Estimated Number of Charter Schools in Operation as of September 1999, by State
Source: U.S. Department of Education, The State of Charter Schools 2000 – Fourth-Year Report, January 2000
Draft
Report Of The
Legislative Commission On Pensions And Retirement
On
The Appropriate Mechanism For
Recovering Unpaid Retirement Contributions From
Closed Charter Schools
An Interim Study
Mandated By
Special Session Laws 2001,
Chapter 10, Article 13, Section 1
February 15, 2002
Table of Contents *
Executive Summary *
Introduction *
Background Information On Minnesota Charter Schools *
1. Origin Of Charter Schools. *
2. Intent Of And Requirements For A Minnesota Charter School. *
3. The Charter School Contract. *
4. Charter School Funding. *
5. Charter School Accountability. *
Retirement Coverage For Minnesota Charter School Employers *
1. Statutory Requirements For Public Retirement Plan Coverage. *
2. Currently Closed Charter Schools And Pension Plan Membership. *
3. Currently Open Charter Schools and Pension Plan Membership. *
Unpaid Retirement Contributions from Closed Charter Schools *
1. Identification Of Closed Charter Schools. *
2. Unpaid Closed Charter School Retirement Plan Contributions. *
Potential Retirement Contribution Collection Difficulties From Open Charter Schools *
Omitted Retirement Contributions From Closed Charter Schools *
Potential Future Unpaid Or Omitted Charter School Retirement Plan Contributions *
1. Identification Of Open Charter Schools. *
2. Potential For Future Omitted Or Unpaid Charter School Retirement Contributions *
Alternative Recovery Solutions *
1. Alternative Approaches To Viewing The Problem. *
2. Potential Alternative Approaches To Solving The Current Unpaid Closed Charter School Retirement Contribution Problem. *
3. Potential Alternative Approaches to Solving the Potential Future Unpaid Charter School Retirement Contribution Problem. *
4. Summary And Policy Discussion Of Potential Remedies To The Unpaid Charter School Contribution Problem *
Commission-Recommended Recovery Solution/Solutions *
Additional Commission Recommendations *
Conclusion *
The Legislative Commission on Pensions and Retirement was directed by the 2001 Legislature to recommend a resolution for a problem related to unpaid retirement contributions by closed charter schools in a report to the 2002 Legislature.
The Commission considered the problem during the 2001-2002 Interim in three hearings and took testimony from several interested parties.
Charter schools originated in Minnesota in 1991. Public retirement plan coverage is required to be provided to charter school employees by Minnesota Statutes, Section 124D.10, Subdivision 22, with the requirement added for teachers in 1995 and added for support personnel in 1997. At least 68 charter schools currently exist in Minnesota, and 14 charter schools have closed, with three charter schools (Central Minnesota Deaf School, Dakota Open Charter School, and Frederick Douglass Charter School) having closed leaving unpaid retirement plan contributions and with one charter school (Right Step Academy) having closed leaving omitted retirement contributions for charter school employees who were inappropriately excluded from public pension plan membership. The unpaid closed charter school retirement contributions totaled $24,180.67 (principal amount) and the recognized omitted closed charter school retirement contributions totaled $195,680.27. Three public retirement plans, the Minneapolis Teachers Retirement Fund Association (MTRFA), the Teachers Retirement Association (TRA), and the Public Employees Retirement Association (PERA), have unpaid closed retirement plan contributions, with MTRFA having the largest amount due. Of the recognized omitted closed charter school retirement contributions, only PERA was involved.
With 17 percent of charter schools in Minnesota having already closed, more closures of charter schools can be expected. Many current charter schools indicate no retirement coverage for some or all of their employees, the extent of omitted charter school retirement contributions is undoubtedly much greater than the Right Step Academy, but currently undetermined.
Focusing on the problem broadly, the Commission considered 21 different potential remedies to the unpaid closed charter school retirement plan contribution situation. The Commission recommends that the Legislature enact legislation that would provide for the following:
(To be supplied based on Commission recommendation)
The Commission believes that prompt legislative attention to its recommendation(s) will resolve the unpaid closed charter school retirement contribution problem.
The 2001 Special Session of the Legislature, in Special Session Laws 2001, Chapter 10, Article 13, Section 1, mandated an interim study by the Legislative Commission on Pensions and Retirement of the appropriate mechanism for the recovery of unpaid member and employer public retirement plan contributions from charter schools that have ceased operations.
Specifically, the 2001 legislation provided the following:
(a) The legislative commission on pensions and retirement shall study and recommend the appropriate mechanism for recovering unpaid member and employer retirement plan contributions from charter schools that cease operations.
(b) The report must include the draft proposed legislation that would be required to implement the mechanism recommended by the commission.
(c) The report must be filed by February 15, 2002, with the chairs of the senate committees on state and local government operations and education and with the chairs of the house committees on governmental operations and veterans affairs policy and education.
The Commission held three hearings during which it considered the topic of unpaid closed charter school retirement plan contributions. The Commission meetings were held on October 9, 2001, December 11, 2001, and January 22, 2002. Public testimony was taken at each Commission meeting, predominantly from the administrators of the various affected pension plans.
During the course of the three hearings, the Commission considered two Commission staff issue memoranda. The meeting materials were generally available, including posting in the Internet.
Background Information On Minnesota Charter Schools
Charter schools are nonsectarian public schools of choice that operate with freedom from many of the regulations that apply to traditional public schools. The "charter" establishing each school is a performance contract detailing the school’s mission, program, goals, students served, methods of assessment, and ways to measure success. The length of time for which charters are granted varies, depending on state law. At the end of the term, the entity granting the charter may renew the school’s contract. Charter schools are accountable to their sponsor to produce positive academic results and adhere to the charter contract. The basic concept of charter schools is that they exercise increased autonomy in return for this accountability.
The charter school movement has roots in a number of other reform ideas, from alternative schools, to site-based management, to magnet schools, to public school choice, to school privatization, and to community-parental empowerment. The term "charter" may have originated in the 1970s when New England educator Ray Budde suggested that small groups of teachers be given contracts or "charters" by their local school boards to explore new approaches. Albert Shanker, the former president of the American Federation of Teachers (AFT), then publicized the idea, suggesting that local boards could charter an entire school with union and teacher approval. In the late 1980s, Philadelphia started a number of schools-within-schools and called them "charters." Some of these schools were schools of choice. The idea was further refined in Minnesota and is based on the achievement of three basic values: opportunity, choice, and responsibility for results.
In 1991, Minnesota became the first state in the nation to authorize charter schools (first called outcome-based schools). The law, Minnesota Statutes, Sections 124D.10 and 124D.11, permits teachers, parents and other community members to form and operate independent charter schools. To promote innovation, charter schools are exempt from many statutes and rules governing school districts but are held accountable for results. A Minnesota charter school is a public school and is part of the state’s public education system.
California followed suit by authorizing charter schools in 1992. By 1995, 19 states had enacted laws that allowed for the creation of charter schools, and by 1999 that number increased to include 36 states, Puerto Rico, and the District of Columbia. The Center for Educational Reform’s 1998-1999 National Charter School Directory reports that 1,205 charter schools served every grade from pre-K to adult. Of these, 58 percent were elementary schools, 20 percent were secondary schools, and 22 percent included grades at both levels. Arizona leads the nation in the number of charter schools, with nearly 350 schools currently in operation, followed by California (234), Michigan (over 175), Texas (over 150), and Florida (112). As of April 2001, the Department of Children, Families and Learning reported that there are 63 operating charter schools in Minnesota. In the 1999-2000 school year, approximately 6500 students attended charter schools, with 66 percent in elementary grades and with 34 percent in secondary grades.
Estimated Number of Charter Schools in Operation as of September 1999, by State
Source: U.S. Department of Education, The State of Charter Schools 2000 – Fourth-Year Report, January 2000
Minnesota Statutes, Sections 124D.10 and 124D.11, require that a charter school must meet one or more of the following purposes:
Improve student learning;
Increase learning opportunities for students;
Encourage the use of different and innovative teaching methods;
Require the measurement of learning outcomes and create different and innovative forms of measuring outcomes;
Establish new forms of accountability for schools; or
Create new professional opportunities for teachers, including the opportunity to be responsible for a leaning program at the school site.
Under Minnesota law, the organizers of a charter school must obtain a sponsorship from an eligible sponsor. Eligible charter school sponsors are:
- A school board;
- An intermediate school district school board;
- A federal Internal Revenue Code Section 501(c)(3) charitable organization that is a member of the Minnesota Council on Foundations, that registers with the Attorney General’s office, and that reports an end-of-year fund balance of at least $2 million;
- A Minnesota private college that grants two- or four-year degrees and that registers with the Minnesota Higher Education Services Office;
- A community college, state university, or technical college that is part of the Minnesota State Colleges and Universities system (MnSCU); and
- The University of Minnesota.
Before acting on a potential charter school charter, the sponsor must inform the public, including low-income families and communities and students of color, and how to form and operate a charter school and how to use a charter school’s offerings. A sponsor must obtain approval from the Commissioner of the Department of Children, Families and Learning (CFL) to authorize a charter school. If a school board elects not to sponsor a proposed charter school, the applicant may appeal this decision to the CFL Commissioner.
A charter school must be formed either as a cooperative corporation under Minnesota Statutes, Chapter 308A or a non-profit corporation under Minnesota Statutes, Chapter 317A. The parents of students enrolled in the school and staff employed at the school elect a board of directors in a timely manner after the school begins operation. Licensed teachers employed by the school must constitute a majority of the board unless the CFL Commissioner waives that requirement. The charter school board determines all aspects of the school’s education program, management and administration. The charter school board determines what responsibilities are maintained by the board and what responsibilities are delegated to staff or contracted to service providers. The charter school contract must include explicit pupil performance statements in the form of academic and non-academic goals and an outline of the sponsor evaluation and intervention plan (schedule of visits, services/assistance to be provided or expected, interventions to be administered if the school struggles, and criteria for not renewing the contract after it expires or revoking the contract). A charter school may be located in any school district unless the school board of the district in which the location is proposed adopts a written resolution disapproving the location. A charter school that is the only school in a town serving pupils within a particular grade level must give preference to enrolling pupils residing in the town or within two miles of the school if the next closest public school is more than five miles away before accepting pupils by lot. A charter school also must give preference to the siblings of an enrolled pupil and to a foster child of that pupil’s parents before accepting other pupils by lot.
Within 90 days of the date when the Commissioner of Children, Families and Learning approves a sponsor's proposed authorization of a charter school, the sponsor and the board of directors of the charter school must enter into a signed written contract. The contract must include the following:
- The purpose of the program;
- Pupil outcome requirements that meet or exceed the educational outcomes required of other public school students;
- Admission policies and procedures;
- School management and administration structure;
- Requirements and procedures for program and financial audits;
- Compliance with state and local requirements applicable to charter schools, the required number of days of student instruction, the provision of transportation to pupils enrolled in the charter school, and the causes for not renewing or terminating the contract;
- The liability of the charter school;
- The types and amounts of insurance the charter school will obtain;
- The contract term, which must not exceed three years; and
- The financial parameters for providing special education instruction and services, if applicable.
The charter school board of directors must obtain at least the amount and types of insurance specified in the contract and may sue and be sued.
Charter school funding from or through the State of Minnesota consists of four components:
General Education Revenue. General education revenue is paid to a charter school as though it was a school district. General education revenue is the primary source of general operating funds for school districts and charter schools. It is composed of basic general education revenue, basic skills revenue (including compensatory revenue), training and experience revenue, elementary and secondary sparsity revenue, transportation sparsity revenue, operating capital, equity revenue, transition revenue, and supplemental revenue. The Department of Children, Families and Learning makes 23 equal aid payments to a charter school during a fiscal year, except in the first year of the school’s operation when the first payment is 10 percent of the cumulative aid amount for that fiscal year followed by 22 equal payments that total 90 percent of the cumulative aid amount.
Referendum Revenue. A charter school receives the aid portion of each enrolling student’s referendum revenue based on the student’s resident district referendum amount.
Special Education Revenue. A charter school receives special education revenue as though it were a school district. In addition, a charter school may bill back to a disabled student’s resident school district any eligible unreimbursed special education costs.
Transportation Aid. Annually, a charter school must notify the Department of Children, Families and Learning if it will provide transportation for its pupils in that fiscal year. A charter school that elects to provide transportation for its pupils receives state transportation aid. If the charter school elects not to provide transportation, the school district in which the charter school is located must provide transportation within the district and may provide transportation to nonresident pupils within the pupils' resident district. A charter school is not required to provide or pay for transportation between a nonresident pupil's home and the border of the district in which the charter school is located. The school may reimburse a parent for the costs of transporting a nonresident pupil to the border of the district if the pupil's family income is at or below the federal poverty level.
