Wednesday, June 30, 2010

STRS FLASHBACK - 7 Years Ago....'Well written contracts are hard to break!'

From John Curry, June 30, 2010
Cmon' Joe, give US a break!
If the STRS board fired Dyer tomorrow, he would walk away with a $533,620 check. Unless the board can prove “malfeasance, misfeasance or nonfeasance,” Dyer gets paid for the rest of his 61/2 -year contract, which ends June 30, 2005.
Joseph Endry, the only member of the board who is elected to represent retirees, wrote back, “Well-written personal contracts are very expensive to break. Be patient.”

STRS bound by costly contract
Canton Repository, June 29, 2003
By PAUL E. KOSTYU Copley Columbus Bureau chief
COLUMBUS -- Demanding that Herbert L. Dyer resign as executive director of the State Teachers Retirement System is one thing. Paying for it is another.
Herb Dyer
If the STRS board fired Dyer tomorrow, he would walk away with a $533,620 check. Unless the board can prove “malfeasance, misfeasance or nonfeasance,” Dyer gets paid for the rest of his 61/2 -year contract, which ends June 30, 2005.
If he resigns, he gets at least $133,405 because he must give STRS a six-month notice. That does not include pay for any unused sick or vacation time.
His contract gives him an incentive for awarding the STRS investment staff high bonuses regardless of how its investment portfolio does — the more bonuses they get, the more he gets.
Dyer has been under fire for three weeks for directing a pension fund that paid $15 million in performance bonuses and for artwork purchases and travel over three years. That was paid while the system’s investments plummeted by $12.3 billion and health-care contributions by retirees jumped significantly.
Privately, people in and out of the retirement fund are predicting Dyer will go, either on his own or because he will be forced out. One person said Dyer seems “more dejected” with “a different demeanor” than he normally projects.
But those who work with him say he remains in charge, goes about the business of the fund and has not talked about stepping down.
The chairwoman of the board, Deborah Scott of Cincinnati, has repeatedly and succinctly said, “Mr. Dyer is still the executive director.”
Marilyn Gibbs, a retired Plain Local Schools teacher, sent an e-mail June 12 to several people, including four members of the retirement system’s board. She asked, “I wonder if it’s time for someone to ask Mr. Dyer to resign.”
One board member responded.
Joseph Endry, the only member of the board who is elected to represent retirees, wrote back, “Well-written personal contracts are very expensive to break. Be patient.”
Asked to explain his message, Endry said, “It’s not that easy to break contracts. If Mr. Dyer is guilty of anything, it’s doing what the board wants him to do. He didn’t build this building.”
Among the criticisms of the retirement system is the spending on its posh, nearly $95 million headquarters in Columbus.
Dyer joined the teachers retirement system Jan. 1, 1993. He got a new contract in February 1997, and his current contract began Jan. 1, 1999. It was amended in April 2002.
Dyer’s contract calls for his pay to be adjusted annually based on the Consumer Price Index of the previous year or 3.5 percent, whichever is higher. The index has not been above 3.5 percent since 1991. Computations of Dyer’s base salary, however, show that his raises were actually above the 3.5 percent limit set by the contract.
In 2001, his base salary was $236,000 and rose to $256,260 in 2002, a $20,260 or 8.6 percent increase, according to STRS documents. It went up again this year to $266,810, which is a $10,550 or 4.1 percent increase.
Dyer also has received annual bonuses for meeting performance goals. His bonus is based on the weighted average of bonuses given to the STRS investment department multiplied by a percentage obtained from his annual evaluation.
In other words, the higher the bonuses paid to the STRS investment staff — whether the portfolio did well or not — the higher Dyer’s bonus.
For example, in 2002 the 110-member investment staff received $3.75 million in incentive bonuses for its work in 2001. The average bonus was $34,100. Dyer got a $41,052 bonus or 120.39 percent times the investment staff average.

Tuesday, June 29, 2010

NM dooms the double dip

Read it here.....
From John Curry, June 29, 2010

Dennis Leone explains 'Pick up of the Pick up'

From John Curry, June 29, 2010
Subject: Some of you (including myself) wondered what a pick up of a pick up is., I asked Dennis! Here's what he had to say:
"Okay -- I will do my best to explain the "Pick up of the Pick up." If a supt has a base salary of, let's say, $100,000, and the school board contractually agrees to "pick up" the supt's 10% STRS employee contribution (which would, of course, equate to $10,000) -- this means, in the eyes of STRS, that the supt's new total compensation is $110,000 instead of $100,000. Therefore, the STRS 10% requirement becomes $11,000 instead of $10,000.
The term "pick up of the pick up" means that the school board is agreeing to "pick up" both pieces -- the original 10% (i.e. $10,000 for a $100,000 base salary) plus the additional amount to cover what is considered to be the total new salary (i.e. 10% of $110,000). Hope this makes sense. If one thinks about, it's clever on the part of STRS to make sure it obtain total contributions, which would occur if someone receives a bonus. A "pick up" is truly the same as a bonus. In my eyes, STRS is doing the right thing in this area."
Dennis Leone

Would someone like to inform Sen. Schuring of CORE's answer to his solution for protecting retirees while addressing double dippers?

