School district rethinks decision to cancel benefit: Disabled retirees’ protest APS plan to discontinue life-insurance policies [The Akron Beacon Journal, Ohio]

May 29--Akron Public Schools is reconsidering a decision to cancel the term life-insurance polices of 239 disabled retirees.

"There are faces behind numbers and sometimes we have to slow down, and sometimes we have to back the car up, and we have to understand and look at the faces behind the numbers and understand their situation," said Superintendent David James.

James on Friday talked with two disabled retirees, David Bolyard and Ben Cully, who had worked for the district as painters.

Bolyard staged a one-man protest Thursday afternoon outside the district office. He sat beside his wheelchair near the parking lot entrance without wearing his prosthetic leg.

Cully joined Bolyard when he resumed the protest Friday morning. Cully said the conversation with James was satisfying enough so they ended the protest.

"He went and parked his car and came over and talked with us," Cully said. "He did make the effort to talk to us. He was nice to us."

James assured the pair he was giving the matter more consideration.

"I have our benefits folks looking at what some of the options are for their coverage," James said. "We haven't made any final decisions, but I did promise both gentlemen out there that I would take a look at it and I wanted to hear more about their situation and what they're facing."

The retirees received letters last Saturday informing them that the district -- which has offered the benefit for at least 30 years -- would no longer pay the premium as of Monday.

They were given a month to convert their policy to an individual, whole life plan, which could be cashed in before death, but typically costs more.

The district offers term life insurance to its employees with a benefit paid upon death of 125 percent of the employee's salary.

But all other retirees either lose that insurance or convert it to an individual policy when they leave the district.

If the district kept the disabled retirees in the plan, it would pay a single group premium of $492,618 a year effective July 1, according to the district's benefits manager, Tod Wammes.

Although nearly 3,000 people work for Akron Public Schools, the retirees' share comprises 30 percent of the premium.

Canceling the retiree policies would save about $148,000 annually for a district that faces a projected $8 million deficit next year and recently announced the layoffs of 110 employees, including 84 teachers.

Union studies matter

Attorney Larry Vuilleman said he was working with Akron teachers' union President Bill Siegferth to determine what role, if any, the union has in the matter. The benefit was never negotiated by the union.

He's also researching whether the district has a legal obligation to honor its commitment to the retirees. The union has obtained a letter on APS letterhead, dated Feb. 15, 1994, from a disabled retiree.

The letter informs the retiree that the district will provide the life insurance for as long as the person receives disability benefits from one of the state retirement systems.

The key words of the promise are underlined, the union asserts, stating that APS "continues to maintain term life insurance coverage on you for as long as you are receiving these benefits."

The letter, signed by Patricia Marmaduke, who was the director of staff relations, urges the retiree to keep the document with important papers and make beneficiaries aware of the policy.

"Boy, that's something upon which someone could reasonably rely and, boy, not only does it give notice to them, it gives some notice to the beneficiaries," Vuilleman said.

Roger Phillips has similar correspondence from the district in 2006 making the same underlined promise.

Phillips, a former head custodian, was hired in 1976 and retired with a disability in 2001 when he couldn't raise his right arm and had neck problems.

Phillips, who is 53, said he cashed out another policy a few years ago that he had for $10,000, figuring he could rely on the district insurance.

"I figured, 'why continue paying it when I have this one that the board gave me and told me I would have when I retired?' " Phillips said.

He said the superintendent returned his phone call Friday morning.

"He called me back this morning, and we talked," Phillips said. "He told me they're working on it and not to worry. I won't stop worrying until I get a letter from the school board saying they're going to continue paying for my life insurance policy."

James in a quandry

James said there's no question that the benefit should be discontinued going forward, but he's considering what should be done with the retirees who already receive it. Most are relatively small policies.

"They're not big payouts," James said of the retiree policies. "There's only one contract that's over $100,000. Most of them are under $60,000."

He said the district might consider agreeing to provide a base level of coverage, maybe $10,000 or $25,000 with the retirees making up the difference.

"Or we may just keep it the way it is and it's just for this group, they're grandfathered in," James said.

He said retirees will remain covered at least through the month of June as the district sorts it out.

Cully hopes they retain the current retirees' policies.

"I think they would be wise to just end it and grandfather everyone in," Cully said. "They wouldn't see it this year, but they would see savings."

John Higgins can be reached at 330-996-3792 or [email protected]. Read the education blog at http://education.ohio.com/.

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