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Neenah Lawsuit Reveals Extent of School Employees' Benefits

Comments | Posted in mi perspectives | By MacIver Institute | Posted July 26, 2012 8:24 AM

A lawsuit involving the Neenah School District illustrates just how important Act 10 has been to state, local governments and school districts across Wisconsin. 

The Post Crescent reports:

NEENAH -- Six retired Neenah school administrators claim in a lawsuit that the school district breached their contracts by requiring them to pay 10 percent of their health insurance premiums. 

District Administrator Mary Pfeiffer said Wednesday the lawsuit is without merit and will be aggressively defended. She anticipates the district will file a counterclaim to recover health insurance contributions that have not been fully paid by the plaintiffs since 2006. 

The six administrators -- Tom Beck, John Hamilton, Larry Krebs, Evelyn Reddin, Jeff Zdrale and John Zwirchitz -- retired under a contract in which taxpayers paid 100 percent of their health insurance until age 65. 

Over the years, the Board of Education changed its health insurance plans and now demands that employees pay 12.6 percent of the cost. Pfeiffer said Neenah retirees historically have paid the same percentage as employees. Language in the administrators' contract states that the health plan "may be changed from time to time" and that "retired administrators will automatically migrate to the new plan upon its approval by the Board of Education." 

Pfeiffer discovered that the six plaintiffs were making no premium contributions.

So, just how sweet of a deal do these retired administrators have and how much will the move by the District impact them? The Post Crescent details:

The six retired Neenah school administrators who oppose a 10 percent health insurance premium contribution receive sizeable benefits from the school district. The following benefits are in addition to those provided through the Wisconsin Retirement System. 
 
Tom Beck, 61, retired as director of operations and maintenance 
• $352,948: A stipend of $229,464 and health and dental benefits of $123,484. Lawsuit seeks to recover $9,428. 
Larry Krebs, 61, retired as director of business services 
• $345,707: A stipend of $283,261 and health and dental benefits of $62,446. Lawsuit seeks to recover $3,215. 
 
John Hamilton, 62, retired as elementary school principal 
• $229,605. A stipend of $211,902 and health and dental benefits of $17,703. Lawsuit seeks to recover $2,079. 
 
Evelyn Reddin, 62, retired as elementary school principal 
• $317,799: A stipend of $211,902 and health and dental benefits of $105,897. Lawsuit seeks to recover $5,584. 
 
Jeff Zdrale, 65, retired as director of curriculum and pupil services 
• $385,342: A stipend of $261,858 and health and dental benefits of $123,484. Lawsuit seeks to recover $337. 

John Zwirchitz, 63, retired as elementary school principal 
• $391,184: A stipend of $244,238 and health and dental benefits of $146,946. Lawsuit seeks to recover $3,989. 
Source: Neenah Joint School District
This kind of long-term spending on future legacy benefits was a ticking time bomb. 

Thanks to recent reforms, state and local units of government, including school districts, can now address those concerns without having to give up something just as costly in a collective bargaining process that was skewed against taxpayer interests. 

While some will continue to resist these reforms, they were clearly needed.

As time passes, the fate of the Wisconsin public employee labor reform package becomes more and more clear.

It's Working.