Quantcast


Last updated: August 28. 2013 11:44AM - 75 Views

Story Tools:

Font Size:

Social Media:

A recent ruling by the Social Security Administration could cost educators and public school employees now and when they retire.



School employees who participate in the Missouri Public School Retirement System have been exempt from paying into Social Security, but the ruling could change that as early as next July.



Since the 1960s, Missouri’s public schools have operated under a



voluntary agreement with the Social Security Administration that allows



teachers, supervisors, principals and certain other employees with



teaching certificates to be exempt from paying into Social Security if



they were covered under the state system.



In 1984, Missouri expanded the kinds of employees who were eligible



for the state system and exempt from Social Security. As recently as



2006, Social Security officials went along with that interpretation,



according to Alan Thompson, general counsel for the Public School



Retirement System.



The federal agency informed school districts last month that too many of their employees have been exempt from paying Social Security taxes. But, it's unclear which employees would need to make the switch.



Under the new ruling, affected employees would have to pay two-thirds of their retirement withholding — 9 percent, if the contributions stay at the current 13 percent — into the retirement system, and 6.25 percent into Social Security.



Teachers’ salaries could be exempt from Social Security deductions, but extra-duty pay — for coaches and club advisers, for example — might not.



Some employees fear paying the dual witholding would mean less money in their paychecks. Districts that match retirement contributions could have to pay more as well.



Sedalia School District 200 Assistant Superintendent Nancy Scott said, "It could make us have to pay more."



The guidelines issued by the agency do not clearly define which employees will be affected.



“They’ve given us some guidelines, but there are some real fuzzy areas,” she said. Teachers, substitutes, supervisors, superintendents, assistant superintendents, librarians and principals would not be required to pay into Social Security.



Who constitutes a supervisor is still unclear.



“It could be many different job titles that would fall into that,” Scott said.



Scott was unsure how many Sedalia School District 200 employees would be affected by the ruling. Not all employees who hold teaching certificates work in the classroom.



“I think it is going to affect some people, but to what extent, we’re not really sure ... There are several different job titles that aren’t doing direct instruction, but they’ve got the supervision clause in there that may change things. It is a concern, but the big concern is when we’re going to know for sure who is going to qualify for what,” she said.



Sedalia Community Educators Association President Theresa Eads, a guidance counselor at Skyline Elementary School, said some employees affected by the change might never be able to draw Social Security benefits.



“The person I feel most sorry for is the person halfway through their career. They have nothing built up in Social Security, and not much built up in the retirement system, and not much is going to be built up that they can retire on,” she said.



Employees at every level are concerned by the ruling.



“I’ve seen deep concerns. I think a lot of people thought 'Well, it doesn’t affect me,' but when you start talking about it in a group, you realize it affects everybody,” Eads said.



The uncertain economy and the ruling’s vagueness about who will be affected are fueling people’s fears.



“I think we will be contributing more, and that means our bottom-line, bring-home pay will be less. But nobody can answer that question either. You start talking money, and what people thought they could count on, and that’s a a scary thing,” Eads said. “People have lost money in the stock market, in investments, and this is the same kind of feeling.”



If the ruling affects certain parts of employees’ salaries related to extra duties, Eads said she would expect some employees would discontinue those activities.



“If you’re not going to get but two-thirds of what’s coming to you, would you continue doing it?” she said.



The Missouri congressional delegation sent a letter to the commissioners of the Social Security Administration and Internal Revenue Service asking for clarification of the guidelines, the reason for the change, how and when the change will be implemented and how it would affect employees’ retirements.



“This change in long-standing policy has created a groundswell of angst and concern among Missouri’s schools,” the letter reads. Administrators believe the ruling will reduce districts’ ability to recruit and retain staff.



The biggest concern, Eads said, is getting clarification on the new rules.



“Everybody’s trying to get answers and we don’t know who to ask,” said Eads.



The Associated Press contributed to this report.



agualtieri@sedaliademocrat.com



 



Comments
comments powered by Disqus



Featured Businesses


Poll



Info Minute



Gas Prices

Sedalia Gas Prices provided by GasBuddy.com