From John Curry, June 29, 2010
CORE has floated the idea to protect the current 3% COLA for the first $30,000 of pension moneys and then 0% for every dollar over that 30K amount. That way, the six-digit double dippers aren't protected but those retirees who are on small retirement incomes are protected. Craig Brooks has floated this idea to the board and it fell on deaf ears....will Sen. Schuring also have a deaf ear on this issue. John
“We need to reform Ohio’s five retirement systems, but we need to protect typical retirees as much as we can,” Schuring said Sunday. “I’m very concerned about the way this double dip has evolved over time. It’s more than being hired twice for the same job, they are more than doubling their income. Many people today retire and continue to work but not in the same capacity and not see a doubling of one’s income as a result. That’s what is causing the issue.”
Pension reform ahead over double dipping
Canton Repository, June 29, 2010
By Melissa Griffy Seeton staff writer
State Sen. Kirk Schuring, R-Jackson Township, acknowledges lawmakers have a lot of work to do before a pension reform bill is introduced later this year.
As a member of the Ohio Retirement Study Council, Schuring said the council will address the state’s double-dippers while protecting retirees who aren’t pulling in six-figure salaries and pension benefits that average $80,542 a year.
“We need to reform Ohio’s five retirement systems, but we need to protect typical retirees as much as we can,” Schuring said Sunday. “I’m very concerned about the way this double dip has evolved over time. It’s more than being hired twice for the same job, they are more than doubling their income. Many people today retire and continue to work but not in the same capacity and not see a doubling of one’s income as a result. That’s what is causing the issue.”
An Ohio News Organization (OHNO) survey found more than a quarter — or 27 percent — of school superintendents are rehired retirees. These educators are able to begin collecting pension benefits in their early 50s and continue collecting their regular paychecks.
The OHNO study found that while school superintendents earning $100,000 make up less than 2 percent of all rehired retirees, they receive the highest pension benefits: An average of $80,542 a year.
Of Stark County’s 17 public school districts, three have rehired retired superintendents: Jackson Local, Cheryl Haschak; Northwest Local, William Stetler; and Tuslaw Local, Alan Osler. All are making more money than when they retired more than seven years ago.
Stark’s other double-dipping superintendent retired 10 years ago. Larry Morgan, the 68-year-old superintendent of the Stark County Educational Service Center and the R.G. Drage Career Technical Center, brings home a salary of $149,689 — $23,504 more than he was making when he retired.
These local superintendents say they are only following the rules of the State Teachers Retirement System of Ohio. STRS’ current formula for retirement encourages career teachers and administrators to tap the pension fund in their 50s. Otherwise, they are likely to receive far less in both their working careers and retirement.
Michael Nehf, executive director of the STRS, wrote in a letter to the Ohio News Organization, that the state retirement board agrees pension reform is needed.
“Educators must work longer,” he said, adding that the board submitted a plan to the Ohio Retirement Study Council last year proposing a number of changes. Among them: Increasing the service required for retirement to 35 years.
Steven Jones of Canal Fulton is not convinced reform is needed to address double-dipping superintendents. Jones sits on the Northwest Local and R.G. Drage school boards, both of which have voted to rehire retired superintendents.
“A very high number of public employees are rehired following retirement,” Jones said. “It is not a practice that is restricted to educators, but, unfortunately educators get a bad wrap on this. It is now hammered out on school boards that we are the bad people for hiring them, but we are going right along with the law.
“My feeling is you get the best person for the position. I don’t see why it should make a difference whether they were retired or not.”

Monday, June 28, 2010

Good news for those who like to see the BS exposed!

