Retirees hit MCS with 3 lawsuits
MUNCIE, Ind. — Three lawsuits have been filed against Muncie Community Schools in response to the district ending its early retirement incentive last month.
Teachers, administrators and support staff are suing, saying no longer contributing money toward their health insurance was an "unlawful decision."
Previously, MCS offered retiring employees between the ages of 55 and 65 — and later 58 through 65 — the same insurance plan as active employees, with MCS covering most of the expense. The benefit ended when the retiree qualified for Medicare at 65.
It's an unusual perk for a district to offer, and one reason MCS became known locally for its great health insurance. For the district, the incentive helped get employees with the highest salaries off the payroll.
In November, the board approved Superintendent Steven Baule's recommendation to save $2 million next year alone by no longer contributing money toward retirees' insurance, and reducing the amount contributed to non-teaching staff, effective in January.
The Star Press reported in November many retirees would see a huge increase in cost — a few said they were facing paying $10,000 per year — and the 143 currently using the benefit were left with six weeks to replan their lives.
MCS retirees left scared, scrambling for insurance
In the lawsuits, filed Dec. 21 and 22 by local attorney Jason Delk, retirees allege MCS is in breach of contract by ending the incentive. They each met the requirements outlined in the contract when they retired, according to the documents.
The retirees, who are all under 65, also said in the lawsuit they were not given prior notice.
"The (retirees) would not have elected to retire early had they known that MCS and the Board would cease providing health insurance benefits to early retirees," one lawsuit stated. "... and instead, would have remained in the employment of MCS."
Teachers routinely "declined an increase in active teacher compensation" to keep the incentive, according to the lawsuit filed by 38 retired teachers.
The other two lawsuits were filed by 12 retired support staff members and six retired administrators, including some well-known names: former Central High School principal Tom Jarvis, former director of human resources Kathy Ray and former Southside High School principal and assistant superintendent for policies & planning Rebecca Thompson.
Retired teachers, MCS staff will pay more for insurance
Superintendent Steven Baule declined to comment Thursday through district spokesperson Ana Pichardo, saying the district can't comment on pending litigation. Since the decision, MCS has held two informational meetings to help retirees look at other options.
Back in November, Baule told the board: "We don't really have a choice." The district needed to save $2 million because it was not approved for the full $10 million loan it expected for 2017.
"We’re committed to looking at reductions where it did not affect students," MCS board member Debbie Feick told The Star Press Nov. 20. "We’ve been steadfast in that."
Incurring more legal fees will not be ideal for the district already facing an estimated $11.5 million deficit. And MCS is still also locked in what became a lengthy legal battle with the Muncie Teachers Association over the 2014-15 teacher contract. The Star Press previously reported MCS was billed for more than $75,000 between July 2015 and August 2016, when the contract negotiations started getting heated.
Benefits make up a large chunk of the total budget, about 21 percent. Before dropping the incentive, benefits were projected to cost MCS $12 million in 2016.
Contact families & education reporter Emma Kate Fittes at 765-213-5845 and follow @EmmaKate_TSP
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