MONTGOMERY, AL (WSFA) - The Deputy Director of the Retirement Systems of Alabama says there's no need for education employees enrolled in PEEHIP to panic regarding possible retirement.
Lawmakers passed changes to the Public Education Employees Health Insurance Program in June which has opened the possibility of some teachers and education personnel retiring in the middle of the school year.
"I don't think it's going to as bad as everyone thinks it is on the education side" said Reynolds.
PEEHIP participants have to decide if they want to retire by November 1, 2011 in order to be retired by December 1, 2011, so they are removed from the system before rate hikes begin in January 2012.
Reynolds contends that most plan holders will not be forced into early retirement. He says many will need only to work an extra year or so in order to make up any supposed losses from increased health insurance premiums.
"I really don't see a mass exodus if people do their research and homework" Reynolds said. I hope they will because it will impact them for the rest of their lives whatever this decision is."
He said those who have fewer years of experience but are older will be the most affected by the changes. Reynolds reiterated that individuals closer to 65 years of age with more than 25 years of service don't have much to worry about. It's the less experienced state workers, years wise, whom could see significantly higher rates.
Reynolds said, "Somebody that's age 60 with ten years of service, they're going to have to pay 35 percent more of the subsidy if they don't retire, and that's a lot of dollars."
But officials at the Alabama Education Association, the state's powerful teachers union with over 100,000 members, say the law has put many teachers into difficult situations.
"I won't call it a panic" said David Stout, a spokesman with the AEA. "In a way it's reform, but it's reform with a wrecking ball because what's happening in the class room is that many students are going to be left without teachers and teachers are having to leave when they don't want to."
Stout said there could be a crisis if possibly thousands of teachers decide to retire early due to the rising health costs. He said he's spoken with multiple superintendents about the issue and said many are concerned.
But Reynolds doesn't buy it. He said as long as participants do their homework and understand what their financial options are, many will opt to continue working for a short while.