Building Lease Aid. Building lease aid may be granted by the Department of Children, Families and Learning based on an application from charter schools. Building lease aid funds must be used to lease space for instructional purposes. The amount of building lease aid is now up to 90 percent of approved costs or the number of pupil units served multiplied by $1,500.
Charter School Start-Up Aid. During the first two years of a charter school’s operation, the charter school is eligible for start-up aid equal to the greater of $50,000 per charter school or the number of pupil units served multiplied by $500.
Integration Revenue. A charter school is eligible for the aid portion of integration revenue for enrolled students who are residents of a district that is eligible for integration revenue if the enrollment of the pupil in the charter school contributes to integration or desegregation purposes.
Federal Planning And Start-Up Grant Funds. Federal planning and start-up grant funds may be awarded by the Department of Children, Families and Learning, based on an application from charter schools. These funds must be used for planning or startup purposes. Charter schools are eligible to apply for up to three years of federal startup aid from the date of the approval of the charter school by the Department of Children, Families and Learning Commissioner. The aid is currently up to $140,000, $150,000, and $120,000, respectively, in the three eligible years.
Other Aid, Grants, Revenue. A charter school is eligible to receive other aids, grants, and revenue according to the school funding formulas as though it were a school district unless the receipt of the revenue would require a local property tax levy. A charter school may receive money from any source for capital facilities needs. Any unexpended capital facilities revenue must be reserved and may be expended only for future capital facilities purposes.
A charter school board of directors may not levy taxes or issue bonds.
Minnesota law requires that the sponsor of a charter school must monitor the fiscal and student pupil performance of the charter school. If at any time the charter school is not meeting expected outcomes, the sponsor must work with the charter school to implement an improvement plan. The charter school must submit an annual report to the sponsor and to the Department of Children, Families and Learning (CFL), which must include all sponsor and CFL required components. After the term of the contract or during the term, if the charter school is not meeting pupil performance expectations, fails to meet generally accepted standards of fiscal management, or is in violation of the law and the sponsor intervention is not showing results, the charter school sponsor may act to terminate the contract. If the charter school has a history of financial mismanagement or of repeated violations of the law, the Department of Children, Families and Learning may act to terminate the contract.
A sponsor and the sponsor’s employees, as well as the members of a charter school’s board of directors operating in their official capacity and the Commissioner, are immune from civil and criminal liability for sponsoring a charter school or approving charter school activities.
Retirement Coverage For Minnesota Charter School Employers
Minnesota Statutes, Section 124D.10, Subdivision 22, governs the retirement coverage for charter school employees. Minnesota Statutes, Section 124D.10, Subdivision 22, Paragraph (a), requires that teachers in a charter school be members of the Teachers Retirement Association (TRA) or of one of the first class city teacher retirement fund associations (Duluth (DTRFA), Minneapolis (MTRFA), or St. Paul (StPTRFA)). Minnesota Statutes, Section 124D.10, Subdivision 22, Paragraph (b), requires that charter school employees who are not teachers be members of the General Employees Retirement Plan of the Public Employees Retirement Association (PERA-General).
The requirement for charter school teachers to be members of a Minnesota teachers retirement plan was added in 1995 (First Special Session Laws 1995, Chapter 3, Article 9, Section 2, Subdivision 20a). The requirement for non-teaching charter school employees to be members of the Public Employees Retirement Association (PERA) was enacted in 1997 (First Special Session Laws 1997, Chapter 4, Article 5, Section 9). Neither the 1995 or the 1997 provision was considered by or recommended by the Legislative Commission on Pensions and Retirement, but appear to be policy initiatives either of the education community or of the Senate and House Education Committees.
The 1995 requirement that charter school teachers be members of a Minnesota teacher retirement plan did not specify the particular teacher retirement plan to provide coverage. The actual allocation of charter school teachers between teacher retirement plans apparently depends upon a non-statutory agreement between the four teacher pension plans, with the teachers employed by any charter school located in the city of Duluth covered by the Duluth Teachers Retirement Fund Association (DTRFA), the teachers employed by any charter school located in the city of Minneapolis covered by the Minneapolis Teachers Retirement Fund Association (MTRFA), the teachers employed by any charter school located in the city of St. Paul covered by the St. Paul Teachers Retirement Fund Association (StPTRFA), and all other charter school teachers covered by the Teachers Retirement Association (TRA).
From information provided by the Department of Children, Families and Learning (CFL), the Duluth Teachers Retirement Fund Association (DTRFA), the Minneapolis Teachers Retirement Fund Association (MTRFA), the St. Paul Teachers Retirement Fund Association (StPTRFA), and the Teachers Retirement Association (TRA), prompted by a Commission staff request, 14 charter schools have closed. The following summarizes the public retirement plan membership data for the 14 closed charter schools:
Teachers
Support Staff
Covered by:
Average
Covered
Average
Closed Charter School
TRA
DTRFA
MTRFA
StPTRFA
Salary
by PERA
Salary
Central Minnesota Deaf School
3
$6,785.42
6
$ 5,161.51
Dakota Open Charter School
6
15,157.85
1
--
Fort Snelling Academy
19
32,845.41
4
23,238.00
Frederick Douglass Charter School
11
23,750.00
0
4,783.36
Learning Adventures Middle School
--
--
--
Peaks-Faribault
--
--
--
Peaks-Pillager
--
--
--
Prairie Island Community School
--
--
--
Right Step Academy
30
30,534.00
3
--
Skills For Tomorrow
10
32,193.40
18
8,582.31
Strategies For Success
6
53,181.10
--
--
Success Academy
72
19,350.83
103
11,267.04
Summit School
5
4,209.93
26
4,641.53
Toivola-Meadowlands School
1
20,278.00
18
10,232.13
Total
25
0
30
108
$24,467.75
179
$9,964.38
Also from the information provided by CFL, DTRFA, MTRFA, StPTRFA, and TRA, there were 68 charter schools which were open during the 2000-2001 school year. The following summarizes the public retirement plan membership data for the 68 open charter schools:
Teachers
Support Staff
Covered by:
Average
Covered
Average
Open Charter School
TRA
DTRFA
MTRFA
StPTRFA
Salary
by PERA
Salary
Academia Cesar Chavez Chtr. School
--
--
ACORN Dual Lang. Comm. School
24
$33,322.20
21
$14,060.39
Agric. & Food Sciences Academy
--
--
Aurora Charter School
3
20,738.39
5
13,757.71
Bluffview Montessori Chtr. School
25
13,891.13
--
Cedar-Riverside Community School
9
26,111.84
--
City Academy
10
40,368.71
12
21,063.36
Community of Peace
47
35,279.42
36
13,909.17
Concordia Creative Learning Acad.
11
34,895.45
31
7,125.71
Coon Rapids Leaning Center
11
29,969.82
6
23,570.24
Cross Lake Community School
8
12,223.55
--
Cyber Village Academy
11
39,568.90
12
13,841.82
Duluth Edison Academies
88
24,633.00
--
E.C.H.O. Charter School
12
12,585.15
--
Eci’ Nompa Woonspe’ Chtr. School
4
40,549.29
12
8,906.56
El Colegio Charter School
3
33,333.30
--
Emily Charter School
17
11,647.87
13
9,530.55
Excell Academy
--
--
Face to Face Academy
6
30,298.25
--
Family Academy
14
19,903.06
10
5,648.45
Fort Snelling Academy
19
32,845.41
4
23,310.22
Four Directions Charter
4
43,479.31
5
12,677.38
Hanska Community School
12
8,240.80
--
Harvest Preparatory Academy
18
20,561.69
--
Heart of the Earth Ctr for Am. Indians
41
23,317.67
46
18,567.80
High School for the Recording Arts
4
35,310.48
2
29,873.26
Higher Ground Academy
25
34,825.80
78
8,697.76
HOPE Community Academy
24
29,607.25
--
La Crescent Montessori Academy
6
16,975.02
5
12,913.78
Lafayette Public Charter School
10
16,194.30
--
Lakes Area Charter School
8
17,696.31
7
7,279.03
Learning Adventures Middle School
5
38,893.46
7
11,714.61
Martin Hughes Charter 4040
20
29,780.48
27
13,776.83
Math and Science Academy
22
22,205.51
7
26,392.03
Metro Deaf School
25
34,560.92
26
9,628.73
Mexica Multicultural Education
4
27,507.30
10
7,564.01
Minnesota Business Academy
32
34,234.47
25
13,592.89
Minnesota Institute of Tech. #9130
30
30,336.62
--
Minnesota Institute of Tech. #9210
--
--
Minnesota New Country School
10
35,633.34
--
Minnesota Technology High School
5
38,725.11
13
13,268.82
Minnesota Transitions Chtr. School
32
18,763.27
39
6,721.58
Native Arts High School
5
31,429.64
--
Nerstrand Charter School
14
28,466.50
--
New Heights School
17
22,426.26
11
14,770.12
New Spirit School
30
29,736.60
13
18,856.99
New Visions School
42
25,246.92
58
10,677.34
North Lakes Academy
18
26,816.14
8
15,563.20
Odyssey Charter School
20
22,443.33
26
9,677.75
PACT Charter School
40
21,359.49
34
9,514.39
Peak’s Charter School, Duluth
7
21,621.00
5
10,730.19
Peak’s Charter School, Faribault
9
9,292.09
--
Peak’s Charter School, Pillager
7
13,372.91
--
Peak’s Charter School, St. Cloud
4
28,771.09
3
9,614.39
Pillager Area Charter School
--
--
RiverBend Academy
12
33,634.56
Riverway Learning Community
17
9,457.64
4
9,974.83
Rochester Off Campus
19
19,902.35
1
32,873.48
St. Paul Family Learning Center
13
37,691.02
47
8,910.32
Schoolcraft Learning Community
12
27,189.25
9
7,447.78
Skills for Tomorrow Sr. High Sch.
4
35,541.45
16
15,297.94
Sojourner Truth Academy
20
25,975.50
23
14,081.61
Strategies for Success
Studio Academy
9
31,800.00
Twin Cities Academy
24
34,462.61
9
9,767.22
Village School of Northfield
6
28,421.94
6
14,592.33
World Learner of Chaska
5
34,714.33
8
16,112.41
Yankton Country School
4
22,766.76
Total
392
95
196
323
$26,365.42
740
$11,667.52
Unpaid Retirement Contributions from Closed Charter Schools
The Commission staff contacted the five affected retirement plans, the Teachers Retirement Association (TRA), the General Employee Retirement Plan of the Public Employees Retirement Association (PERA-General), the Duluth Teachers Retirement Fund Association (DTRFA), the Minneapolis Teachers Retirement Fund Association (MTRFA), and the St. Paul Teachers Retirement Fund Association (StPTRFA), and the State Department of Children, Families and Learning to gain information on closed charter schools and the magnitude of any unpaid retirement plan contributions.
The five retirement plans and the Department of Children, Families and Learning were not wholly consistent in their identification of the closed charter schools and in providing other relevant information. The following compares the reported information on which charter schools have closed before September 2001, and the reported date of closure:
|
CFL |
TRA |
PERA |
|
Central Minnesota Deaf School (1/12/00) |
Central Minnesota Deaf School (7/00) |
Central Minnesota Deaf School (4/00) |
|
Dakota Open Charter School (12/18/97) |
Dakota Open School (12/97) |
|
|
Fort Snelling Academy (6/1/01) |
|
|
|
Frederick Douglass (4/7/99) |
|
Frederick Douglass (4/99) |
|
Learning Adventures Middle School (6/01) |
|
|
|
Peak’s-Faribault |
|
Peak’s Charter School, Faribault (3/01) |
|
Peak’s -Pillager |
|
Peak’s Charter School, Pillager (6/01) |
|
Prairie Island Community School (8/96) |
Prairie Island Charter School (8/96) |
|
|
Right Step Academy (8/1/00) |
|
Right Step Academy (6/00) |
|
Skills for Tomorrow Junior High |
|
Skills for Tomorrow Junior High School (6/01) |
|
Strategies for Success (5/4/01) |
|
|
|
Success Academy (5/12/00) |
|
Success Academy (9/00) |
|
Summit School for the Arts (1/00) |
Summit School for the Arts (1/00) |
Summit School for the Arts (1/00) |
|
Toivola-Meadowlands (7/1/00) |
Toivola-Meadowlands Charter School (9/00) |
Toivola-Meadowlands Charter School (7/00) |
|
CFL |
DTRFA |
MTRFA |
StPTRFA |
|
Central Minnesota Deaf School (1/12/00) |
No reported closed charter schools |
|
|
|
Dakota Open Charter School (12/18/97) |
|
|
|
|
Fort Snelling Academy (6/1/01) |
Fort Snelling Academy (7/01) |
|
|
|
Frederick Douglass (4/7/99) |
Frederick Douglass (4/99) |
|
|
|
Learning Adventures Middle School (6/01) |
|
|
|
|
Peak’s -Faribault |
|
|
|
|
Peak’s -Pillager |
|
|
|
|
Prairie Island Community School (8/96) |
|
|
|
|
Right Step Academy (8/1/00) |
|
Right Step Academy (8/00) |
|
|
Skills for Tomorrow Junior High |
|
Skills for Tomorrow Junior High School (7/01) |
|
|
Strategies for Success (5/4/01) |
|
Strategies for Success (5/01) |
|
|
Success Academy (5/12/00) |
|
Success Academy (6/00) |
|
|
Summit School for the Arts (1/00) |
|
|
|
|
Toivola-Meadowlands (7/1/00) |
|
|
There are problems with the identification of closed charter schools, with particular reference to four charter schools. The four charter schools which raise questions about their appropriate classification are:
(1) the Fort Snelling Academy;
(2) the Learning Adventures Middle School;
(3) the Peak’s Charter School, Faribault; and
(4) the Peak’s Charter School, Pillager.
