H-F Board provides position on 2005 pension policy violation

The salary boosts and pension benefits to former Homewood-Flossmoor High School Superintendent Laura Murray that have been ruled noncompliant have led to changes in board policies and restrictions on pay and pensions, District 233 School Board President Richard Lites said.

Resident Rich Kaplan came before the board at its Tuesday meeting asking for clarification after a recent story in the Chicago Tribune used Murray’s benefits as an example of extreme payments to retiring staff. The article showed how Murray’s pension jumped to $288,000 a year because she got two salary bumps during her final two years with the district that raised her salary to $402,331 when she retired in 2008, even though a new pension law approved by the Illinois legislature in 2005 said raises should not be more than 6 percent to retiring teachers and administrators.

Laura Murray

Because H-F went over that margin, the Teachers Retirement System (TRS) fined District 233 a penalty of $225,884, although TRS calls it an “excess salary increase” contribution to the agency, according to the paper. The district paid the fine “under protest.” It was the largest penalty for an individual pension assessed by TRS. Other districts paid more in total penalties.*

“Why was it done at that time, and is it still going on?” Kaplan wondered. 

In response, Lites read a prepared statement:

In response to the May 24th Chicago Tribune Illinois pension article, which focused on a one-time Teachers Retirement System (TRS) penalty the district was assessed in 2008, we want to make clear that our current Board of Education clearly understands its charge, the law and their financial responsibilities to the community and its young people.  The board, administrators, teachers and staff work diligently to provide a first-class education for all students of Homewood-Flossmoor Community High School, while being careful stewards of our resources.

With respect to the issue of Dr. Murray’s contract, there was new pension legislation that was passed in 2005. That new law was ambiguous as to what districts were permitted and not permitted to do with respect to retiring administrators. 

As a result, the then-Board of Education sought legal advice regarding whether its actions would be compliant with that law or not. Based upon that legal advice, the Board of Education in good faith, believed that its actions were permitted under the new law. The TRS ultimately disagreed , as it did with the actions of many other school districts.

Indeed, as the article explained, many districts were assessed penalties for taking actions that they believed complied with the new law. The result was a one-time penalty being assessed. As a result of that ruling and further clarity on the new pension requirements, the Board of Education adjusted its procedures with respect to future teacher and administrator retirements and compensations to ensure that they are compliant with the 2005 pension law.

The board continuously strives to have policies that are consistent, represent best practices and are in conformity with the law. The board ensures that all contracts and financial decisions are in line with the district’s long-term financial plan, which includes being able to withstand the state of Illinois’ current financial crisis, while keeping excellent programming and resources for our students.

The board will continue to listen and act on concerns presented by our community and encourage your participation at board meetings. Please continue to contact us with questions and concerns regarding any issue — we are dedicated to being responsive and transparent to members of this fine community.

“I accept that.  It sounds very positive to me. The concern I have is why this board would have given two 20 percent increases to someone already making a salary of $208,000 with a pension of $200,000 when that money could have gone to the students, instead?” Kaplan said.

“We do have an overall approach to every issue that particularly impacts students,” Lites said. “Compensation being one of them.”

Lites said the board meeting was not the right forum for the discussion, but stressed that there are “legitimate answers, cogent answers” to the issues Kaplan raised.  He recommended Kaplan schedule an appointment with school administrators for a more detailed question and answer session.

“There are good things happening here (at H-F),” Lites stressed.


* This story originally stated that District 233 paid the highest penalty in the state.

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