SIGNIFICANT WIN FOR
DEKALB SCHOOL EMPLOYEES
COVERED BY THE TAX SHELTER
Contact GAE ASAP!
Your GAE UniServ Director (UD) is trained to
provide you with the assistance you need.
Your UD can put you in contact with our
attorneys — specialists in educator defense.
Find contact info for your UD at
DO YOU HAVE A
LEGAL QUESTION FOR
OUR RESIDENT EXPERT?
Email your question to
Please include your name, contact
information, and GAE membership number.
We’ll get back to you as soon as possible.
For urgent matters, call GAE at 800-282-
7142 or 678-837-1100 (local) or contact
your GAE UniServ Director.
The information provided is intended only as a general guide
to employment rights of Georgia educators and is neither
complete nor intended to provide legal advice on a particular
The Georgia Court of Appeals ruled the lower court erred on the issue of liability for breach of
contract on the two-year notice provision when, in 2009, the school district stopped funding
contributions for this retirement benefit without providing the required notice. This means
the school district is liable for breach of contract. The ruling also means that all employees
impacted by the 2009 decision should be certified as a class action. The main question left
unresolved is one of damages.
The original lawsuit, filed in 2011 by Gold and school counselor Amy Shaye, contended the
school district breached an agreement that said district officials would give employees two
years’ notice before reducing contributions to the Georgia Tax Shelter Annuity Plan. Instead,
the school district suspended contributions abruptly in 2009, citing a budget shortfall after a 3
percent state reduction in funding for all Georgia school systems. DeKalb would lose $20 million
in funding in that reduction.
The district had annually contributed 6 percent of a participating employee’s salary. During the
2009-2010 school year, DeKalb was scheduled to pay $26.5 million into the plan. If it is found
to be liable for that much for each year since, the district could be responsible for about $240
million, about a quarter of its annual operating budget. District officials are working to approve a
$1.1 billion budget by the end of June. The district currently has $120 million in its general fund
The annuity plan, established in 1979, was an additional benefit to educators and a Social
Security alternative. The fund is separate from the state retirement fund and is paid into
individual employee accounts, not taxed until withdrawn.
Important for all GAE members is the Court of Appeals found the school board policy and its
two-year notice provision became part of the employees’ employment contract. “We did not
stand idly by when the trial court suggested that school board policy is somehow not the law of
the school district,” said Mike McGonigle, legal director for GAE. “That is why GAE filed a “friend
of the court” brief to support the fundamental idea that school board policies are legally binding
on the school district.”
Walker, Marlon A. (2018, June 6). Retrieved June 27, 2018 from https://www.myajc.com/news/
16 | KNOW • Volume 16 Issue 2