Although the Department of Children, Families and Learning and the Minneapolis Teachers Retirement Fund Association (MTRFA) identified the Fort Snelling Academy as a closed charter school, both MTRFA and the Public Employees Retirement Association (PERA) identify it as an open charter school. Although CFL identified the Learning Adventures Middle School as a closed charter school, both PERA and the St. Paul Teachers Retirement Fund Association (StPTRFA) identified it as an open charter school. Additionally, although both CFL and PERA identified the Peak’s Charter School, Faribault, and the Peak’s Charter School, Pillager, as closed charter schools, TRA identified these two as open charter schools.
The five affected Minnesota retirement plans, the Duluth Teachers Retirement Fund Association (DTRFA), the Minneapolis Teachers Retirement Fund Association (MTRFA), the St. Paul Teachers Retirement Fund Association (StPTRFA), the Teachers Retirement Association (TRA), and the Public Employees Retirement Association (PERA) report that there are unpaid retirement contributions owed by closed charter schools. Three closed charter schools currently have unpaid retirement plan contributions due and owing. The principal amount of those unpaid contributions and the retirement plan or plans involved are as follows:
|
Closed Charter School |
Principal Amount of |
Total |
||
|
|
MTRFA |
PERA |
TRA |
|
|
Central Minnesota Deaf School |
|
$ 148.47 |
|
$ 148.47 |
|
Dakota Open Charter School |
|
|
411.14 |
411.14 |
|
Frederick Douglass Charter School |
$ 22,831.86 |
$ 789.20 |
|
23,621.06 |
Total Contributions Due |
$ 22,831.86 |
$ 937.67 |
$ 411.14 |
$ 24,180.67 |
There are several observations that can be made relative to the current unpaid closed charter school retirement plan contributions, as follows:
Unpaid Contributions Occurred In A Minority Of Closed Charter Schools. Only 28.6 percent of the indicated closed charter schools had unpaid retirement plan contributions. However, if the number of closed charter schools is reduced to the number of charter schools where there is no controversy or counterindication, or 10 charter schools, the percentage increases to forty percent.
Unpaid Contributions In Half The Cases Were Essentially Nominal. In two of the three total cases of closed charter schools with unpaid or omitted retirement plan contributions, the principal amount of the unpaid retirement plan contributions was essentially nominal. For both the Central Minnesota Deaf School and the Dakota Open School, involving the Teachers Retirement Association (TRA), the amount of the unpaid retirement plan contributions totaled less than $560 and appears to be no more than one payroll period amount of retirement plan contributions.
Unpaid Contributions Essentially Had A De Minimis Financial Impact. The reported unpaid member and employer contributions, without interest, have a de minimis impact on the total support of the affected retirement plans, as follows:
|
Pension Plan |
Total Unpaid Contribution Amount |
Percentage of 7/1/1999-6/30/2000 Contributions |
Percentage of 7/1/1999-6/30/2000 Covered Payroll |
|
DTRFA |
-- |
-- |
-- |
|
MTRFA |
$22,831.86 |
0.04 % |
0.009 % |
|
TRA |
559.61 |
0.0002 |
0.00002 |
|
PERA |
789.20 |
0.0002 |
0.00002 |
Detail on the unpaid contribution amounts is set forth in Attachment C (MTRFA), Attachment D (StPTRFA), Attachment E (TRA), and Attachment F (PERA).
- Amount Of Unpaid Contributions Predominantly Involved MTRFA. When assessed by the amount of the unpaid retirement plan contributions, their occurrence predominated in the Minneapolis Teachers Retirement Fund Association (MTRFA) and not in the statewide teacher retirement plan involved, the Teachers Retirement Association (TRA). The following compares the percentage of the total unpaid retirement plan contribution amount attributable to each affected retirement plan:
Plan
Amount
Percentage
MTRFA
$22,831.86
94.42%
PERA-Unpaid
789.20
3.26
TRA
559.61
2.31
Total
$24,180.67
100.0%
Only One Closed Charter Involved More Than One Retirement Plan. In only one case, the Frederick Douglass Charter School, were there unpaid retirement plan contributions to two pension plans. The amount of retirement contributions from the Frederick Douglass Charter School that were not paid to PERA was significantly smaller ($789.20 compared to $22,831.86) than the amount not paid to MTRFA.
Current Unpaid Contributions By Closed Charter Schools Indicate An MTRFA Contribution Collection Problem. The unpaid contributions from the closed charter school with significant unpaid contribution amounts, the Frederick Douglass Charter School, were likely unpaid for a significant period of time, indicating that the affected retirement plan, the Minneapolis Teachers Retirement Fund Association (MTRFA), either was inattentive to its own contribution collection procedures or was unsuccessful in pursuing existing collection options. For the Frederick Douglass Charter School and MTRFA, from the information on the number of teachers and average teaching salaries reported, the unpaid contributions approach two-thirds of a year of contributions.
Reported Information Is Incomplete Or Conflicting. In some cases with the affected charter schools, the information reported by the Department of Children, Families and Learning and by the affected pension plan(s), the information is incomplete or conflicting. For instance, for the Frederick Douglass Charter School, there is insufficient data on support staff personnel to fully evaluate the unpaid PERA contributions.
Potential Retirement Contribution Collection Difficulties From Open Charter Schools
For the 2000-2001 school year, 1,018 teachers and 773 support staff in open charter schools were covered by Minnesota public pension plans, involving $4.5 million in annual contributions. The following sets forth the breakdown of those numbers, organized by retirement plan:
|
Public Retirement Plan |
Number of Charter Schools Reporting |
Number of Teachers/ Support Employees |
Total Employee Contributions |
Total Employer Contributions |
Total Contributions |
|
DTRFA |
2 |
95 |
$ 127,547.80 |
$ 134,273.05 |
$ 261,820.85 |
|
MTRFA |
11 |
196 |
267,233.45 |
395,505.50 |
622,738.95 |
|
StPTRFA |
20 |
334 |
621,720.40 |
942,754.20 |
1,564,474.60 |
|
TRA |
32 |
393 |
417,907.43 |
417,907.43 |
835,814.86 |
|
PERA |
44 |
773 |
428,402.25 |
467,183.93 |
895,586.18 |
|
Total |
|
1,791 |
$2,162,811.33 |
$2,357,624.11 |
$4,520,435.44 |
Specific information on the five public retirement plans and the open charter schools to which they provide retirement coverage is available in five attachment items (Attachment G, Duluth Teachers Retirement Fund Association (DTRFA); Attachment H, Minneapolis Teachers Retirement Fund Association (MTRFA); Attachment I, St. Paul Teachers Retirement Fund Association (StPTRFA); Attachment J, Teachers Retirement Association (TRA), and Attachment K, Public Employees Retirement Association (PERA)).
The open charter school member and employer retirement plan contributions constitute various proportions of total retirement plan member and employer contributions, as indicated in the following:
|
Retirement Plan |
No. of Charter School Members |
Charter School Average Salary |
Retirement Plan Average Salary1 |
Ret. Plan Average Salary |
Ret. Plan Average Salary |
Total Charter School Member Contr. |
% Total Plan Member Contr.2 |
Total Charter School Employer Contr. |
% Total Plan Employer Contr.2 |
|
DTRFA |
95 |
$24,411.06 |
$38,785.68 |
$19,128.66 |
$57,041.35 |
$127,547.80 |
4.15% |
$134,273.05 |
4.15% |
|
MTRFA |
196 |
24,789.75 |
46,436.25 |
28,520.24 |
71,558.56 |
267,233.45 |
1.63 |
395,505.50 |
1.65 |
|
StPTRFA |
334 |
33,844.33 |
44,502.86 |
28,399.03 |
69,019.10 |
621,720.40 |
4.91 |
942,754.20 |
4.97 |
|
TRA |
393 |
21,267.55 |
41,901.30 |
23,808.22 |
57,302.16 |
417,907.43 |
0.28 |
417,907.43 |
0.28 |
|
PERA |
773 |
11,667.52 |
27,905.85 |
17,533.91 |
43,831.37 |
428,402.25 |
0.24 |
467,183.93 |
0.24 |
1
Salary figures have been projected for the 2000-2001 school year from the July 1, 2000 actuarial valuation figures by 5.25% for DTRFA, 5.00% for MTRFA, 5.25% for StPTRFA, 5.00% for TRA, and 5.00% for PERA, which are the bottom end of the range of assumed salary increases for the plans.2
The gross July 1, 2000, contributions were adjusted by the same percentage as applicable in note 1.There are several observations that deserve to be presented relative to the situation of open charter school retirement plan coverage and retirement plan contributions. These observations are as follows:
Potential For Omitted Coverage: Charter Schools Without PERA Coverage. Of the 68 open charter schools, 20 charter schools have teachers with retirement coverage by either the Teachers Retirement Association (TRA) or first class city teacher retirement fund associations, but lack any support staff with Public Employees Retirement Association (PERA) retirement coverage. This raises the question of whether or not all the public employees who are eligible for public retirement plan coverage have PERA coverage. If some individuals should be PERA members, but are not, as was the case with the closed Right Step Academy, this would understate the amount of ongoing retirement contributions and may give rise to omitted retirement coverage or service credit purchase problems in the future. The affected charter schools are:
Bluffview Montessori Charter School (Winona School District)
Cedar-Riverside Community School (Special School District No. 1 (Minneapolis))
Cross Lake Community School (Minnesota State Board of Education)
Duluth Edison Academies (Duluth School District)
E.C.H.O. Charter School (Yellow Medicine East School District)
El Colegio Charter School (Augsburg College)
Face to Face Academy (Independent School District No. 625 (St. Paul))
Hanska Community School (New Ulm School District)
Harvest Preparatory Academy (Special School District No. 1 (Minneapolis))
HOPE Community Academy (St. Thomas University)
Minnesota Institute of Technology 9210 (University of St. Thomas)
Minnesota Institute of Technology 9130 (University of St. Thomas)
Minnesota New Country School (LeSueur/Henderson School District)
Nerstrand Charter School (Faribault School District)
Peak’s Charter School, Faribault (Central Lakes College)
Peak’s Charter School, Pillager (Central Lakes College)
RiverBend Academy (Minnesota State Board of Education)
Studio Academy (College of Visual Arts)
Yankton Country School (Balaton School District)
|
Charter Schools Omitted From CFL Website |
Charter Schools Newly Included in CFL Website |
|
Fort Snelling Academy |
Avalon School (St. Mary’s College) |
|
Learning Adventures Middle School |
Blue Sky Charter School (Brooklyn Center School Dist.) |
|
Peak’s Charter School, Faribault |
Friendship Academy of Fine Arts (Special School District No. 1 (Mpls.)) (N) |
|
Peak’s Charter School, Pillager |
Great River Educational Center (Central Lakes College) |
|
Peak’s Charter School, St. Cloud |
Harbor City International School (Volunteers of America) (N) |
|
Strategies for Success |
MN Academy of Software Technology (St. Paul Technical College) (N) |
|
|
MN International Middle School (Century College) (N) |
|
|
Twin City International Elementary School (Century College) (N) |
|
|
WISE Charter School (YMCA, Minneapolis) (N) |
(N)
Indicates charter school opening Fall 2001 or Fall 2002ACORN Dual Language Community Academy (Ind. School District No. 625 (St. Paul))
City Academy (College of St. Catherine)
Community of Peace (Independent School District No. 625 (St. Paul))
Concordia Creative Learning Academy (Concordia University)
Cyber Village Academy (Special School District No.1 (Minneapolis))
Eci’ Nompa Woonspe’ Charter School (Redwood Falls School District)
Emily Charter School (Minnesota State Board of Education)
Heart of the Earth Center for the American Indian Education (Special School Dist. No.1 (Mpls.))
