Phased retirement contractor makes pitch

A representative from Smartschoolsplus told the Maricopa Unified School District board members Wednesday that using a program called phased retirement would save the district money and incentivize veteran employees to continue working.

Phased retirement is a program that allows eligible employees to continue working as contractors of Smartschoolsplus while still receiving retirement benefits.

“They would become our employees and we would contract them back immediately to their same position or for one in which they are qualified,” said Andy McClelland, director of operations at Smartschoolsplus.

This is a good way to incentivize employees, McClelland said. They would receive 80 percent – or another predetermined percentage – of their regular salary and also be able to draw on retirement benefits.

If an employee usually makes $50,000 a year, phased retirement would allow them to receive 80 percent of that, or $40,000. In addition, they are receiving around $34,500 of retirement benefits.

“You can look at it as a way to reward your veteran loyal workforce,” McClelland said.

Board members expressed some interest in working with Smartschoolsplus, but said they wanted to hear an estimate on how much it costs to work with Education Services, Inc., the other company that specializes in phased retirement. MUSD contracted employees through ESI last school year, but this year the district does not.

It would cost the district approximately $64,955 to pay a district employee without contracting through Smartschoolsplus. That includes the employee’s base salary, and also social security, workers compensation, unemployment and other payments.

If the district were to work with Smartschoolsplus, it would cost the district approximately $48,854 to pay a district employee. That includes the same additional payments.

That saves the district about $16,101, McClelland said.

“This is a creative way to offer this program, to incentivize people to stay, but also to achieve cost saving for that employee,” McClelland said.

Smartschoolsplus charges a 4 percent service fee per employee to contract with the district. For an employee who has a $40,000 base salary though Smartschoolsplus, the 4 percent service fee equates to $1,600.

If there were no employees who were eligible for phased retirement, the district and Smartschoolsplus would have a service agreement but there would be no charge.

McClelland said that Smartschoolsplus offers one thing that its competitor, ESI, does not – financial advising for potential employees.

Superintendent Steve Chestnut said phased retirement is a good way to incentive employees nearing retirement to stay with the district.

Board members did not consider a contract with Smartschoolsplus Wednesday night, but they can in the future.

Later in the meeting, board members decided to change the time of the regular board meeting from 6:00 p.m. to 6:30 p.m. so parents have more time to get to meetings after work. The next board meeting will be held Oct. 9 at 6:30 p.m.