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Provo School Employees Sue Over Lost Retirement Health Benefit

Provo School Employees Sue Over Lost Retirement Health Benefit



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PROVO, Utah (AP) -- Thirty-four Provo School District employees have sued over the elimination of a retirement health benefit.

They have sued not only the district and school board but also local and state teacher and employee associations they say failed to prevent the benefit loss.

The 4th District Court lawsuit filed last week alleges school administrators neglected to reserve sufficient money for continued Medigap benefits, insurance that covers medical expenses not paid by Medicare.

It alleges school officials persuaded employees to accept lower salaries with the understanding that the extra money would support future retirement benefits. Then the 2004-2005 contract canceled Medigap except for employees who are 55 years old by 2005 and have worked for the district for at least 20 years.

Board members have said the district cannot afford to absorb the rising Medigap costs.

However, the plaintiffs contend that federal law requires districts to "set aside sufficient money to pay for promised post-employment benefits."

Mike McCoy, general counsel for the Utah Education Association, said the applicable guidelines are nonbinding. The Governmental Accounting Standards Board recommends agencies plan ahead for such commitments.

"It's a serious problem: Past administrators have not adequately estimated the cost of post-retirement benefits," he said. "It would have been nice if they had done it, but that was never a requirement."

McCoy said UEA representatives were trying to negotiate a settlement with the district and had hired a mediator as well as a consultant to review district finances.

"The worst part of it (the lawsuit) is they make us support the district in a case where we prefer not to," he said. "They should have asked us to join the lawsuit. They should have asked us for advice. They should have asked us what we were doing to work on it, but they didn't do any of that."

In addition to the UEA and the school district and board, defendants include the Provo Education Association, the Provo Classified Employees Association and Bonneville Uniserv, which provides contract negotiation and advocacy services to education unions.

Bonneville Uniserv Director Linda Peterson said she struggled for several years to convince the district to examine future costs of benefit obligations before administrators finally agreed to do so last March.

"It's easy to say in hindsight what everyone should have done," she said. "But I don't think there is anyone in the state who doesn't understand that education funding in Utah has been on a pay-as-you-go basis."

The 34 plaintiffs are seeking either trust-fund contributions ample to pay Medigap coverage as promised or monetary compensation equal to that value, attorneys' fees and reimbursement for the lower salaries accepted as a compromise to ensure Medigap and other benefits.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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