Higher Ground (Independent School District No. 625 (St. Paul))
Learning Adventures Middle School (Central Lakes College)
Martin Hughes Charter 4040 (Mountain Iron-Buhl School Board)
Metro Deaf School (Forest Lake School District)
Minnesota Business Academy (Independent School District No. 625 (St. Paul))
Minnesota Technology High School (Inver Hills Community College)
Minnesota Transitions Charter School (Special School District No. 1 (Minneapolis))
New Visions School (Special School District No. 1 (Minneapolis))
Odyssey Charter School (Osseo School District)
PACT Charter School (Anoka-Hennepin School District)
Skills for Tomorrow Senior High School (Rockford School District)
Sojourner Truth Academy (Special School District No. 1 (Minneapolis))
St. Paul Family Learning Center (Independent School District No. 625 (St. Paul))
World Learner of Chaska (Chaska School District)
Additionally, six open charter school results indicate large support staff personnel average salaries in comparison with the average salaries paid to teachers employed by the same charter school. Since this differs from the general pattern, this raises questions about the accuracy of the data. The following indicates the six charter schools with unusually large support staff personnel average salaries, with the sponsoring entity indicated in parentheses:
Coon Rapids Learning Center (Bethel College)
Fort Snelling Academy (Normandale College)
Heart of the Earth Center (Special School District No. 1. (Minneapolis))
High School for the Recording Arts (Independent School District No. 625 (St. Paul))
Math and Science Academy (Minnesota State Board of Education)
Rochester Off Campus School (Rochester Community and Technical College)
Omitted Retirement Contributions From Closed Charter Schools
Additionally, one closed charter school has been identified as never having included its non-teaching employees in retirement coverage by the General Employees Retirement Plan of the Public Employees Retirement Association (PERA-General), although those employees were required by Minnesota Statutes, Chapter 353, to become PERA-General members. The following indicates the closed charter school and the estimated amount of the omitted retirement plan contributions that should have been made had the eligible employees been retirement plan members:
|
Closed Charter School |
Estimated Retirement Contributions Involved |
Total |
|
|
|
Member Contrib. |
Employer Contrib. |
|
|
Right Step Academy |
$93,796.57 |
$101,883.70 |
$195,680.27 |
There are several observations that can be made relative to the current recognized omitted retirement plan contributions, as follows:
|
No Indicated Teacher Plan |
No Indicated Support Personnel Plan |
|
Learning Adventures Middle School |
Dakota Open Charter School |
|
Peaks-Faribault |
Learning Adventures Middle School |
|
Peaks-Pillager |
Prairie Island Community School |
|
|
Strategies For Success |
Current Omitted Contributions By Closed Charter Schools Indicate A PERA Membership Exclusion Checking Problem. The omitted contributions from the closed charter school with significant omitted contribution amounts, the Right Step Academy, likely represent a very long period for which support personnel were not reported as members of the General Employees Retirement Plan of the Public Employees Retirement Association (PERA-General). The omitted contribution amounts were estimated by PERA from information provided by the St. Paul Teachers Retirement Fund Association (StPTRFA). PERA has substantial statutory requirements to check for public employees who are potentially inappropriately excluded from PERA membership and has the power to conduct field audits to gain or verify information. PERA indicated that the Right Step Academy never reported its support personnel for PERA membership, but has not explained why it was unable to obtain the necessary employment status information. The magnitude of the omitted contributions either indicates a large support personnel workforce, a very long period of omitted contributions, or a very significant support personnel average salary.
Reported Information Is Incomplete Or Conflicting. In some cases with the affected charter schools, the information reported by the Department of Children, Families and Learning and by the affected pension plan(s), the information is incomplete or conflicting. For instance, for the Right Step Academy, there is no information provided by the Department of Children, Families and Learning on the number or average salary of support personnel to allow for an analysis of the reported omitted PERA contributions.
Potential Future Unpaid Or Omitted Charter School Retirement Plan Contributions
There are 68 charter schools which have been identified by either the Department of Children, Families and Learning and/or one or more Minnesota public retirement plan as being open charter schools. The following sets forth a list of the 68 schools, organized alphabetically, and indicates the charter school sponsor:
Academia Cesar Chavez Charter School (University of St. Thomas)
ACORN Dual Language Community Academy (Ind. School Dist. No. 625 (St. Paul))
Agricultural and Food Sciences Academy (NE Metro Intermediate District No. 916)
Aurora Charter School (St. Mary’s University)
Bluffview Montessori Charter School (Winona School District)
Cedar-Riverside Community School (Special School District No. 1 (Minneapolis))
City Academy (College of St. Catherine)
Community of Peace (Independent School District No. 625 (St. Paul))
Concordia Creative Learning Academy (Concordia University)
Coon Rapids Learning Center (Bethel College)
Cross Lake Community School (Minnesota State Board of Education)
Cyber Village Academy (Special School District No. 1 (Minneapolis))
Duluth Edison Academies (Duluth School District)
E.C.H.O. Charter School (Yellow Medicine East School District)
Eci’ Nompa Woonspe’ Charter School (Redwood Falls School District)
El Colegio Charter School (Augsburg College)
Emily Charter School (Minnesota State Board of Education)
Excell Academy (North Central University)
Face to Face Academy (Independent School District No. 625 (St. Paul))
Family Academy (NE Metro Intermediate School District 916)
Fort Snelling Academy (Normandale College)
Four Directions Charter (Metropolitan State University)
Hanska Community School (New Ulm School District)
Harvest Preparatory Academy (Special School District No. 1 (Minneapolis))
Heart of the Earth Center for the American Indian Education (Special School Dist. No. 1 (Mpls.))
High School for the Recording Arts (Independent School District No. 625 (St. Paul))
Higher Ground (Independent School District No. 625 (St. Paul))
Hope Community Academy (St. Thomas University)
La Crescent Montessori Academy (Minnesota State Board of Education)
Lafayette Public Charter School (New Ulm School Board)
Lakes Area Charter School (Alexandria Technical College)
Learning Adventures Middle School (Central Lakes College)
Martin Hughes Charter 4040 (Mountain Iron-Buhl School Board)
Math and Science Academy (Minnesota State Board of Education)
Metro Deaf School (Forest Lake School District)
Mexica Multicultural Education (Independent School District No. 625 (St. Paul))
Minnesota Business Academy (Independent School District No. 625 (St. Paul))
Minnesota Institute of Technology 9210 (University of St. Thomas)
Minnesota Institute of Technology 9130 (University of St. Thomas)
Minnesota New Country School (LeSueur/Henderson School District)
Minnesota Technology High School (Inver Hills Community College)
Minnesota Transitions Charter School (Special School District No. 1 (Minneapolis))
Native Arts High School (Augsburg College)
Nerstrand Charter School (Faribault School District)
New Heights School (Stillwater School District)
New Spirit School (Independent School District No. 625 (St. Paul))
New Visions School (Special School District No. 1 (Minneapolis))
North Lakes Academy (Minnesota State Board of Education)
Odyssey Charter School (Osseo School District)
PACT Charter School (Anoka-Hennepin School District)
Peak’s Charter School, Duluth (Central Lakes Community College)
Peak’s Charter School, Faribault (Central Lakes College)
Peak’s Charter School, Pillager (Central Lakes College)
Peak’s Charter School, St. Cloud (Central Lakes Community College)
Pillager Area Charter School (Central Lakes Community College)
RiverBend Academy (Minnesota State Board of Education)
Riverway Learning Community (Rochester Community and Technical College)
Rochester Off Campus (Rochester Community and Technical College)
Schoolcraft Learning Community (Minnesota State Board of Education)
Skills for Tomorrow Senior High School (Rockford School District)
Sojourner Truth Academy (Special School District No. 1 (Minneapolis))
St. Paul Family Learning Center (Independent School District No. 625 (St. Paul))
Strategies for Success (Independent School District No. 625 (St. Paul))
Studio Academy (College of Visual Arts)
Twin Cities Academy (Independent School District No. 625 (St. Paul))
Village School of Northfield (Northfield School District)
World Learner of Chaska (Chaska School District)
Yankton Country Schools (Balaton School District)
There are 34 sponsoring entities for the 68 open charter schools, involving 27 public sector entities and seven private institutions of higher education.
There are problems with the identification of open charter schools. The five retirement plans and the Department of Children, Families and Learning have identified 68 open Minnesota charter schools, but no respondent identified all 68 schools.
The charter schools which raise questions about their appropriate classification as an open charter school because they were reported by one or more of the retirement plans, but were not identified by the Department of Children, Families and Learning (CFL) are:
(1) the Fort Snelling Academy;
(2) the Learning Adventures Middle School;
(3) the Peak’s Charter School-Faribault;
(4) the Peak’s Charter School-Pillager; and
(5) the Strategies for Success Charter.
Although the Department of Children, Families and Learning and the Minneapolis Teachers Retirement Fund Association (MTRFA) identified the Fort Snelling Academy as a closed charter school, MTRFA also identified it as an open charter school, as did the Public Employees Retirement Association (PERA). Additionally, although both CFL and PERA identified the Peak’s Charter School, Faribault, and the Peak’s Charter School, Pillager, as closed charter schools, Teachers Retirement Association (TRA) identified these two as open charter schools. The St. Paul Teachers Retirement Fund Association (StPTRFA) identified the Learning Adventures Middle School as an open charter school, while CFL did not. The Public Employees Retirement Association (PERA) indicated that the Strategies For Success School is an open charter school, with eligibility for PERA coverage pending, but CFL did not identify it as an open charter school.
The five affected Minnesota retirement plans, the Duluth Teachers Retirement Fund Association (DTRFA), the Minneapolis Teachers Retirement Fund Association (MTRFA), the St. Paul Teachers Retirement Fund Association (StPTRFA), the Teachers Retirement Association (TRA), and the Public Employees Retirement Association (PERA) all receive member and employer contributions. The magnitude of those contributions vary, as follows:
Duluth Teachers Retirement Fund Association (DTRFA)
2000 School Year
2001 School Year
Charter School
Teacher Number
Member Contrib.
Employer Contrib.
Teacher Number
Member Contrib.
Employer Contrib.
Duluth Edison Academies
82
120,678.58
127,041.63
88
119,223.72
125,510.06
Peak’s Charter School, Duluth
6
5,089.59
5,357.95
7
8,324.08
8,762.99
Total
88
125,768.17
132,399.58
95
127,547.80
134,273.05
Minneapolis Teachers Retirement Fund Association (MTRFA)
2000 School Year
2001 School Year
Charter School
Teacher Number
Member Contrib.
Employer Contrib.
Teacher Number
Member Contrib.
Employer Contrib.
Aurora Charter School
3
0.00
0.00
3
3,421.83
5,064.31
Cedar-Riverside Community School
9
15,325.47
22,681.69
9
12,925.36
19,129.53
El Colegio Charter School
6
0.00
0.00
3
5,499.99
8,139.99
Fort Snelling Academy
0
0.00
0.00
19
34,323.45
50,798.71
Four Directions Charter School
5
6,981.54
10,332.69
4
9,565.44
14,156.86
Harvest Preparatory Academy
0
15,087.74
22,329.85
18
20,356.07
30,126.98
Heart of the Earth Ctr for Am. Indians
0
31,750.42
46,990.62
41
52,581.34
77,820.39
Minnesota Transitions Charter
0
26,228.66
38,818.42
32
33,023.35
48,874.56
Native Arts High School
4
0.00
0.00
5
8,643.15
12,791.86
New Visions School
0
39,543.11
58,523.81
42
58,320.38
86,314.17
Sojourner Truth Academy
18
14,557.28
21,544.78
20
28,573.05
42,288.11
Total
45
149,474.22
221,221.86
196
267,233.41
395,505.47
St. Paul Teachers Retirement Fund Association (StPTRFA)
2000 School Year
2001 School Year
Charter School
Teacher Number
Member Contrib.
Employer Contrib.
Teacher Number
Member Contrib.
Employer Contrib.
ACORN Dual Lang. Comm. Academy
21
35,477.48
53,796.77
24
43,985.30
66,697.71
City Academy
8
17,160.89
26,022.16
10
22,202.79
33,667.50
Community of Peace
42
81,610.03
123,750.49
47
91,197.30
138,288.27
Concordia Creative Learning Acad.
