Article: Double-dip deadline [in NC] leaves some educators simmering on sideline

November 04,2005
By Diane Mouskourie
DAILY NEWS STAFF

More than 1,600 state employees across North Carolina joined 26 Onslow County educators in applying for retirement benefits before Oct. 1, the deadline for a major policy change.

Employees who retired before the deadline are eligible to be rehired at their old salary, at the same time collecting retirement benefits. However, they will be limited by an earnings cap of $24,420 or 50 percent of their last year's annual salary. They can meet that cap by working any combination of hours. If retirees want to continue working after they've reached their earnings cap they would have to come out of retirement.

After Tuesday, the policy changed so that state workers couldn't do that. Now, all state employees, including most school personnel, must sit out for at least six months before being rehired. The change was enacted by the General Assembly this past session.

Faced with the Oct. 1 deadline, 26 Onslow County Schools' employees made the decision to retire having been reassured they would be rehired.

The legal move has touched off a firestorm of debate over the issue of double-dipping. While school officials and educators say the move will save the school system money because those who retire forego their benefits, critics in the community say the practice simply isn't right, even if it's perfectly legal.

Their own money

Earl Taylor, a spokesman for the Onslow County Schools system, said the move will save the state $51,000 in health insurance premiums and $55,000 in state retirement contributions over the next six months.

"That's an immediate savings," he said. "We are able to maintain the same level of experience and skills without missing a beat."

Retirement funds for teachers, principals, most support staff and other administrators come from a retirement fund they contribute to through regular payroll deductions, 6 percent of their monthly salary, he said. The same is true for other state employees.

"Most of these retirees intend to work full time being mindful not to exceed their salary caps," he said.

But the recent rush to retire sparked questions, not only outside the school system, but within. Some school employees have complained that they were not informed by the policy change and could not take advantage even though they were eligible to do so.

Taylor said that wasn't the case.

"The change in the state retirement legislation was disseminated at the Aug. 31 principals' meeting and the Sept. 20 Educational Policy Committee meeting," Taylor said. "At both meetings, administrative and teacher representatives were charged with sharing the retirement information with staff members.

"Anybody who wanted to take advantage of the law was allowed to do so."

Taylor said several people in key decision-making positions made the choice to retire, but were not prepared to quit working. Replacing them could prove difficult.

"We already face a real challenge trying to keep up with the need for teachers, administrators, principals and central office staff," Taylor said. "You just don't graduate from college one day and move into the principal's office the next day."

The rehiring of retirees was contingent on approval by members of the Onslow County Board of Education. That OK was given unanimously at Tuesday night's school board meeting.

"They had a legal right under the law as it was written, and we couldn't refuse their re-employment," said Bob Gaskins, school board chairman. "We have people who have worked for us for 30 years plus, and they simply took advantage of a situation that was available."

He backed up those who retired and were then rehired. The practice, which was put in place by the state in 1998, helps keep qualified personnel on staff, he said.

"Many of these people have worked for years on small salaries, so it is a fine opportunity for them to take advantage of," he said. "There's not one of them we would want to lose. You can't lose that kind of expertise and not hurt the system."

Most people given the same opportunity would have done the same thing, he said.

"I just wish it was there when I retired," said Gaskins, who retired from teaching in 1989.

The future?

The extra time gives retirees time to transition from their current jobs while also providing the school system with time to train replacements - if necessary. No decision related to replacements has been made yet, said Barbara Newman, assistant superintendent of personnel services said. Those who retired could also unretire after meeting the salary cap and return to their regular salaries with benefits.

"We will analyze the needs for those positions," she said. "Those positions may be reclassified, or restructured, which means we would have to rewrite job descriptions and then advertise."

Newman said that regardless, all positions will be advertised using a variety of media including newspapers, professional publications, state and in-house bulletin boards and Web sites. However, Superintendent Ron Singletary has the authority to make personnel transfers within the school system however he deems necessary, she said.

In the interim, recent retirees may have to wait three or four months before they begin collecting their retirement benefits.

Because of the unprecedented number of retiree applications the Retirement Systems Division of the N.C. Treasurer's Office faces obstacles in processing them, said Ashley Memory, a spokesman for the treasurer's office.

Due to changes in the state's re-employment laws and the state's changing demographics, the state has received more than three times the normal number of retirement applications for the month of October, Memory said. As a result, some of the new retirees will experience a delay receiving their first benefit check.

Those checks will include payments retroactive to the individual's retirement date, she said.

"Though October 2005 represents an unusually high volume of retirements, applications will continue to increase as baby boomers reach retirement age," Memory said. "The Retirement Systems Division is committed to developing a solution to address this situation."