Pensions biggest change to Intermediate School District budget

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By Maleah Egelston
Ingham County Chronicle staff writer

The Ingham Intermediate Board of Education’s audit report showed that it was under budget for the 2012-2013 school year.
Auditing is part of the school district’s financial routine in order to keep the district transparent, said Lonnie Thomas, district public relations and communication assistant.

Bruce Dunn, a CPA from Maner Costerisan who prepared the report, said that the biggest changes in last year’s budget was the new pension system the district had to implement.

The pension changes resulted from the 2012 Pension Reform Act, which set new standards for school employees’ pensions including capping employer contributions, limiting the coverage of retired employees and changing employees’ options for health coverage.

These changes increased the cost of the school district’s pension plan from $4 million to $5.3 million over the last school year. According to Dunn, this has created a lot of problems for district employees.

“Employees now pay more for health insurance,” Dunn said. “Over the long term, the impact will be drastic. It’s definitely a liability.”

Helen McNamara, assistant superintendent of finance and business for the district, said the board has been discussing pension plan changes with school district staff.

“We reviewed the changes with staff last month,” Mcnamara said. “We wanted to make sure they were informed.”

One way the district plans to avoid future debts resulting from these changes is through creating a new pay grade for its teachers. Susan Tinney, director of human resources, said that this change will help fix the large gaps in the district’s payroll.

“A large portion of our budget goes to payroll related items,” Tinney said. “Creating a new pay grade will eliminate the large gap we have between the top two pay grades.”

Even with these changes, Dunn said that the school district is in a great place financially because it doesn’t have much long term debt and it has its spending under control.

“The school district has a wonderful opportunity to expand because of its finances” Dunn said. “They should be seen as a role model for the state.”

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