3
4,718.27
7,154.61
11
21,111.74
32,013.08
Concordia Early Learning School
0
0.00
0.00
0
0.00
0.00
Cyber Village Academy
6
12,474.84
18,916.39
11
23,939.18
36,300.50
Fact to Face Academy
6
8,523.11
12,924.13
6
9,998.42
15,161.24
High School for Recording Arts
3
5,254.07
7,967.08
4
7,768.30
11,779.57
Higher Ground
22
35,822.53
54,319.98
25
47,885.47
72,611.79
HOPE Community Academy
0
0.00
0.00
24
39,081.57
59,261.87
Learning Adventures Middle School
3
7,388.88
11,204.23
5
10,695.70
16,218.57
Metro Deaf School
19
37,412.14
56,730.42
25
47,521.26
72,059.51
Mexica Multicultural Education
0
0.00
0.00
4
6,051.60
9,176.43
Minnesota Business Academy
0
0.00
0.00
32
60,252.66
91,364.95
Minnesota Institute of Technology
0
0.00
0.00
30
50,055.42
75,902.22
Minnesota Technology High School
7
18,260.88
27,690.13
5
10,649.40
16,148.37
New Spirit School
19
27,369.17
41,501.62
30
49,065.39
74,400.97
Skills for Tomorrow Senior High
3
6,418.36
9,732.57
4
7,819.11
11,856.62
St. Paul Family Learning Center
10
19,636.73
29,776.43
13
26,949.07
40,864.60
Twin Cities Academy
16
30,684.57
46,528.96
24
45,490.64
68,980.36
Total
188
348,211.95
528,015.97
334
621,720.32
942,754.13
Teachers Retirement Association (TRA)
2000 School Year
2001 School Year
Charter School
Teacher Number
Member Contrib.
Employer Contrib.
Teacher Number
Member Contrib.
Employer Contrib.
Agricul. & Food Sciences Academy
0
0.00
0.00
0
0.00
0.00
Bluffview Montessori Charter School
23
15,812.47
15,812.47
25
17,363.91
17,363.91
Coon Rapids Learning Center
7
9,864.44
9,864.44
11
16,483.40
16,483.40
Cross Lake Community School
0
0.00
0.00
8
4,889.42
4,889.42
E.C.H.O. Charter School
9
5,512.07
5,512.07
12
7,551.09
7,551.09
Eci’ Nompa Woonspe’ Charter School
4
5,971.43
5,971.43
4
8,109.85
8,109.85
Emily Charter School
18
12,780.48
12,780.48
17
9,900.68
9,900.68
Family Academy
0
0.00
0.00
14
13,932.14
13,932.14
Hanska Community School
7
4,759.75
4,759.75
12
4,944.48
4,944.48
La Crescent Montessori Academy
4
2,400.36
2,400.36
6
5,092.50
5,092.50
Lafayette Public Charter School
8
4,619.82
4,619.82
10
8,097.15
8,097.15
Lakes Area Charter School
5
5,182.11
5,182.11
8
7,078.52
7,078.52
Martin Hughes Charter School
17
16,438.35
16,438.35
20
29,780.48
29,780.49
Math & Science Academy
14
18,062.17
18,062.17
22
24,426.06
24,426.06
Nerstrand Charter School
13
16,468.50
16,468.50
14
19,926.55
19,926.55
New Country School
10
17,197.08
17,197.08
10
17,816.67
17,816.67
New Heights School
22
17,533.95
17,533.95
17
19,062.32
19,062.32
North Lakes Academy
15
13,303.59
13,303.59
18
24,134.52
24,134.52
Odyssey Charter School
17
18,180.81
18,180.81
20
22,443.33
22,443.33
PACT Charter School
39
36,190.08
36,190.08
40
42,718.98
42,718.98
Peak’s Charter School, Faribault
5
4,930.63
4,930.63
9
4,181.44
4,181.44
Peak’s Charter School, Pillager
8
6,252.39
6,252.39
7
4,680.51
4,680.51
Peak’s Charter School, St. Cloud
1
666.67
666.67
4
5,754.21
5,754.21
RiverBend Academy
1
706.50
706.50
12
20,180.73
20,180.73
Riverway Learning Community
0
0.00
0.00
17
8,038.99
8,038.99
Rochester Off Campus
11
10,517.31
10,517.31
19
18,907.23
18,907.23
Schoolcraft Learning Community
0
0.00
0.00
12
16,313.55
16,313.55
Studio Academy
0
0.00
0.00
9
14,310.00
14,310.00
Toivola-Meadowlands Charter School
12
9,183.09
9,183.09
1
30.14
30.14
Village School of Northfield
7
5,777.22
5,777.22
6
8,526.58
8,526.58
World Learner of Chaska
7
8,668.24
8,668.24
5
8,678.58
8,678.58
Yankton Country School
0
0.00
0.00
4
4,553.35
4,553.35
Total
284
266979.51
266979.51
393
417907.36
417907.37
Public Employees Retirement Association (PERA)
2000 School Year
2001 School Year
Charter School
Support Staff No.
Member Contrib.
Employer Contrib.
Support Staff No.
Member Contrib.
Employer Contrib.
Academia Cesar Chavez Charter School
0
0.00
0.00
0
0.00
0.00
ACORN Dual Language Comm. Acad.
20
13,358.04
14,567.29
21
14,025.23
15,294.89
Agric. and Food Sciences Academy
0
0.00
0.00
0
0.00
0.00
Aurora Charter School
0
0.00
0.00
5
3,267.45
3,563.24
Bluffview Montessori Charter School
0
0.00
0.00
0
0.00
0.00
Cedar-Riverside Community School
0
0.00
0.00
0
0.00
0.00
Central Minnesota Deaf School
0
0.00
0.00
0
0.00
0.00
City Academy
12
13,073.61
14,257.12
12
12,006.11
13,092.98
Community of Peace
31
15,503.80
16,907.30
36
23,784.68
25,937.82
Concordia Creative Learning Academy
25
10,941.16
11,931.62
31
10,492.60
11,442.46
Concordia Early Learning School
25
10,941.16
11,931.62
31
10,492.60
11,442.46
Coon Rapids Learning Center
2
3,645.45
3,975.46
6
6,717.51
7,325.63
Cross Lake Community School
0
0.00
0.00
2
981.56
1,070.42
Cyber Village Academy
9
5,071.42
5,530.52
12
7,889.83
8,604.07
Duluth Edison Academies
0
0.00
0.00
0
0.00
0.00
E.C.H.O. Charter School
0
0.00
0.00
0
0.00
0.00
Eci’ Nompa Woonspe’ Charter School
12
4,316.85
4,707.64
12
5,076.73
5,536.31
El Colegio Charter School
0
0.00
0.00
0
0.00
0.00
Emily Charter School
10
4,367.58
4,762.96
13
5,885.11
6,417.87
Excell Academy
0
0.00
0.00
0
0.00
0.00
Face to Face Academy
0
0.00
0.00
0
0.00
0.00
Family Academy
0
0.00
0.00
10
2,683.01
2,925.89
Fort Snelling Academy
0
0.00
0.00
4
4,428.94
4,829.87
Four Directions Charter
2
1,825.89
1,991.18
5
3,010.87
3,283.44
Hanska Community School
0
0.00
0.00
0
0.00
0.00
Harvest Preparatory Academy
0
0.00
0.00
0
0.00
0.00
Heart of the Earth Ctr for Am. Indians
26
9,314.77
10,158.01
46
40,570.64
44,243.35
High School for the Recording Arts
0
0.00
1.11
2
2,837.95
3,094.86
Higher Ground
33
18,161.41
19,805.50
78
32,225.20
35,142.42
Hope Community Academy
0
0.00
0.00
0
0.00
0.00
Kenwood Primary/El. Academy
0
0.00
0.00
0
0.00
0.00
La Crescent Montessori Academy
3
1,910.97
2,083.96
5
3,067.02
3,344.66
Lafayette Public Charter School
0
0.00
0.00
0
0.00
0.00
Lakes Area Charter School
5
3,066.59
3,344.19
7
2,420.27
2,639.37
Learning Adventures Middle School
8
5,498.81
5,996.60
7
3,895.10
4,247.71
Martin Hughes Charter 4040
15
7,311.17
7,973.03
27
17,668.78
19,268.27
Math and Science Academy
3
2,530.20
2,759.25
7
8,775.34
9,569.75
Metro Deaf School
16
9,381.21
10,230.45
26
11,891.48
12,967.97
Mexica Multicultural Education
0
0.00
0.00
10
3,592.90
3,918.15
Minnesota Business Academy
0
0.00
0.00
25
16,141.55
17,602.79
Minnesota Institute of Technology
0
0.00
0.00
0
0.00
0.00
Minnesota Technology High School
13
9,163.73
9,993.29
13
8,193.49
8,935.22
Minnesota Transitions Charter School
25
15,676.54
17,095.68
39
12,451.72
13,578.93
Minnesota Institute Targeted Services
0
0.00
0.00
0
0.00
0.00
Native Arts High School
0
0.00
0.00
0
0.00
0.00
Nerstrand Charter School
0
0.00
0.00
0
0.00
0.00
New Country School
0
0.00
0.00
0
0.00
0.00
New Heights School
10
5,213.99
5,682.99
11
7,717.38
8,416.01
New Spirit School
11
9,762.28
10,646.02
13
11,644.19
12,698.29
New Visions School
53
24,293.92
26,493.16
58
29,416.07
32,079.00
North Lakes Academy
6
3,677.59
4,010.51
8
5,914.01
6,449.39
Odyssey Charter School
22
8,269.70
9,018.32
26
11,952.02
13,033.99
Opportunities for Learning
0
0.00
0.00
0
0.00
0.00
PACT Charter School
33
10,620.92
11,582.39
34
15,365.73
16,756.74
Peak’s Charter School, Alexandria
0
0.00
0.00
0
0.00
0.00
Peak’s Charter School, Duluth
5
2,484.64
2,709.56
5
2,548.42
2,779.11
Peak’s Charter School, Faribault
0
0.00
0.00
0
0.00
0.00
Peak’s Charter School, Pillager
0
0.00
0.00
0
0.00
0.00
Peak’s Charter School, St. Cloud
0
0.00
0.00
3
1,370.05
1,494.07
Pillager Area Charter School
0
0.00
0.00
0
0.00
0.00
Raleigh Primary/El. Academy
0
0.00
0.00
0
0.00
0.00
Right Step Academy El.
0
0.00
0.00
0
0.00
0.00
River Bend Academy
0
0.00
0.00
0
0.00
0.00
Riverway Learning Community
0
0.00
0.00
4
1,895.21
2,066.78
Rochester Off Campus
0
0.00
0.00
1
1,561.49
1,702.84
Schoolcraft Learning Community
0
0.00
0.00
9
3,183.92
3,472.15
Skills for Tomorrow Jr. High School
0
0.00
0.00
0
0.00
0.00
Skills for Tomorrow Sr. High School
9
15,193.96
16,569.42
16
11,626.43
12,678.93
Sojourner Truth Academy
12
7,782.26
8,486.76
23
15,384.15
16,776.83
St. Paul Family Learning Center
34
16,822.88
18,345.80
47
19,892.28
21,693.06
Strategies for Success
0
0.00
0.00
0
0.00
0.00
Studio Academy
0
0.00
0.00
0
0.00
0.00
Success Academy
0
0.00
0.00
0
0.00
0.00
Summit School for the Arts
0
0.00
0.00
0
0.00
0.00
Toivola-Meadowlands Charter School
0
0.00
0.00
0
0.00
0.00
Twin Cities Academy
9
3,490.44
3,806.42
9
4,175.48
4,553.47
Village School of Northfield
7
7,544.23
8,227.18
6
4,158.81
4,535.29
Washburn Jr. Academy
0
0.00
0.00
0
0.00
0.00
World Learner of Chaska
7
3,695.67
4,030.23
8
6,122.71
6,676.98
Yankton Country Schools
0
0.00
0.00
0
0.00
0.00
Total
513
283,912.84
309,612.54
773
428,402.02
467,183.70
The following sets forth the magnitude of the charter school membership and contributions in proportion to the total membership and contributions of the respective retirement plans for the 2000 and 2001 fiscal years:
Number of Members
Member Contributions
Employer Contributions
Retirement Plan
Fiscal Year
Charter Schools
Total
%
Charter Schools
Total
%
Charter Schools
Total
%
DTRFA
2000
88
1,441
6.1
125,768
3,152,000
4.0
132,400
3,026,000
4.4
2001
95
1,420
6.7
127,548
3,041,000
4.1
134,273
3,011,000
4.5
MTRFA
2000
45
5,777
0.8
149,474
16,169,000
0.9
221,222
21,938,000
1.0
2001
196
5,813
3.4
267,233
16,321,000
1.6
395,506
22,029,000
1.8
StPTRFA
2000
188
4,445
4.2
348,212
13,184,000
2.6
528,016
19,049,000
2.8
2001
334
4,671
7.2
621,720
13,170,000
4.7
942,754
19,996,000
4.7
TRA
2000
284
70,508
0.4
266,980
138,696,000
0.2
266,980
134,419,000
0.2
2001
393
71,097
0.6
417,907
145,075,000
0.3
417,907
139,799,000
0.3
PERA
2000
513
135,560
0.4
283,913
171,073,000
0.2
428,402
186,637,000
0.2
2001
773
138,759
0.6
309,615
173,380,000
0.2
467,184
188,208,000
0.2
Alternative Recovery Solutions
In considering the problem of the recovery of unpaid closed charter school contributions, the Commission attempted to sort through potential solutions by focusing on the available approaches to viewing the problem. The problem depends on the timeframe (past, for currently closed charter schools, and future, for current open charter schools which may eventually closed and for charter schools yet to be formed) and on the type of contribution (contributions due and owing, but unpaid, and contributions that are omitted because charter school teachers and support personnel have not properly been accorded public retirement plan coverage required by statute).
