BY AMY FLOWERS UMBLE

New Stafford County Schools employees face a steep increase in retirement benefits costs.

The School Board voted Tuesday night to cushion that blow by offering stipends to new employees who stick with the division until next May 1.

Under statewide changes to the Virginia Retirement System, Stafford County Schools employees must start contributing at least 1 percent of their income to the state benefits program in the upcoming fiscal year. Employees must contribute 5 percent of their income to VRS by 2016. And school divisions are required to give employees an equivalent raise.

But new employees must start contributing 5 percent in the upcoming year. School divisions are not required to give them a full 5 percent raise to cover this cost. In fact, Stafford's School Board learned last week that if they boost new employees' pay by 5 percent, then the most recent hires would have better benefits and be better poised for retirement than longtime workers.

So the School Board instead opted to give annual stipends to cover the increased VRS requirements.

Based on the assumption that there will be about 275 new employees, the stipends would cost $384,000.

However, Stafford County Schools could actually save money. Right now, the school division pays the employees' portions of the VRS costs. Because the new hires would pay their own portions, the schools will save $485,000.

Even when factoring in the cost of offering stipends, the schools will still save about $100,000.

However, there are other costs associated with the new VRS requirements, including Social Security, health insurance and other benefits. So overall, the new requirements will cost the school division $359,000.

The School Board also voted to give a 1 percent raise to part-time employees, who don't contribute to VRS. These employees didn't see a boost in pay under the most recent raises, which were step increases. It will cost the school division $23,000 to give these raises.

Amy Flowers Umble: 540/735-1973
Email: aumble@freelancestar.com