UFT Agrees To 'Tough School' Bonus Program;
Will Pay $3G per Teacher; Secure 25/55 Pension

By MEREDITH KOLODNER

The Bloomberg administration and the United Federation of Teachers agreed last week to a school-based merit-pay pilot program based largely on standardized test scores, sweetening the deal with an agreement that will allow current Teachers to retire with a full pension at 55 if they have 25 years of service.

The Chief-Leader/Michel Friang PLEASED WITH PENSION: Not all Teachers were ready to embrace the new school-based performance bonus program announced last week by the UFT and the city, but most were thrilled with the companion piece that will allow them to retire with a full pension after 25 years at age 55. 'It's pretty amazing that we're able to get ahead on pensions in this day and age,' said Bronx elementary school Teacher Alan Reiff.

The performance-pay plan will award bonuses averaging $3,000 to the teaching staff of high-needs schools that agree to participate and show measurable improvement on test scores. A compensation committee, comprised of two UFT members, the Principal and the Principal's designee, can decide whether to distribute the bonuses equally or give some staff more than others.

UFT: 'A Breakthrough'

The Bloomberg administration for years has sought a merit-pay system. Union officials differentiated the school-based plan from one that would solely reward individual Teachers.

"We've grappled with this issue for a very long time and have come to a constructive solution," said UFT President Randi Weingarten. "This is a breakthrough in terms of the relationship between the administration and Teachers, because it assumes that Teachers are co-equal partners."

The long-sought pension deal will be funded by employee contributions, requiring that members of the Teachers Retirement System, including school administrators, increase their contributions by 1.85 percent to be eligible. New hires will also have the opportunity to buy in, but will need 27 years of service to retire with a full pension. UFT members who are part of the Board of Education Retirement System are also eligible.

The three-part deal also resolves an outstanding law-suit over interest calculations for TRS that will result in a $160 million payout by the city to 40,000 retirees and active Teachers.

In schools that vote to participate in the bonus program, UFT members will elect their two representatives on the compensation committee, which must make decisions by consensus. All UFT members on a participating school's payroll, including Teachers, Paraprofessionals, Guidance Counselors, School Nurses, and School Secretaries, are eligible for the bonus.

Next Year 30% of Schools

The program will start with about 200 schools, or 15 percent of the city total, and will include only the highest-need schools, chosen based on poverty, the number of English Language Learners Special Education students, and performance levels. This year's program will be funded by $20 million in private money, raised jointly by the UFT and the DOE. Next year it will expand to about 400 high-needs schools, using public money, which by agreement cannot supplant the funds available for collective bargaining. A jointly agreed-to outside entity will evaluate the program after two years and the two sides will decide how to proceed.

The agreement is not subject to UFT member approval, as it was a modification of the existing contract. It was unanimously approved the by the union's executive board.

Mayor Lauds Plan, Union

Mayor Bloomberg was clearly elated by the deal, and argued that it was historic, setting an example nationally. "Conventional wisdom has always been that solutions could not come in cities and states with strong public-employee unions," he said at an Oct. 17 press conference. "Randi and the UFT have proven the conventional wisdom wrong."

He also said he believed that the pay-for-performance system, which was a central part of the Council of Schools Supervisors and Administrators contract agreed to in April, would improve education.

"In the private sector, cash incentives are proven motivators for producing results," he said. "The most successful employees work harder and everyone else tries to figure out how they can improve as well."

Ms. Weingarten's emphasis was more focused on an anticipated increase in cooperation and collaboration among school staff in order to improve performance. "The schools that work together will ultimately get the bonuses," she said, "because the schools that work together will have the increases in achievement."

Seniority Doesn't Count

School compensation committees cannot consider seniority as a factor in how to distribute the bonuses. There is no cap on how many participating schools can receive the money. Schools will be told in advance the exact criteria for improvement, which will be based on school progress reports, as soon as the final details are worked out by the DOE in consultation with the UFT.

The UFT has in the past vigorously opposed basing evaluations on test scores. In response to a question as to whether the new policy was in contradiction to that long-held opposition, Ms. Weingarten said, "We have had a problem when someone tries to use high-stakes testing as the end-all, be-all. The progress reports, I may quibble with aspects of it, but they have a bunch of other factors that are part of that; they are not exclusively standardized test scores."

Currently, 85 percent of a school's progress report is based on standardized test scores and the remaining 15 percent is based on parent, Teacher and student survey results. The weighting of factors to determine the bonuses could be altered slightly, but DOE officials said they are likely to remain similar.

Unhealthy Competition?

Some early critics raised the question of whether individual teachers will be pitted against each other if some are awarded higher bonuses than others. The agreement stipulates that while differentiations can be made, "the compensation committee shall presume that all UFT-represented staff employed at a school that meets the targets for the bonus have contributed to the school's achievement to some extent and therefore should share in the bonus."

Nonetheless, nothing about the agreement prevents a committee from granting $500 bonuses to some employees and $5,000 to others. Ms. Weingarten said that she expects that most committees will share the bonuses equally, but that as a pilot program, she didn't want to discount the idea that there might be some differentiation.

In addition, schools will vote on whether to ratify the bonus distribution plan. If a majority does not approve it, dissatisfied individuals can appeal to an oversight committee, comprised of the UFT president and the Schools Chancellor, or their designees. Modifications to the awards can be made, however, only if the oversight committee determines that the decision was "arbitrary, capricious or in clear violation of the law" and rules of the agreement.

Right Kind of Merit Pay

Ms. Weingarten argued that the fact that UFT members will be involved in determining the bonus size and that the bonuses will be rewarded for overall school progress differentiated the program from individual bonuses proposed in the past by the administration. "We oppose individual merit-based pay that is based upon individual Teachers' test scores," she said. "Schools work as communities. It's really a matter of what incentives work that are fair and are aligned with core principles. In this instance, the core principle is to attract, retain, nurture and support Teachers."

The pension deal was welcomed by educators, who have long pressed for a deal that would allow them to retire fully vested after 25 years - rather than the longtime standard of 30 - at age 55. The deal must be approved by Albany, but is touted as being cost-free for both the city and state. The school bonus program will not go into effect unless the pension deal is approved by the Legislature. Mr. Bloomberg said that the pension portion would save the city money after five years by encouraging senior Teachers making higher wages to retire.

Deal Best for Vets

For the first 10 years, Teachers who opt into the 25/55 program would pay 4.85 percent towards their pension, compared to the current 3 percent. After 10 years, that amount would drop to 1.85 percent, reflecting the discontinuation of the basic contribution for those with more than a decade in the system. The 1.85-percent increase would not be retroactive, meaning that a Teacher with 23 years of service would only have to pay the 1.85 percent for her last two years to qualify for a full pension.

The deal comes out of an agreement in the 2005 contract that the city would work with the UFT to create a 25/55 plan, provided there was no cost to the city.

The legal settlement concludes a dispute between the city and the UFT over whether the city, since TRS's creation in 1970, had properly credited the amount of interest earned on members' annual contributions. The city will pay $160 million, which will supplement about 40,000 members' pensions. Originally, member contributions under Tier 1 were set based on estimated system earnings of 4 percent. By the late 1980s, TRS's estimated annual earnings were 8.25 percent, leading the UFT to argue that members had contributed more than was necessary and were entitled to share in the excess earnings. The problem was further complicated by the Variable Annuity Fund, which also paid out more than was anticipated.

Mr. Bloomberg said he was pleased with the settlement, since the city had risked liability for a significantly higher amount had it lost a lawsuit on the matter.

The UFT delegates assembly approved the three-part package deal by a hand vote overwhelmingly on Oct. 17.