NSO NOW!

Retirement Board approves changes

The following message from the NEA Retirement Board notifies Plan participants of recently-approved changes to the Plan:

If you are a participant in the Employees Retirement Plan of the National Education Association, we want to inform you of recent developments.

The Retirement Board voted at its Nov. 30, 2010 meeting to approve a Retirement Board Committee recommendation, and the motion passed with the NSO representative voting, “no.”

Since February 2010, a committee has been investigating the creation of a freeze policy as an alternative to participants having to leave the plan and jeopardizing any benefits.

Using information from the Plan’s counsel and actuary, along with input from the Plan Board, the committee recommended that a freeze policy be developed that would establish requirements for one or more employers ending the accrual of additional pension benefits by its participants.

As proposed by the committee a freeze policy would:

• Include both hard and soft freezes.
• Allow post- soft freeze disability retirement.
• Require that all employee groups would be affected by the freeze.
• Limit the number and frequency of freezes by a single employer.
•  Not change the employee contribution arrangement between participants and the employee.
• Ensure that contribution rates for frozen employees are determined on a flat-rate basis.
• Require employers to pay freeze-related costs.
• Allow the reconstruction of benefits on a case-by-case basis with approval of the Retirement Board and the NEA Executive Committee.
• Require the adoption of an administrative procedure document.
• Require the employer seeking a freeze to demonstrate its ability to make payments.
• Prohibit a frozen employer from shifting liabilities to other participating employers.

Policy language is now being developed for eventual review by the Retirement Board and NEA Executive Committee.

Please remember that any change to the provisions of the collective bargaining agreement must be negotiated and agreed to by both parties.

We will keep you informed of any further developments and action taken.

If you have any questions, please contact Pat Chavez at pchavez@nea.org; Michael Coleman at aeacoleman@sbcglobal.net; or Chuck Agerstrand at cagerstrand@mea.org.