From John Curry, June 28, 2010
If you ever surf to you'll appreciate the candor with which this organization (along with, and ferrets out political (BS) statements and exposes them to the public. All of these organizations have slammed candidates from both parties so...they are an equal opportunity offender (to the candidates telling falsehoods, that is). All a candidate has to do is to tell a little white lie to earn a "false" rating or, even worse, a whopper of a lie to earn a "Pants on Fire" rating.
Stay tuned as it looks as if Ohio will rate a special section (as have a few other states) with this website as evidenced by my conversation below with the editor of the St. Petersburg Times, the father of!
P.S. Now, if we could just get Politifact to cover STRS board meetings! Do you have any candidates to nominate?
From Bill Adair, June 28, 2010
Subject: Re: Truth-o-meter coming to Ohio?
Thanks, John!
Stay tuned! We'll have something to announce in Ohio in a couple of weeks!
Bill Adair
PolitiFact Editor and Washington Bureau Chief St. Petersburg Times
PolitiFact: Journalism that tells the truth
From John Curry, June 28, 2010
Subject: Truth-o-meter coming to Ohio?
A request. I'd like to invite to visit Ohio with their truth-o-meter. We have an exciting governor's race with lots of bull being slung. I extend an invitation to you and your great organization to visit us and ENLIGHTEN US.
Thank you,
John Curry
P.S. Keep up the good work.

OFT: A good explanation of the DB pension vs. the DC pension

Discussion: Superintendents who return to work

From Molly Janczyk, June 28, 2010
I am addressing the persons who 'retire' on a Friday to go back to their same job on Mon with a purposeful intent to milk the system.
From Dave Speas, June 28, 2010
Hello all,
We just got through interviewing and hiring a new superintendent. We found out that there are 50 districts in Ohio without superintendents and they will have to hire retirees or hope more people want to enter the field. All of the superintendents we interviewed have jobs and I felt wanted to move from problems their districts face. The one person eligible in our district did not want the job because it would be his first superintendent's job and does not feel he is ready for it with all the problems to be faced in the coming years. We hired him as an assistant superintendent with the plan that our new rehire will mentor him so he can become our superintendent. He has taught and been a principal in our district and is highly thought of by us and the citizens.
Our board instructs our administrators to hire the best teachers for the job no matter the years of experience and we pay them their full years of experience and do not limit it to ten years. Our philosophy in this district is to put the very best educator in place for our students. Although I do not support rehires on a general basis, I feel if a rehire is the best person for the district educationally, that is who we should hire. I get tired of the press telling us that we do not do what is best for our students in public education and whether there is or is not an appearance problem, it is our job to give our students and our taxpayers the best educators our money can buy. The educational well-being our our students should be and is our number one criteria when making district decisions.
When the state gets its act together, when we have enough superintendents to go around, when the problems we face do not take an experienced hand to guide us through the pitfalls, and when talented people really want to be leaders of school districts, then the problem will disappear. We have cut 1 million dollars from our budget in the last two years and are facing a 1.6 million deficit by 2012. Even if we pass our levies as renewals, we will still be 1.6 million in the red. This means RIFS, possible closing of buildings, changing and reducing curriculums, going to long distance learning, or passing replacement levies. Any district worth its salt will want an experienced hand at the helm in these circumstances.
It is my opinion that each school district must look at its own needs, measure those who apply, and make the decision that is best educationally and financially for that district. Boards, administrators, and staffs are facing great problems and it is not possible, as with most things, to make a blanket statement that covers every situation in today's educational climate. As those of us who face cancer or other serious medical problems would rather go to a proven surgeon or specialist instead of an inexperienced one, some districts need the guiding hand of a proven educational professional to get the job done. As we rehire physics teachers and other hard to find teaching areas so we can give our students the best education opportunities, the same must be true when evaluating administrative positions for the times in which we live.
With respect,
Dave Speas,
50 year educator, taxpayer, retirement fixed income recipient, and public school board member
From Molly Janczyk, June 27, 2010
I agree completely! To retire on Friday and be rehired for the same position is milking the system. It is NOT like retiring and going out and finding a different type of work or subbing or even coming in at entry level in an education related field. Whether legal or not, cost effective or not, what the Board cannot seem to comprehend is "APPEARANCES ARE EVERYTHING!" It looks bad, and does cost more than hiring new qualified employees that many private companies do to reduce costs. It is NOT the same as military finding employment elsewhere. It is designed to make oodles of money for the rehires which few of us can every attain and most private employees can never attain. Finding ways to milk the system does speak well for educators and does nothing towards helping with legislation-in fact it helps defeat it.
This practice should be voluntarily eliminated BEFORE legislation!!!!
From Dennis Leone, June 27, 2010
While it is true that retired supts who are rehired can be re-employed at a lower base salary, there still are fundamental problems that many have:
1. First and foremost is the issue that for 30-35 years, the taxpayer has been paying into the educator's retirement system to prepare him/her for retirement after a certain number of years. When STRS was established in 1928, it was NEVER contemplated that a person would, in effect, say: "Thank you for very much, taxpayer, for paying into my retirement system......I am going to access that retirement now, but still require you to keep contributing to my retirement system for a future annuity because I wish to keep working." This never would have been allowed had lawmakers knew originally in 1928 that some would "use" the system to do this.
2. Like teachers, how will we bring "new blood" in the ranks of the supt business if we keep rehiring retirees? The worst part about rehiring retired teachers is that it has caused supts and principals to become lazy and not even consider looking at a new teacher, considering her credentials, interviewing her, etc. It is so much easier to instantly rehire the retired Mrs. Smith to teach 3rd grade. This is destructive to our profession in the long run. How many times will it take a quality first year teacher to be passed over for a retiree before she gives up and says: "That's it, I am leaving education."
3. The local district still must pay an annual 14% contribution to STRS for a rehired retiree, his/her required workers' comp payment, and his/her required Medicare contribution. For a rehired supt who is being paid $100,000, these benefits will cost the school board (and the taxpayers) $16,450 annually
4. STRS will no longer allow a rehired retiree to use the STRS health insurance plan (my motion that was adopted on a split vote in 2008). A family health insurance will cost the school board (and the taxpayer) between $10,000 and $13,500 per year.
I guess I am of the opinion that if a school board disagrees with my #1 and #2 above, then they should make all rehired retirees (except substitute teachers who are retired) pay for the costs associated with #3 and #4 above. My take for what it's worth.
Dennis Leone

