DDN editorial staff poses retirement questions.....

From John Curry, June 21, 2010

http://www.daytondailynews.com/blogs/content/shared-gen/blogs/dayton/opinion/entries/2010/06/20/editorial_doubledippers_invite.html?cxtype=feedbot

Editorial: Double-dippers invite voters to rise up

By the Dayton Daily News
June 20, 2010

Ohio can’t have rules that allow select groups of public employees to reap huge financial benefits while contributing to their pension funds’ slide toward insolvency.

The problem is especially worrisome in the State Teachers Retirement System. The argument does not hold up that it’s OK for a school superintendent to make as much as a quarter of a million dollars a year by “double-dipping” because it isn’t hurting anyone.

The practice legitimately infuriates the public — the very voters who are asked to raise their taxes for schools. Taxpayers are appalled that administrators can retire in their early 50s, begin collecting a pension, and stay in their old job at a reduced salary or sometimes earning more than before they retired.

This defies the definition of “retirement.”

Meanwhile, public pension funds are in trouble. The fund managers who represent government employees have actually proposed a bailout requiring taxpayers to kick in even more toward their retirements. Not going to happen.

A decade ago, the legislature changed its rules to make it easier for educators to retire and continue working. The result is lavish rewards for lucky superintendents.

A study by a coalition of Ohio newspapers, including the Dayton Daily News, showed a quarter of Ohio’s 613 school superintendents are double-dipping.

But what’s good for some superintendents is, in the long run, harmful to every educator who hopes to someday draw a pension. The teachers’ fund has $40 billion in unfunded liabilities.

Several factors are precipitating the pension funds’ problems. The big ones are health-care costs and the economy. Pension funds did not initially provide retiree health care; but in good times 40 years ago, health benefits were added. Now exploding costs are eating away at the funds.

That problem has been compounded by huge investment losses stemming from the stock market downturn. The state, facing a multi-billion dollar budget deficit next year, can’t and shouldn’t offer help.

Meanwhile, the sweetheart deal superintendents and some others get is far sweeter than what most teachers can hope for. Some districts don’t permit teachers to double dip. Others penalize them with lost seniority or much lower pay.

Why the double standard if this practice is legitimate and — as some insist — not a financial drag?

You can’t blame the superintendents for taking the deals. They’re jumping at the chance to double dip because they’d be crazy not to.

What they don’t acknowledge, however, is that the practice is becoming so extensive it has to be having negative financial implications. When people have every incentive to retire early — and thus will pay into the system for shorter periods and collect pensions for longer periods — that hurts the plans’ bottom line.

For sure, Ohio’s rules are out of whack. Why would we want people to retire prematurely, make out like a bandit and then stay on the job because they’re making so much double-dipping that they can’t afford to quit? How is that a good thing for the young up-and-comers in teaching and public service?

Shutting down double-dipping won’t make the state pension funds’ problems go away. It’s a small piece of a multi-pronged issue. But a small percentage of people are exploiting rules in a way that could ruin a good thing for the vast majority of government employees. They must be stopped.