The following chart summarizes the approaches considered by the Commission to view the unpaid closed charter school retirement contribution recovery problem:
|
|
Timeframe |
|
|
|
Closed |
Open |
|
Contribution Type |
Accrued $24, 180.67 plus interest owed to MTRFA, PERA-General, and TRA from three closed charter schools (Central Minnesota Deaf, Dakota Open, and Frederick Douglass) |
Accruing Unknown and unestimable, but at least 16 charter schools have closed since the first Minnesota charter school was established in 1991 |
|
Omitted At least $195,680.27 (amount estimated to be owed to PERA-General from Right Step Academy), but three closed charter schools reported no teacher retirement plan for their teachers and four closed charter schools reported no support employee pension plan |
Omitted Unknown and unestimable, but 20 open charter schools report providing teacher pension coverage and no support personnel pension coverage, three charter schools not otherwise reported, but on the CFL website indicate no teacher or support personnel pension coverage, 22 charter schools report a large support staff and only a few teachers, and six charter schools report a large average support staff salary, but a smaller average teacher salary |
|
The Commission staff reviewed eight potential types of remedies to handle the situation of the current unpaid closed charter school retirement plan contributions, as follows:
Undertake Better Charter School Collection Procedures. Testimony indicated that the affected retirement plans have currently taken a variety of steps to recover unpaid member and employer retirement plan contributions beyond simply notifying the charter school of its obligation at some point. The Minnesota Collection Enterprise Division of the Department of Revenue is the primary collection tool of the State of Minnesota, but it is unclear whether any of the unpaid amounts have been referred to the division. From the division, uncollectable debts are eventually referred to private collections agencies.
Commence/Participate In Bankruptcy Proceedings. If any closed charter schools have sought bankruptcy protection under federal law, the affected retirement plan or plans could participate in future bankruptcy proceedings. If the closed charter schools have not initiated bankruptcy action, the affected retirement plans as creditors are empowered to compel bankruptcy activities and a liquidation of any closed charter school assets.
Initiate Litigation Against The Charter School Operator. The affected retirement plans could initiate litigation against the operator of a closed charter school for the principal amount of any unpaid retirement plan contributions plus interest since the default date. While there may be numerous potential causes of action that could be the basis for the litigation, ultimately, a fraud likely was perpetrated against the retirement plans and a legal action could be pursued on that basis.
Imposition Of Charter Sponsor Obligation. Either by litigation or by legislation, the entity sponsoring the closed charter school could be held liable for the debts of the closed charter school. Although a sponsor is immune from civil liability with respect to all activities related to a sponsored charter school under Minnesota Statutes, Section 124D.10, Subdivision 25, Paragraph (c), there may still be sponsor liability if the sponsor was derelict in undertaking its responsibilities under law or contract to monitor the financial activities of the charter school or if the sponsor was aware of or participated in any charter school operator fraud. If litigation cannot establish charter sponsor liability, future proposed legislation could provide a reduction or setoff or a succession of reductions or setoffs against any future State aid payable to a charter school sponsor.
Retirement Fund Subsidization Of Obligation. If no other remedy is implemented administratively or legislatively, the pension fund applicable to the affected retirement plan would ultimately bear whatever net liability that results. With closed charter schools, the extent of liability to be borne by the pension plan depends on the past and future employment and plan membership of the relevant personnel. If the personnel was new to public service and ultimately will never qualify for a public pension benefit, the lack of contributions will shift part of the burden to the affected plan members in a reduced refund and will reduce the actuarial gain that the retirement plan would otherwise obtain. If the personnel had extensive prior public service or if the personnel ultimately renders significant future public service, the pension plan and fund will suffer an actual actuarial loss.
Payment Obligation Spread Over Remaining Employing Units. Proposed legislation could be pursued that would spread the amount of the unpaid closed charter school member and employer contribution amounts, plus interest since the default, as a surcharge over a period of time against the universe of all remaining charter schools and charter school sponsors, or the universe of all other employing units. For the TRA and PERA unpaid charter school contribution amounts, these varying universes make a considerable difference, but for MTRFA or StPTRFA, there is perhaps little difference between all other charter school sponsors or all other employing units, since these plans are essentially single employer retirement plans.
Payment Obligation Spread Over Retirement Plan Contributors. Proposed legislation could be pursued that would spread the amount of the unpaid closed charter school member and employer contribution amounts, plus interest since the default, as a surcharge in effect for a period of time over the members and employers covered by the retirement plan.
State Payment. Proposed legislation could be pursued that would have the State of Minnesota pay the amount of the unpaid closed charter school contribution amounts, plus interest since the default date. The payment obligation could be charged against the Department of Children, Families and Learning, deducted from aid dedicated for charter schools, or paid from the State General Fund. The 2001 Session proposed legislation, S.F. 2038 (Pogemiller); H.F. 2215 (Mares), as introduced, would have paid the unpaid amounts from the State’s General Fund. The 2001 Session proposed legislation as recommended by the Legislative Commission on Pensions and Retirement and amended in the Senate (see Attachment A) would have deducted the unpaid amounts from the charter school building lease aid otherwise payable.
The Commission reviewed twelve potential remedies for any future default in charter school retirement plan member and employer contributions, as follows:
Require Better Retirement Plan Contribution Monitoring. The potential for retirement contribution defaults by charter schools will be reduced if the retirement plan engages in more frequent and more regular monitoring of the retirement plan contributions from charter schools. As indicated in the case of unpaid charter school retirement contributions to the Minneapolis Teachers Retirement Fund Association (MTRFA), where the retirement contributions are several months in default, a failure to pursue remedies for any defaulted amounts increases the likelihood that the contributions would become unpaid and unredeemable and that the charter school would close without settling these debts.
Require School Charter Document To Include Monitoring And Collection Procedures. Contribution defaults by charter schools can be prevented or minimized if the charter document under which a charter school operates is required to contain specific procedures relating to retirement plan contribution payment monitoring and collection and those procedures are binding both on the charter school and the charter sponsor. Because each charter school is likely to argue that it has unique or special circumstances, establishing uniform comprehensive statutory monitoring and collection procedures may not be possible, but each charter school could be mandated to design appropriate and applicable procedures and included in the charter contract.
Require The Prepayment Of Charter School Contributions. The potential for charter schools to default in making their retirement contributions would be reduced or eliminated if charter schools were required by statute to be prepaid. The statutory prepayment obligation, akin to the payment of estimated federal or state income taxes, could be quarterly, monthly, or annually.
Require The Deduction Of Charter School Contributions From Charter School State Aid. An alternative procedure for preventing a default by charter schools in their retirement plan contributions would be to require the Department of Children, Families and Learning (CFL) to deduct an amount for retirement plan contributions from school aid amounts payable and to transmit the deductions to the applicable retirement plan. Currently, teacher retirement plan charter school contributions range from 0.66 percent of charter school revenue to 4.47 percent of charter school revenue, with an average of 1.78 percent. For support staff, charter school contributions to the Public Employees Retirement Association (PERA) range from 0.20 percent of charter school revenue to 1.97 percent of charter school revenue, with an average of 0.77 percent. On average, State aid to charter schools accounts for 80.88 percent of total charter school revenue, so deducting 3.15 percent (2.20 percent for teachers and 0.95 percent for support staff) of any State aid payment to a charter school would largely cover the average charter school contribution requirements.
Define A Retirement Contribution Default As Financial Mismanagement; Impose Moratorium On Charter Sponsors Of Mismanaged Charter Schools. One means of indicating the importance of avoiding retirement plan contribution defaults by charter schools and the need for charter school sponsors to vigorously monitor charter school activity is to define financial mismanagement by a charter school, to include in that definition a default in the payment of retirement plan contributions or a significant delay in their payment, and to place a moratorium on the granting of new charters by a sponsor of a charter school which was involved in financial mismanagement. Minnesota Statutes, Section 124D.10, Subdivision 23, does not define financial mismanagement, but provides for charter non-renewal or termination if the charter school fails to meet generally accepted standards of fiscal management. There are no current statutory restrictions on the number of charters that a sponsor may undertake, even if prior charter schools close or engage in financial mismanagement.
Require The Posting Of Performance Bonds By Charter Schools Or Charter Sponsors. To provide a remedy of making available assets to tap in the event of a charter school retirement plan contribution default, the charter school or the charter school sponsor could be required by statute to post a performance bond. Akin to many circumstances when the financial solvency of an entity in making a future stream of payments is uncertain, the posting of a bond would provide security through the creation of an access point to financial resources to cover the retirement plan contribution payment upon a default.
Establish A Charter School Contribution Surcharge For Future Unpaid Retirement Plan Contributions. To help insure that retirement plans will not be left with no financial resources to access when a charter school defaults on retirement plan contributions, a reserve could be established by statute and funded by a surcharge on charter school employer contributions. The reserve would be administered by the Department of Finance or by the Department of Children, Families and Learning. The surcharge amount should be seven tenths of one percent of covered salary of charter schools in order to raise an annual reserve of $25,000, the amount of current unpaid charter school retirement plan contributions. The surcharge could blink on and blink off depending on the size of the total reserve. At the end of each plan year, retirement plans could apply to have any unpaid retirement plan contributions covered from the reserve.
Establish A Retirement Plan Employer Contribution Surcharge To Defray Future Unpaid Retirement Plan Contributions. Akin to the prior potential remedy, a statutory reserve could be established and a surcharge could be imposed on the employers covered by the five affected retirement plans. The reserve would be administered by a centralized administrative structure, probably the Department of Children, Families and Learning or the Department of Finance, and invested by the State Board of Investment. In order to produce an annual reserve amount of $25,000, the amount of the current unpaid retirement plan contribution, the surcharge would need to be approximately $0.12 per active member per year. After a sizable reserve is established, the surcharge could blink on and blink off to maintain the reserve at a minimum level. The reserve would be drawn upon by retirement plans with unpaid charter school contributions or an annual basis, after the retirement plan had exhausted all other means for recovering the unpaid amounts.
Establish A Retirement Plan Employer And Membership Contribution Surcharge To Cover Future Unpaid Retirement Plan Contributions. The alternative is identical to the prior two potential remedies, except that the surcharge would be imposed on both members and employers. With a broadening financial base, the surcharge amount would be smaller to produce the same total revenue. To raise an annual amount of $25,000, the current unpaid closed charter school retirement plan contribution amount, the surcharge would need to be approximately $0.06 per active member per year.
Cover All Charter School Teachers By TRA. In order to minimize the potential for future charter school retirement plan contribution defaults, retirement coverage for charter school teachers could be provided through the statewide Teachers Retirement Association (TRA) rather than four teacher retirement plans. In addition to imposing a smaller employer retirement contribution on the affected charter schools, centralizing charter school teacher retirement coverage in TRA will utilize TRA’s existing system for collecting retirement plan contributions from disparate employing units.
State Payment. Proposed legislation could be pursued that would have the State of Minnesota pay the amount of charter school retirement plan contributions that remain unpaid upon any future closure. The State payment could be from a General Fund standing appropriation or as an ongoing subtraction from the State lease aid available to charter schools.
Improve The Process For Checking Retirement Plan Membership Inclusions. While known unpaid charter school retirement plan contributions prompted this mandated interim project, there is a large likely problem of omitted charter school retirement plan contributions and retirement plan service credit gaps arising from charter school employees who are eligible for retirement plan coverage, but are not provided concurrent coverage and service credit. Some open charter schools reported by the Department of Children, Families and Learning were not reported as participating employing units by any retirement plan and a number of open charter schools were reported as participating employing units by a teacher retirement plan but were not reported by the General Employees Retirement Plan of the Public Employees Retirement Association (PERA-General). If the charter school closes before the period for correcting omitted contributions runs, which is three years in PERA-General, no maximum period in the Teachers Retirement Association (TRA), and three years for the first class city teacher retirement plans, the affected charter school employee will have no resource other than special legislation to permit a service credit purchase, with potentially no remaining charter school upon which to impose the retirement plan contribution liability.