School officials say Donatone a good deal
Star Beacon, June 25, 2010
ASHTABULA — More Ohio school districts are hiring retired educators, allowing them to earn salaries while collecting their pensions.
On June 21, Ohio’s major daily newspapers ran a story about these re-employed retirees, especially pointing a finger at superintendents who retire and then return to work.
The Star Beacon took a portion of an Associated Press article and used it to write an editorial in the next day’s paper.
Publisher Jim Frustere said the Star Beacon didn’t check its facts before stating an opinion.
“It’s expected that when a newspaper is going to voice an opinion on an issue, it should have all the facts and a clear understanding of the issue,” he said. “We failed to do that in our editorial on June 22. It was not accurate, and we regret that our editorial was misleading.”
Contrary to the June 22 editorial, when it comes to the Ashtabula Area City Schools District, hiring retired Superintendent Joseph Donatone was a good dollars and cents deal for taxpayers and the State Teachers Retirement System, district treasurer William Hill said.
Donatone, as do all other Ohio STRS members, pays 10 percent of his salary to STRS, and the employer pays 14 percent of total teacher payroll, in lieu of paying into Social Security, for a total of 24 percent, said school district treasurer William Hill.
Donatone will get 17 percent at retirement; STRS will keep the other 7 percent, Hill said.
“That’s a good deal for STRS,” Donatone said. “I’m not costing anybody anything.”
Ashtabula school board pays health-care premiums for Donatone only, not a family plan, a cost savings compared to what it mostly likely would have to pay with another superintendent.
Ohio STRS has made adjustments to help ensure that re-employed retirees do not negatively affect the pension fund or the separate health-care fund. These adjustments include no longer providing primary health care coverage to rehired retirees and also making the payout after a second retirement cost neutral to the system. Re-employed retirees and their employers also pay the same amount in contributions as do nonretirees.
Donatone, who makes less than $100,000 a year, said he never has received a raise and never asked for one since coming to Ashtabula.
Donatone retired at 57 from Buckeye Local School District and was nearly 58 before Ashtabula school officials persuaded him to accept the superintendent’s position.
Newspapers also reported Ohio’s school districts are top-heavy in administrative costs. Ashtabula Area City Schools District is the biggest district in Ashtabula County, and yet it’s below the state average in administrators and administrative costs, Hill said.
Donatone said he came to Ashtabula to help the district ease into the new schools and help boost test scores.
Students moved into Lakeside Junior High School last year with great success and lots of fanfare. The new elementary schools will begin opening in fall 2011.
Contrary to the June 22 editorial’s headline, which stated that rehiring retired educators hurts students, Ashtabula’s test scores skyrocketed this year, according to the Ohio Department of Education’s Web site.
The preliminary results are in, and Plymouth Elementary received an “excellent” rating again; State Road Elementary, “excellent”; McKinsey Elementary, “effective”; Thomas Jefferson Elementary, “effective”; Saybrook Elementary, “effective”; Lakeside High, “effective”; Lakeside Intermediate School, “continuous improvement”; and Lakeside Junior High School, “continuous improvement.”
These scores mean that four of the district’s schools improved in 2008-09, Donatone said.

