PEABODY — This spring, those hammering out the nearly $77.3 million school budget for the upcoming year faced soaring costs for health care, transportation and special education and they looked for creative ways to close a sizable revenue gap.

So Mayor Ted Bettencourt, the chairman of the School Committee, proposed an early retirement incentive program for teachers and some administrators as a way to save money in the school budget.

On Tuesday night, the School Committee voted 5-0 for an early retirement incentive plan for Unit B, a union which covers assistant principals, deans and other administrative positions. (Bettencourt and School Committee member Jarrod Hochman were absent for the vote, with Hochman leaving the meeting earlier in the evening before the topic was briefly discussed.)

The Unit B early retirement plan is a similar proposal to the one approved by the School Committee at its last meeting for Unit A of the Peabody Federation of Teachers, which covers teachers.

Discussion about early retirements in the schools comes as the education budget is set to go before the City Council’s Finance Committee sitting as the Committee of the Whole on Tuesday, June 18, in the Wiggin Auditorium of City Hall.

The early retirement incentive is a way to save money over several years as teachers who have been in the system for at least 20 years retire and are replaced with teachers who then would be paid at the lower end of the salary scale.

According to the Peabody teachers contract, for the 2019-2020 school year, a new teacher at Step 1 with a bachelor’s degree would earn a salary of $46,507, while a teacher at the far end of the scale with doctorate at Step 13 would earn $91,571. These salaries do not include longevity pay and stipends.

Peabody teachers would be eligible to take early retirement at 20 years of service, said Bruce Nelson, the outgoing president of the Peabody Federation of Teachers. Nelson said it was too soon to say how many teachers might take early retirement, as those who are eligible have a deadline of this Friday to decide.

“I see it as a good thing,” said Nelson. Teaching is very stressful, he said, and an early retirement incentive “gives people an opportunity to retire earlier and therefore avoid all of the stress, and they get a little bit extra money.” 

There are two tiers of retirement incentive packages depending on how long a teacher has taught.

The first tier would cover teachers with 20 to 24 years of service, and that service does not all have to be in Peabody schools. Those taking the early retirement package would be eligible for $15,000 paid out in three installments over three years, with retirements taking effect Sept. 1.

Each $5,000 installment would be made in December of 2019, 2020 and 2021, Nelson said.

The second tier would cover teachers with 25 years or more of service, with $20,000 paid out in three installments for three years.

Superintendent Cara Murtagh said in an interview the early retirement incentive for Unit B administrators would mirror the plan for the teachers. Murtagh said she did not know what the savings might be from early retirements. She would have a better idea in a couple of weeks. 

On May 29, the School Committee approved the schools’ nearly $77.3 million spending plan, which represents a $3.1 million, 4.2 percent increase from the 2018-2019 school year. The school board did so in time for the City Council to take up its budget for approval.

It took a lot of belt tightening, however, during several budget meetings to get the budget down to where it stands now. The increase had at one point stood at nearly 9 percent. Unforeseen cost increases for special education, transportation and health insurance were the biggest drivers of this increase.

The budget took into account contractual increases. It added special education positions and preserved elementary reading specialists, among other items. However, the budget also reduced 10 teacher positions, including a French teacher position at the Higgins Middle School, five elementary school teacher positions and four teacher positions at the high school.

Murtagh said whether a teacher who retires early is replaced would be based on enrollments and class size. It’s also possible that a teacher whose position was eliminated, could move into the classroom of a teacher who retires early.

The teachers’ contract states that class size cannot exceed 25 students in grades kindergarten through 2, and 27 students in grades 3 through 5. Each Middle School cluster is not to exceed 112 students, and at the high school, no class can exceed 30 students, according to the contract.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at or on Twitter at @TannerSalemNews.