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Peter C. Phillips, a Salem-based attorney for the Keene School District, argues Tuesday before the N.H. Supreme Court in a pension dispute between the district and its teachers union.

CONCORD — New Hampshire’s top court is set to weigh in on a long-running dispute between the Keene School District and its teachers union over whether the district unlawfully reduced the pensions of retired educators.

The state Supreme Court heard arguments Tuesday in that case, which the district brought earlier this year after a third-party arbitrator found it had violated a collective-bargaining agreement with the union by delaying early-retirement payments.

Some justices were skeptical, though, of arguments offered by Peter C. Phillips, the school district’s Salem-based attorney, that the arbitrator had exceeded his authority by concluding how a state retirement agency should calculate public employees’ pensions. Associate Justice Gary E. Hicks was among those who also challenged Phillips’ claim that because the district had delayed paying the early-retirement stipends for years without complaint, it had become accepted practice.

“What difference does that make if it’s been wrong a hundred times?” Hicks asked.

The pension dispute dates to April 2019, when two Keene School District teachers — Randall Burns and R. Scott Hyde — filed a grievance with the district over its decision to wait until several months after their retirements that July to pay their early-retirement stipends.

The N.H. Retirement System calculates teachers’ pensions by averaging their three highest-earning years. After an employee’s last year of work, any final bonuses or early-retirement incentives must be paid within 120 days to be added to that year’s salary and factored into pension calculations.

By delaying the early-retirement stipends for Burns and Hyde — who taught at the Cheshire Career Center and Keene High School, respectively — until November 2019, after that 120-day window, the duo argues that the district intentionally lowered their lifetime earnings. That cost both men approximately $100 per month for the entirety of their pensions, they’ve said.

The school district, which told Burns and Hyde in late 2018 it was delaying their early-retirement stipends so those earnings wouldn’t incur mandatory NHRS wage deductions, has denied their allegations. In their grievances, however, the former teachers said they feel that decision was instead made to avoid employer-required contributions into the state retirement system.

The district has said in court filings that no teachers who received early-retirement stipends between 2005 and 2018 — including 43 who were paid more than 120 days after their departure — complained about that practice.

District officials and the Keene Education Association asked an arbitrator last year to determine whether the district had violated their collective-bargaining agreement by waiting until November to start the early-retirement payments.

James S. Cooper, a Boston-based arbitrator, ruled in the union’s favor in April 2020, concluding that the district had misapplied the terms of that agreement. In his ruling, which The Sentinel obtained via a public-records request, Cooper said Burns and Hyde should be eligible to petition NHRS for corrected pension earnings.

“The School District was avoiding its contribution and diminishing the retiree’s retirement benefit,” he wrote.

The district subsequently appealed that decision to Cheshire County Superior Court, arguing that Cooper had ruled incorrectly and issued a judgment beyond the scope of its arbitration request. Superior Court Judge David Ruoff rejected those claims last January, however, prompting the district’s appeal to the Supreme Court.

Phillips, the school district’s attorney, said during oral arguments Tuesday that retiring teachers had known since the 1980s how the district handled its early-retirement stipends and had never complained.

“At some point, the district has to be able to rely on how it’s doing things,” he said.

But Esther K. Dickinson, a Concord-based attorney for the teachers union, questioned that logic during the proceedings, which were held in person and also broadcast online. Dickinson said the collective-bargaining agreement with the district clearly states that Burns and Hyde were owed those stipends immediately after they retired — regardless of past practice.

“What’s really truly unfair here is that these retirees, through the district’s conduct, are going to lose out on about $100 a month for the rest of their lives,” she told the justices.

Phillips declined via phone to comment on the school district’s case Tuesday afternoon, citing the pending litigation. A decision from the Supreme Court is not expected for months.

Union President Bill Gillard said Tuesday afternoon that four other teachers given early-retirement stipends since the pension dispute began have filed similar grievances with the district.

And former teachers who also earned those benefits may ask NHRS for corrected pensions if the arbitrator’s decision is upheld, according to Gillard, a math teacher at Keene High School. That may put the district — which could owe employer-mandated contributions on past employees’ revised earnings — on the hook for a large sum, he said.

“It’s difficult to estimate exactly what the financial exposure is,” he said. “… If the district is willing to try and find some technicality [in the arbitration case], there has to be significant financial liability.”

Caleb Symons can be reached at 352-1234, extension 1420, or csymons@keenesentinel.com. Follow him on Twitter @CalebSymonsKS.