The following chart summarizes the alternatives considered by the Commission to resolve either the narrow scope problem of the unpaid retirement contributions of currently closed charter schools or the broader scope problem of potential defaults and potential omitted contributions in the future with respect to charter schools:
|
|
Timeframe |
|
|
|
Closed |
Open |
|
Contribution Type |
Accrued Undertake Better Charter School Collection Procedures (A-1: LCPR01-223) Commence/Participate In Bankruptcy Proceedings Litigate Against Charter Sponsor Impose Charter Sponsor Obligation (A-2: LCPR01-224) Retirement Fund Subsidization Payment Obligation Spread Over Remaining Employing Units (A-3: LCPR01-243; and A-4: LCPR01-225) Payment Obligation Spread Over Retirement Plan Contributors (A-5: LCPR01-226) State Payment of Obligation (A-6: LCPR01-227; A-7: LCPR01-228; |
Accruing Require Better Retirement Plan Contribution Monitoring (B-1: LCPR01-230) Require Collection Procedures As Part of Charter Document (B-1: LCPR01-230) Require Prepayment of Charter School Retirement Contributions (B-2: LCPR01-231) Require Deduction of Charter School Contributions from State Aid (B-3: LCPR01-232) Define Contribution Default As Mismanagement and Impose Sponsor Moratorium (B-8: LCPR01-237) Require Charter Sponsor Bonding (B-4: LCPR01-233) Payment Obligation Spread Over Remaining Charter Schools (B-5: LCPR01-234) Payment Obligation Spread Over Remaining Employing Units (B-6: LCPR01-235) Payment Obligation Spread Over Retirement Plan Contributors (B-7: LCPR01-236) Standardize Employer Contribution Amount by Mandating TRA Coverage (B-12: LCPR01-241) State Payment of Obligation |
|
Contribution Type |
Omitted Undertake Better Charter School Collection Procedures (A-1: LCPR01-223) Commence/Participate In Bankruptcy Proceedings Litigate Against Charter Sponsor Impose Charter Sponsor Obligation (A-2: LCPR01-224) Retirement Fund Subsidization Payment Obligation Spread Over Remaining Employing Units (A-3: LCPR01-243; and A-4: LCPR01-225) Payment Obligation Spread Over Retirement Plan Contributors (A-5: LCPR01-226) State Payment of Obligation |
Omitted Require Better Retirement Plan Contribution Monitoring (B-1: LCPR01-230) Require Collection Procedures As Part of Charter Document (B-1: LCPR01-230) Require Prepayment of Charter School Retirement Contributions (B-2: LCPR01-231) Require Deduction of Charter School Contributions From State Aid (B-3: LCPR01-232) Define Contribution Default As Mismanagement and Impose Sponsor Moratorium (B-8: LCPR01-237) Require Charter Sponsor Bonding Payment Obligation Spread Over Remaining Charter Schools (B-5: LCPR01-234) Payment Obligation Spread Over Remaining Employing Units (B-6: LCPR01-235) Payment Obligation Spread Over Retirement Plan Contributors (B-7: LCPR01-236) Standardize Employer Contribution Amount by Mandating TRA Coverage (B-12: LCPR01-241) State Payment of Obligation Improve Retirement Plan Omitted Membership Checking Process (B-13: LCPR01-242) |
The following summarizes the potential remedies outlined above and provides a brief policy discussion of those potential remedies, with the indicated draft proposed legislation attached:
A-1. Draft Proposed Legislation LCPR01-223; Enhanced Retirement Plan Contribution Collection Activities And Responsibilities.
Summary
Specifically Including Unpaid Charter School Contributions In Debt Collection Enterprise Function
Retirement Plan Administrators Required To Certify Unpaid Charter School Contributions For Collection
Policy Issues. Draft LCPR01-223 raises several pension and related public policy issues that may merit consideration by the Commission, as follows:
Potential Burden On The Minnesota Collection Enterprise
. The policy issue is the potential burden that the attempted collection of closed charter school unpaid retirement plan contributions will place on the Minnesota Collection Enterprise. It is unclear whether unpaid retirement plan contributions are currently subject to this debt collection process and this assignment, if new, may interfere with the entity’s intended purpose.
Potentially Insignificant Collection Amounts
Lack Of Clear Obligor
Better Resolution Through Retirement Plan Vigilance
A-2. Draft Proposed Legislation LCPR01-224; Increased Charter School Sponsor Liability for Unpaid Charter School Contributions.
Summary
Policy Issues
Reversal Of Perceived Sponsor Immunity After The Fact
|
Charter School |
Sponsor |
|
1. Central Minnesota Deaf School |
St. Cloud School District |
|
2. Dakota Open Charter School |
Minnesota State Board of Education |
|
3. Frederick Douglass Charter School |
Minneapolis School Board |
Likely Impediment To The Formation Of Future Charter Schools. The policy issue is the impediment that imposing liability for unpaid closed charter school retirement plan contributions on charter school sponsors will become to the formation of future charter schools. If the State desires to encourage the creation of more charter schools, potential future retirement plan defaults may be a price for that encouragement.
Litigation Is A Costly Recovery Tool
A-3. Draft Proposed Legislation LCPR01-243; One-Time Surcharge On Open Charter Schools For Unpaid Closed Charter School Contribution Amount.
Summary
Policy Issues
Potential Financial Burden On Current Charter Schools
Fairness Of Imposing Surcharge Burden
Potential Surcharge Collection Problems And Defaults
A-4. Draft Proposed Legislation LCPR01-225; One-Time Surcharge On Employing Units For Unpaid Closed Charter School Contribution Amount.
Summary
Policy Issues
Fairness Of Imposing A Surcharge On Employing Units
Potential Internal Plan Controversy In Surcharge Allocation
Administrative Complexity In The Surcharge Collection And Disbursement
A-5. Draft Proposed Legislation LCPR01-226; One-Time Surcharge On Retirement Plan Members And Employers For Unpaid Closed Charter School Contribution Amount.
Summary
Policy Issues
Fairness Of Imposing Surcharge On Retirement Plan Members
Potential Internal Plan Controversy In Surcharge Allocation
Administrative Complexity In The Surcharge Collection And Disbursement
A-6. Draft Proposed Legislation LCPR01-227; Payment Of Unpaid Closed Charter School Contribution Amount By The Department Of Children, Families And Learning.
Summary
Policy Issues
Budgetary Impact On The Department Of Children, Families And Learning
Fairness Of The Imposition Of The Payment Burden
Precedent For Additional State Bailouts
A-7. Draft Proposed Legislation LCPR01-228; Payment Of Unpaid Closed Charter School Retirement Contribution Amount As Deduction From Charter School Lease Aid.
Summary
Policy Issues
Appropriateness Of Placing Unpaid Contribution Burden On Charter Schools
Appropriateness Of The Allocation Of The Burden Between Charter Schools
Unclear Relationship Between Lease Aid And Retirement Contributions
A-8. Draft Proposed Legislation LCPR01-229; Payment Of Unpaid Closed Charter School Retirement Contribution Amount From The State General Fund.
Summary
Policy Issues
Precedent For Future Additional State Bailouts
Potential Encouragement Of Future Charter School Retirement
Potential Encouragement Of Future Contribution Collection Laxity By Retirement Plan Administrators
B-1. Draft Proposed Legislation LCPR01-230; Enhanced Retirement Plan Contribution Monitoring And Collection Procedures Relating To Charter Schools.
Summary
Requires CFL Notification Of Retirement Plans Of Each Charter School Approval
PERA Membership And Contribution Reporting By Charter Schools Is Upgraded
TRA Membership And Contribution Reporting By Charter Schools Is Upgraded
First Class City Teacher Retirement Plan Membership And Contribution Reporting By Charter Schools Is Upgraded
Policy Issues
Statutory Requirements Do Not Automatically Prompt Actual Retirement Plan Administrative Priority
Administrative Burden Of Requiring Additional PERA Field Audits Of Charter Schools
Self-Help Remedy Of Vigilance Available As An Alternative To Legislative Mandates
B-2. Draft Proposed Legislation LCPR01-231; Monthly Prepayment Of Member And Employer Contributions By Charter Schools.
Summary
Policy Issues
Prepayment Will Impose A Financial Burden On Charter Schools
Differing Procedures For Charter School Contributions May Cause Retirement Plan Administrative Problems
Potential Voidable Preference For Charter Schools Nearing Bankruptcy
B-3. Draft Proposed Legislation LCPR01-232; Deduction Of Charter School Retirement Contribution From State Education Aid Payments.
- . Draft LCPR01-232 amends Minnesota Statutes, Sections 353.27, 354.42, and 354A.12, relating to member, employer and employer additional contributions to the General Employees Retirement Plan of the Public Employees Retirement Association (PERA-General), the Teachers Retirement Association (TRA), and the first class city teacher retirement fund associations, by making the charter school retirement contributions payable in advance for a school year from State education aid.
Summary
- . Draft LCPR01-232 raises several pension and related public policy issues that may be of concern to the Commission, as follows:
Policy Issues
- . See policy issue #1 for Draft LCPR01-231 (B-2).
Prepayment Will Impose A Financial Burden On Charter Schools
- . The policy issue is the appropriateness of increasing the administrative duties of the affected retirement plans in certifying annual charter school contribution prepayments, collecting those prepayments, and reconciling end-of-school-year amounts. The deduction of retirement contributions by the Department of Children, Families and Learning from future charter school state aid payments also will reduce the levels of future contribution defaults, but adds other complexities and may not eliminate the problem. The amount of total charter school revenue utilized to pay charter school personnel salaries varies considerably and the amount of retirement plan contributions also vary, so any "average amount" deductions will either overpay or underpay the contribution obligation in most cases. With an overpayment, the retirement plan will need to make reconciliation payments and, with an underpayment, the charter school may be faced with a difficult large lump sum payment towards the end of a school year.
Additional Retirement Plan Administrative Burdens
Potential Voidable Preferences For Charter Schools Nearing Bankruptcy. See policy issue #3 for Draft LCPR01-231 (B-2).
B-4. Draft Proposed Legislation LCPR01-233; Requires Charter School Sponsors To Be Bonded For A Portion Of Charter School Contributions Payable.
- . Draft LCPR01-233 amends Minnesota Statutes, Section 124D.10, Subdivision 4, relating to sponsor requirements in the formation of charter schools, by requiring charter school sponsors to provide the Department of Children, Families and Learning with evidence of having bonding sufficient to cover 25 percent of the likely annual charter school retirement contributions in the event of a contribution default.
Summary
- . Draft LCPR01-233 raises several pension and related public policy issues that may merit additional consideration by the Commission, as follows:
Policy Issues
- . The policy issue is the appropriateness of imposing a financial burden on either charter schools or charter school sponsors by virtue of the cost of the mandated bonding. A bonding requirement will insure against retirement plan contribution defaults, but will impose a financial cost either on the charter school or on the charter sponsor. As a new bonding requirement, the likely cost of the bonds may be difficult to estimate.
Potential Financial Burden On Charter Schools Or Charter School Sponsors
- . The policy issue is the likely potential deficiency in the remedy by virtue of a mismatch in the bond coverage and any future charter school retirement plan contribution defaults. The amount of charter school retirement plan contributions will be a highly variable number over time and the bonds, although required to be modified annually, will not be a perfect match for every future default. The adequacy of the bonding will depend on the vigilance of the Department of Children, Families and Learning employees assigned to the duty of monitoring the bonding requirement.
Likely Potential Gaps In Bond Coverage
- . The policy issue is the appropriateness of imposing an additional administrative burden on the Department of Children, Families and Learning in monitoring the proposed charter school retirement plan contribution bonding requirement. With 75 current charter schools and more potential future charter schools, the extent of the personnel needed to undertake this responsibility is difficult to estimate.
Potential Administrative Burden On The Department Of Children, Families And Learning
B-5. Draft Proposed Legislation LCPR01-234; Ongoing Surcharge On Charter Schools For Contribution Default Reserve.
- . Draft LCPR01-234 amends Minnesota Statutes, Chapter 11A, relating to the State Board of Investment; Chapter 127A, relating to the Commissioner of Children, Families and Learning; Section 353.27, Subdivision 3, relating to employer contributions to the General Employees Retirement Plan of the Public Employees Retirement Association (PERA-General); Section 354.42, Subdivision 3, relating to employer contributions to the Teachers Retirement Association (TRA); and Section 354A.12, Subdivision 2a, relating to employer contributions to the first class city teacher retirement fund associations, by establishing an unpaid closed charter school retirement contribution reserve of $50,000, administrated by the Department of Children, Families and Learning (CFL), invested by the State Board of Investment, and funded by a 0.70 percent of salary surcharge on employer retirement plan contributions from all charter schools. The surcharge would blink on and blink off when the reserve is under or over $50,000, respectively, in the prior year.
Summary
- . Draft LCPR01-234 raises several pension and related public policy issues that the Commission may wish to discuss, as follows:
Policy Issues
- . See policy issue #2 for Draft LCPR01-243 (A-3).
