Assuming the annual contribution — about 6 percent of each employee’s pay — didn’t change much, the total could exceed $50 million, said John Salter, the lead attorney for the plaintiffs
Yet school board Chairman Eugene Walker said he knows of no plan to save money for the possibility of a payout.
“Not to my knowledge,” Walker said, “because we anticipate success in the courts.”
Walker said the decision to cease payments was necessary to balance the budget.
The annuity plan, which supplements the state retirement plan, was established as an alternative to Social Security.
In a 1979 referendum, 70 percent of teachers and other eligible employees voted to substitute a private fund for Social Security. According to court documents, the vote came a week after the school board approved a reassuring resolution. It said that if the private alternative were selected, the payments to it would equal whatever would have been paid to Social Security.
It also said employees would be warned two years in advance of any reduction or termination of payments.
Salter, who filed the suit for teacher Elaine Gold and psychologist Amy Shaye, said their claim is simple: “This case is entirely about keeping promises.”
The school system countered in court that it had authority to cancel the payments at any time, without notice.