Shelby County Schools Superintendent Dorsey Hopson said Thursday he will ask the Board of Education to end health insurance benefits for district retirees ages 65 or older to help reduce pension obligations.
Along with other potential changes, the revisions could save the district $30 million annually, he said.
“We could be putting that money into the classroom instead,” Hopson said.
The superintendent’s comments came during a monthly radio program in which he and board member Kevin Woods answer questions from community members.
Hopson said the changes would be made easier because retirees now can sign up for health insurance through the federal Affordable Care Act, which offers “more options at a much reduced price,” he said.
“Someone made a decision 40 to 50 years ago to offer more benefits to employees,” Hopson said. “At the end of the day, we’re feeling the effect of those decisions because nobody put the money aside for those benefits.”
Earlier this week, the board voted to cut $125 million from the district’s budget, laying off more than 400 employees, closing three schools and pulling $25 million from its savings account. The board will ask the County Commission for another $15 million to avoid further cuts.
Responding to The Commercial Appeal’s report Monday about possible benefit changes, Memphis Shelby County Education Association president Keith Williams asked the board Tuesday to seek input from the teachers union before moving ahead.
“We ask if there’s going to be a conversation about lowering or altering the insurance benefits of retirees or employees, that we be a part of that conversation before any decisions have been made,” Williams said. “We do not know what you have planned. We’ve heard lots of things.”
On Thursday, Hopson assured radio listeners that any changes will include discussions with district employees.
“We want to engage the employees before we make the change like this,” he said. “Before your alarm bells go off, take a deep breath and know we’re going to do this in a thoughtful way.”
Shelby County Schools is one of the largest employers in Greater Memphis, with a payroll that includes about 10,000 educators and staff.