Fairness In Imposing A Surcharge Burden On Current Charter Schools
- . See policy issue #3 for Draft LCPR01-243 (A-3).
Administrative Complexity In Collection And Disbursement
- . The policy issue is the appropriateness of imposing additional administrative burdens on the Department of Children, Families and Learning to operate the proposed unpaid closed charter school retirement plan contribution reserve. The reserve involves retirement contributions and retirement plans, which are presumably outside the department’s normal function. The reserve also is likely to be a novel administrative task for the department.
Administrative Burden On The Department Of Children, Families And Learning To Operate The Reserve
B-6. Draft Proposed Legislation LCPR01-235; Ongoing Surcharge On Employer Contributions For Closed Charter School Contribution Default Reserve.
- . Draft LCPR01-235 amends Minnesota Statutes, Chapter 11A, relating to the State Board of Investment; Chapter 127A, relating to the Commissioner of Children, Families and Learning; Section 353.27, Subdivision 3, relating to employer contributions to the General Employees Retirement Plan of the Public Employees Retirement Association (PERA-General); Section 354.42, Subdivision 3, relating to employer contributions to the Teachers Retirement Association (TRA); and Section 354A.12, Subdivision 2a, relating to employer contributions to the first class city teacher retirement fund associations, by establishing an unpaid closed charter school retirement contribution reserve of $100,000, administered by the Department of Children, Families and Learning (CFL), invested by the State Board of Investment, and funded by a 0.01 percent of salary surcharge on employer retirement plan contributions from all PERA, TRA, and first class city teacher retirement fund association participating employers. The surcharge would blink on and blink off when the reserve is under or over $100,000, respectively, in the prior year.
Summary
- . Draft LCPR01-235 raises several pension and related public policy issues that may merit Commission deliberation, as follows:
Policy Issues
- . See policy issue #1 for Draft LCPR01-225 (A-4).
Fairness In Imposing Surcharge Burden On Various Employer Units
- . See policy issue #3 for Draft LCPR01-225 (A-4).
Administrative Complexity In Collection And Disbursement
- . See policy issue #3 for Draft LCPR01-234 (B-5).
Administrative Burden On The Department Of Children, Families And Learning To Operate The Reserve
B-7. Draft Proposed Legislation LCPR01-236; Ongoing Surcharge On Member And Employer Contributions For Closed Charter School Contribution Default Reserve.
- . Draft LCPR01-236 amends Minnesota Statutes, Chapter 11A, relating to the State Board of Investment; Chapter 127A, relating to the Commissioner of Children, Families and Learning; Section 353.27, Subdivisions 2 and 3, relating to member and employer contributions to the General Employees Retirement Plan of the Public Employees Retirement Association (PERA-General); Section 354.42, Subdivisions 2 and 3, relating to member and employer contributions to the Teachers Retirement Association (TRA); and Section 354A.12, Subdivisions 1 and 2a, relating to member and employer contributions to the first class city teacher retirement fund associations, by establishing an unpaid closed charter school retirement contribution reserve of $200,000, administered by the Department of Children, Families and Learning (CFL), invested by the State Board of Investment, and funded by a 0.005 percent of salary surcharge on member and employer retirement plan contributions from all plan members and their employers. The surcharge would blink on and blink off when the reserve is under or over $200,000, respectively, in the prior year.
Summary
- . Draft LCPR01-236 raises several pension and related public policy issues that the Commission may wish to discuss, as follows:
Policy Issues
- . See policy issue #1 for Draft LCPR01-226 (A-5).
Fairness In Imposing Surcharge Burden On Retirement Plan Members And Employers
- . See policy issue #3 for Draft LCPR01-226 (A-5).
Administrative Complexity In Collection And Disbursement
- . See policy issue #3 for Draft LCPR01-234 (B-5).
Administrative Burden On The Department Of Children, Families And Learning To Operate The Reserve
B-8. Draft Proposed Legislation LCPR01-237; Moratorium On New Charter Schools For A Sponsor Of Prior Charter School Defaulting On Retirement Contribution Obligation.
- . Draft LCPR01-237 amends Minnesota Statutes, Section 124D.10, Subdivisions 3 and 23, by imposing a five-year moratorium on the sponsorship of additional charter schools by a sponsor of a closed charter school with unpaid retirement plan contributions and by defining financial management to include a failure by a closed charter school to make the timely payment of public retirement plan contributions.
Summary
- . Draft LCPR01-237 raises several pension and related public policy issues that the Commission may desire to scrutinize further, as follows:
Policy Issues
- . The policy issue is the potential hardship that may be worked on potential charter school sponsors and potential charter school operators by impeding or interfering with pending charter authorizations by the Department of Children, Families and Learning. The remedy of imposing a moratorium on granting new charters by sponsors involved in any prior retirement plan contribution default will indicate the seriousness with which the Legislature views the topic of potential defaults, but may impede the creation of valuable new charter schools because of a misdeed by another charter school. Immediately affected would be any new charter schools sponsored by the Minneapolis School Board, the Minnesota State Board of Education/Department of Children, Families and Learning, and the St. Cloud School Board.
Hardship On Pending Charter School Authorizations
- . The policy issue is the appropriateness of placing a five-year duration moratorium on the creation of new charter schools by charter sponsors who had sponsored a closed charter school which defaulted in paying retirement contributions. While the moratorium indicates legislative displeasure with sponsors connected with closed defaulting charter schools, the selection of a five-year period is arbitrary and is not clearly targeted to actually prevent future charter school defaults.
Appropriateness Of The Five-Year Moratorium Duration
- . The policy issue is the appropriateness of defining the default of a charter school in making retirement plan contributions as financial mismanagement that could be the basis for a charter sponsor terminating or not renewing a charter school charter. While it is unclear what the proponents of past charter school legislation intended by the phrase "financial mismanagement," default in meeting a legal obligation such as retirement plan contributions would normally be included in the general perception of what is meant by financial mismanagement.
The Appropriateness Of Defining Retirement Contribution Default As Financial Mismanagement
B-9. Draft Proposed Legislation LCPR01-238; Ongoing State General Fund Appropriation To Pay Closed Charter School Unpaid Retirement Plan Contributions.
- . Draft LCPR01-238 amends Minnesota Statutes, Chapter 356, relating to retirement generally, by adding an annual standing $50,000 appropriation from the State General Fund to the Commissioner of Children, Families and Learning for the payment of unpaid retirement plan contributions of closed charter schools.
Summary
- . Draft LCPR01-238 raises several pension and related public policy issues that the Commission may wish to consider further, as follows:
Policy Issues
- . See policy issue #1 for Draft LCPR01-229 (A-8).
Precedent For Additional State Bailouts
- . See policy issue #2 for Draft LCPR01-229 (A-8).
Potential Encouragement Of Future Charter School Irresponsibility
- . See policy issue #$3 for Draft LCPR01-229 (A-8).
Potential Encouragement Of Future Laxity By Retirement Plan Administrators
B-10. Draft Proposed Legislation LCPR01-239; Ongoing Subtraction From Charter School Lease Aid To Pay Closed Charter School Unpaid Retirement Plan Contributions.
- . Draft LCPR01-239 amends Minnesota Statutes, Chapter 356, relating to retirement generally, by adding a standing annual deduction from charter school lease aid of the amount needed to pay unpaid retirement plan contributions of closed charter schools.
Summary
- . Draft LCPR01-239 raises several pension and related public policy issues that may merit additional consideration by the Commission, as follows:
Policy Issues
- . See policy issue #1 for Draft LCPR01-228 (A-7).
Appropriateness Of Imposing The Default Burden On Current Charter Schools
- . See policy issue #2 for Draft LCPR01-228 (A-7).
Appropriate Allocation Of The Burden Between Charter Schools
- . See policy issue #3 for Draft LCPR01-228 (A-7).
Unclear Relationship Between Charter School Lease Aid And Retirement Contributions
B-11. Draft Proposed Legislation LCPR01-240; Codifying The Current Allocation Of Members Among Teacher Retirement Plans.
- . Draft LCPR01-240 amends Minnesota Statutes, Sections 354.05, subdivision 2, relating to membership in the statewide Teachers Retirement Association (TRA), and 354A.011, Subdivision 27, relating to membership in one of the first class city teacher retirement fund associations, by codifying the current informal arrangement of allocating charter school teacher membership based on the geographical location of the charter school.
Summary
- . Draft LCPR01-240 raises several pension and related public policy issues that the Commission may wish to review further, as follows:
Policy Issues
- . The policy issue is the appropriateness of the current method of allocating charter school teachers as members of the State’s four teacher retirement plans. The current allocation agreement, reached informally by the four teacher retirement plans in 1995, relies on the geographical location of the charter school building, and not of the charter sponsor, to determine appropriate retirement plan membership.
Appropriateness Of The Current Non-Statutory Membership Allocation
- . The policy issue is the appropriateness of the Legislature in sanctioning informal implementation agreements on the allocation of plan members. The implementation of the requirement that charter school teachers have teacher retirement plan coverage should have been ultimately presented to the Commission and the Legislature for its review and action.
Appropriateness Of Codifying Informal Membership Allocation Arrangements
- . The policy issue is whether or not the first class city teacher retirement fund associations have the capacity to actively and aggressively monitor charter school membership inclusions and contributions. The Duluth Teachers Retirement Fund Association (DTRFA) has had minimal exposure to charter schools and no closed charter school retirement contribution defaults. The Minneapolis Teachers Retirement Fund Association (MTRFA) has had the greatest charter school contribution default problem. The St. Paul Teachers Retirement Fund Association (StPTRFA) has apparently been vigorous in its monitoring and was able to resolve potential defaults. The Teachers Retirement Association (TRA) has had apparently minimal experience with charter school contribution defaults.
Capacity Of The Four Teacher Retirement Plans In Monitoring Charter School Membership And Contributions
B-12. Draft Proposed Legislation LCPR01-241; Providing Retirement Plan Coverage For All Charter School Teachers In The Statewide Teachers Retirement Association (TRA).
- . Draft LCPR01-241 amends Minnesota Statutes, Sections 354.05, Subdivision 2, relating to membership in the statewide Teachers Retirement Association (TRA); and 354A.011, Subdivision 27, relating to membership in one of the first class city teacher retirement fund associations, by requiring that all charter school teachers become members of TRA, irrespective of the geographical location of the charter school, and excluding charter school teachers from first class city teacher retirement fund association membership.
Summary
- . Draft LCPR01-241 raises several pension and related policy issues for potential Commission consideration, as follows:
Policy Issues
- . The policy issue is the appropriateness of utilizing a single teacher retirement plan to provide retirement coverage to all charter school teachers. Centralizing the retirement plan membership for charter school teachers will allow the Teachers Retirement Association (TRA) to concentrate its expertise and collection procedures on the problem.
Appropriateness Of Centralizing Charter School Teacher Members In One Retirement Plan
- . See policy issue #3 for Draft LCPR01-240 (B-10).
Capacity Of The Four Teacher Retirement Plans In Monitoring Charter School Membership And Contributions
- . The policy issue is whether it is appropriate to extend the reduced Teachers Retirement Association (TRA) employer contribution requirement to charter schools currently covered by one of the first class city teacher retirement fund associations. Consolidating charter school teacher retirement plan coverage into TRA rather than four teacher plans will save the applicable charter schools almost $550,000 in employer contributions in total annually because of the differences in current teacher retirement plan employer contribution rates, as follows:
Employer Retirement Contribution Savings To Metropolitan Charter Schools In TRA Coverage
|
Retirement |
Number of Charter Schools |
2000-2001 Employer Contributions |
2000-2001 Employer Contributions |
Difference |
|
DTRFA |
2 |
$134,273.05 |
$115,952.55 |
$18,320.50 |
|
MTRFA |
11 |
395,505.50 |
242,939.50 |
152,566.00 |
|
StPTRFA |
20 |
942,754.20 |
565,200.36 |
377,553.84 |
|
Total |
33 |
$1,472,532.75 |
$924,092.41 |
$548,440.34 |
B-13. Draft Proposed Legislation LCPR01-242; Requiring Annual CFL Review Of Charter School Employee Retirement Plan Membership Eligibility.
Summary
Policy Issues
Potential Reduction In Future Legislative Time Spent Resolving Charter School Coverage Issues
Mandated Review Will Not Substitute For Retirement Plan Vigilance
Appropriateness Of Department Of Children, Families And Learning Intrusion In An Area Foreign To Its Normal Activities
Commission-Recommended Recovery Solution/Solutions
(To be determined by the Commission)
Additional Commission Recommendations
(To be determined by the Commission)
The Commission requests prompt attention by the Legislature to its recommendation (recommendations) to resolve the problem of recovering unpaid closed charter school retirement plan contributions.