There has been much attention dedicated to the recent discussion surrounding post-employment benefits in the Menomonie Area School District. While most of the discussion has been quite cordial, there has been some misinformation shared with parents and community members regarding the reasons behind possible changes to the structure of early retirement benefits in our school district and the collaborative process that has been followed to develop a possible solution. Here are some questions and answers that might provide a better understanding of the post employment benefit policies in Menomonie.

What is OPEB?

OPEB is an accounting acronym used when discussing “Other Post-Employment Benefits”, which are more commonly known as retirement pensions. The Menomonie Area School District, like many other organizations, has benefits available for employees after they retire. The most expensive OPEB available to some staff members in Menomonie include an annual stipend (approximately $10,000 per year) paid for five years and 100% of family health insurance premiums paid for up to ten years. The projected early retirement benefits expenses for a teacher retiring after next school year exceeds $350,000, and the latest actuarial study projects the district’s future liability for providing early retirement benefits to be more than $20 million dollars.

Why is OPEB a concern for the school district?

When employees retired in 1990, family health insurance premiums cost our school district $3,780 per year and OPEB accounted for 1% of the district’s total budget. Today, annual health insurance premiums in the school district are $24,672, and OPEB takes up over 5% of the district’s operating budget. With the cost of healthcare continually increasing at a rate much faster than the school district’s revenue, it is expected that in the upcoming years more of the district’s budget will be dedicated to post employment benefits and less revenue will be available for providing programming for our children and continuing to offer the competitive salaries and benefits needed for recruiting and retaining a highly effective staff.  

Why hasn’t the school district already addressed this issue?

The district has already taken some significant steps to reduce the OPEB liability. Just a few years ago, the district worked with employees to establish policies that would phase out defined benefits for newer employees in our school district and replace them with a more affordable defined contribution plan. The district also established a trust fund to start saving for OPEB, and over $1 million has been set aside to help pay for the benefits that have been legally vested by the staff members who have already retired.  

Why is the district looking at this issue again so soon?

Despite recent efforts, some of the benefits that are still available for future retirees are quite generous compared to what is being offered in neighboring school districts. Nearly all of the district’s OPEB liability is unfunded, and the landscape for funding public education continues to change for the worse.  While the phase-out plan will certainly help, the district is on the verge of committing millions of dollars more in retirement benefits in the next few years as more employees become eligible to retire. With the governor’s recent budget proposal calling for more significant cuts to funding for public education (over $500,000 in reduced funding projected for Menomonie in 2015-2016), it is likely that the district will need to reduce programming for children, eliminate positions, and possibly freeze or reduce compensation and benefits for current staff to be able to fund benefits for employees who retire.

Will our teachers still be able to retire if the retirement benefits are changed?

While each individual has his/her own personal financial goals and needs, all regular school district employees also qualify for state retirement and social security benefits. The amount of state retirement is determined by various factors, including age at retirement, years of service, and top earnings. For many SDMA teachers retiring soon, state retirement benefits alone could exceed $3,000/month for life, but exact benefit amounts will vary for each individual. Prior to 2011, the school district contributed both the employer’s and employee’s share of the state retirement premium. Now, after Act 10, employees are required to pay half of the required contribution, which is currently 13.6% of earnings split by the district and employee.

What are the major changes to OPEB being proposed?

No one in the district is trying to pressure employees to retire. In fact, the proposal discussed by the board encourages those currently eligible to retire to continue working. The board even extended this year’s early retirement deadline so that current teachers would not retire for fear of losing possible benefits. For those employees closest to meeting the age and local experience required for early retirement, the district is asking that they be willing to cover future increases in health insurance premiums beyond the value of the premiums at which they retire. For employees that are not as close to retiring, the school district is proposing to raise the minimum retirement age beyond 55 and consider a plan that would require future retirees to use their district retirement benefits to purchase health insurance outside of the district’s group plan. The district would also like to limit the number of employees retiring each year, so there will less fluctuation within the annual budget.

What process has be used to develop solutions for this issue?

This district has followed a very open and transparent process for dealing with this issue, and OPEB certainly is not a new concern in Menomonie. The status of the OPEB liability was just discussed at the annual meeting in August, and again in September, when the board adopted an updated financial vision for the school district. The school board discussed this issue at open meetings held on January 12, January 26, and February 9, and listening sessions were held for staff members and spouses before and after school on January 19 and February 3. Several messages have been sent to keep the staff informed, and staff input has been encouraged on multiple occasions in public large group settings and through more private communications. A shared document originally developed for sharing the details of the proposal with the staff and for answering a list of questions and answers can found: Here

We have wonderful employees in the Menomonie Area School District with whom we entrust two of our greatest assets- our children and our future. Teachers in Menomonie are well compensated compared to other school districts in Western Wisconsin, but I think that they are worth every penny that they have earned.  This issue should not be viewed as pitting the district against employees or the superintendent against teachers. Especially as we prepare to face more difficult times in funding public education, if we are going to continue to commit millions of dollars to be paid out for expenses years into the future, the commitment should be made knowing the potential impact on our programs, our children, and the future of our school district.

Should school stakeholders have any questions regarding OPEB or anything else in the Menomonie Area School District, I invite you to visit the Administrative Service Center located on Pine Avenue, or contact me at 715-232-1642. More information about our schools can be found on the school district website ( and on Twitter (