Will Olathe Public Schools eliminate early retirement plan? What we know
Olathe Public Schools is considering whether to end its Voluntary Early Retirement Plan (VERP) and Health Reimbursement Agreements (HRAs) as part of cost-saving efforts due to budget shortfalls, according to a teacher’s union and a district spokesperson.
The early retirement plan has been part of ongoing bargaining agreements ahead of next school year between the district and Olathe NEA, the labor union that represents public school teachers and staff.
Eliminating the plan could mean many employees will stay in their jobs longer, because they lose the financial bridge VERP provides before Social Security kicks in, union representatives said in an April bargaining session.
It may effectively close off a retirement option that many have built their plans around, the union says.
At the union’s April bargaining session, Eric Skoglund of the Olathe NEA said there are essentially two groups of people among VERP participants: a small set of educators who are financially ready to retire and who view VERP as “icing on the cake” and a larger group who rely on their salary and would likely keep working without the plan.
Skoglund presented numbers to Olathe district officials at the meeting about whether VERP is a net savings or net cost to the district.
“The … bottom line is that I think there is a break-even point where VERP becomes worth doing and keeping, and that is at about 40% of this VERP motive variable,” Skoglund said. “So, if you believe that 40% or more of the people who take VERP would otherwise have stayed employed in Olathe, then VERP is saving us money.”
How does VERP work?
The early retirement program is designed as a bridge benefit for employees who are eligible to retire under Kansas’ Rule of 85, or Kansas Public Employees Retirement System (KPERS) Tier 1, but are still too young to access Social Security.
Some employees under KPERS 1 who started work right out of college can qualify to retire in their mid-50s, when their district pay is around its peak.
In Olathe, VERP offers an incentive payment based on the difference between their late-career salary and what a new hire would cost the district.
Skoglund said that in the past, there was a shared incentive to encourage people to retire because their pay is much higher than what a new hire would be making.
“It’s worth investigating whether that’s still true,” Skoglund said.
VERP and HRAs have been part of the district’s benefits package for more than 20 years, according to Erin Schulte, an Olathe Public Schools spokesperson.
“While these programs go beyond standard school district retirement offerings, they represent a significant financial investment as they are fully funded by the district,” Schulte said. “Therefore, any reduction or elimination would result in cost savings.”
Under the 2025-26 school year bargaining agreement, only licensed/certified and administrative staff on continuing contracts and paid from an Olathe Schools budget funding source at the time of retirement are eligible for VERP.
The employee must be retiring from the Olathe Public Schools after having held a valid employment contract with the district to be eligible. The employee is also required to have worked 15 continuous years in the district to qualify, and is required to have submitted an application to KPERS in order to begin drawing benefits before the end of the calendar year.
Benefits apply for a maximum of five years or until the employee is eligible for full Social Security benefits, whichever happens first.
According to school board policy, the Board of Education may withdraw or terminate VERP if “notice is given in writing to the Professional Council one year in advance of the year in which the termination of the policy will take place.”
“Such action will not affect early retirement payments to participants approved prior to the withdrawal, discontinuation, or termination,” the policy states.
In an email this week, district spokesperson Erin Schulte said Olathe Public Schools has already implemented a range of cost-saving solutions in light of budget constraints. The district is eliminating and consolidating 27 district-level positions, Schulte said.
As of late April, no decisions have been made regarding changes to retirement benefits, she said.
“As an act of transparency, the district communicated early that adjustments to district retirement benefits including VERP and HRAs were a potential cost-savings option,” Schulte said.
A spokesperson for Olathe NEA said that while the bargaining process continues, it declines to comment on specifics, including VERP. It is still unclear whether the program is likely to be eliminated.
Changes still uncertain
Potential cuts are being weighed in the district due to a year-to-year funding gap caused, in part, by the state’s underfunding of special education. Budget shortfalls in Olathe are also related to a steady decline in enrollment, district officials have said.
As cuts are being made, the district is prioritizing keeping classroom resources and student programs, Schulte said.
Last month, The Star reported the district will cut special education positions next year, even as the number of students who need those services is growing. The cuts will result in larger class sizes and a hiring freeze, Superintendent Brent Yeager said last month.
The district also eliminated six mental health employees amid other districtwide reductions to make up for budget constraints.
Olathe NEA said in a social media post that it heard concerns from many union members and employees about what it would mean if VERP were eliminated.
Another concern among that group is whether the district’s Health Reimbursement Agreements (HRAs) would be discontinued. These work by allowing employees who qualify at retirement to convert a maximum of 425 unused sick days into a monetary amount and deposit it into an HRA account.
That HRA can be used for eligible medical, dental and/or vision expenses for the employee and eligible dependents.
According to Angie Powers, Olathe NEA president, around 81 educators shared stories with the union about times they felt they needed to take a leave day but decided not to. Altogether, those 81 educators have 11,325 days of accumulated leave.
Union representative Laura Wiltanger said one of the top reasons educators gave for not taking leave when they felt like they needed to was because employees wanted to save their days for the retirement benefit.
“As we navigate all of the implications of what’s happening in Topeka, it’s just important that we also keep in mind those stories,” Powers said.
