.
The Michigan Public School Employees Retirement Act allows school employees to go on leave and still accrue pension credits while working for a professional services organization, the definition of which includes a teachers union. A change made to the law some years ago prevents Herbart and others who started working before 1996 from spiking their school pension by using their much higher union salary in the pension formula.
Herbart’s pension will be based on the amount she earned while still teaching, not the salary she currently collects from the MEA. Her pension payouts will, though, get a boost from being based, in part, on her time working for the union.
Fraser Public Schools Superintendent David Richards said the state law allows for the pension-spiking scheme and the state lawmakers had a chance to end it but chose not to. See Richards' full response here:
The MEA didn’t respond to an email seeking comment.
“It’s inappropriate for private workers to have their pensions guaranteed by taxpayers,” said James Hohman, director of fiscal policy for the Mackinac Center for Public Policy.
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.