Sunday, June 27, 2010

STRS Flashback - 7 Years Ago - The Day the Governor Called Off the Inspector General!

From John Curry, June 27, 2010
“Is (Montgomery) going to audit herself?” Leone said. “How can they deal effectively with an issue on a board they serve.”
Canton Repository, June 27, 2003
Taft says no to probe of STRS by inspector
By PAUL E. KOSTYU Copley Columbus Bureau chief
COLUMBUS — Gov. Bob Taft shut down an investigation of the State Teachers Retirement System by vetoing budget language that would have allowed the Ohio inspector general to pry into the practices of pension fund boards.
The governor’s veto did not sit well with Sen. Kirk Schuring, R-Jackson Township, who had asked Inspector General Thomas Charles to investigate STRS in light of reports in the past three weeks about excessive spending on salaries, bonuses, artwork purchases and travel.
Charles, who had pushed to have the language inserted in the budget, was preparing to start an investigation Tuesday, when the budget goes into effect. Taft said the retirement systems already are subject to Ohio ethics laws and oversight by the Ohio Retirement Study Council.
But Schuring called those oversight functions “empty and hollow,” and suggested that the governor “better read the statute.”
Dennis Leone, who dug into the spending habits of the STRS board and its executive director, Herbert L. Dyer, was scheduled to meet with Charles next week to brief him on what the Chillicothe superintendent discovered. Charles began collecting information by attending a press conference Wednesday of lawmakers who have demanded Dyer’s resignation.
“I hope they don’t sweep this under the rug,” Leone said.
Charles said “officially” he stands by an earlier statement that his office “could provide needed oversight to the pension systems.” He would not comment further. Leone said Charles told him just days ago that he expected Taft to keep the oversight language in the budget bill.
Schuring said he may ask Ohio Auditor Betty Montgomery and Attorney General Jim Petro to conduct investigations of STRS. He also said he will consider legislation to give the retirement study council more power to control pension boards.
Leone said Montgomery and Petro may face conflicts of interest because both are members of the retirement board.
“Is (Montgomery) going to audit herself?” Leone said. “How can they deal effectively with an issue on a board they serve.”
Laura Ecklar, a spokeswoman for STRS, said the system did not lobby Taft to veto the budget language. She said STRS officials maintain there is legislative authority now “to look at everything that has to do with the pension plans.”
Taft said he would work with lawmakers to “provide additional, reasonable oversight and enforcement tools” to the council.
“I’m disappointed with the governor, given the current state of affairs at STRS,” Schuring said. “Considering the waste, fraud and abuse, the inspector general would have been perfectly suited to do an investigation.”

STRS...take a hint from the Land of Enchantment!

From John Curry, June 27, 2010
Leaders of the next New Mexico Legislature, by the time they convene in January, should have drafts of pension reform prepared. Interim committees, in consultation with financial and actuarial experts, including public-employee union representatives, must offer a new system: One that doesn't change rules in the middle of the game for longtime workers and contributors to the public-employees retirement fund -- but which sets a steeper ladder for new hires.
New Mexico's public-worker pensions overdue for reform
The Santa Fe New Mexican, June 27, 2010
We've come a long way from the not-so-long-ago days when our working people, who carried American progress on their shoulders, labored to the edge of their deathbeds. With the New Deal came the Social Security Act of 1935 and a retirement-insurance program allowing people to leave work at 62 or 65 with a low monthly income for the rest of their lives.
All too often, that wasn't very long: People tended to drop like flies in their 70s. Government-employee organizations led efforts at lowering retirement age or pegging it to a minimum number of years in service -- all the while looking enviously at the generous terms offered to career military, police and fire folks.
With salaries often lower than those of the private sector, the civil servants proved persuasive with management and the legislative bodies administering taxpayer money: In much of the country, many have been collecting retirement incomes with fewer than 30 years on the job. If they were hired out of high school, that meant a big percentage of their old salary when they decided to stay home -- or start another job -- in their late 40s.
At the same time, we're living longer -- at the expense of the pension funds to which we've contributed, but which might spend much more on us than we put in.
Long lives and early retirement are a wonderful combination. But it's long past time to ask: How long can we keep handing out such largesse -- especially the portion of it paid by taxpayers?
Congress caught onto that notion a few decades back -- and has been raising the Social Security retirement age toward 67. State governments, however, have been slower on the uptake. That includes New Mexico, where only last year did our legislators give government retirement a serious look. They focused on "double-dipping" -- and that's a start.
But now that our state pension funds are feeling Wall Street's economic pain, not to mention that inflicted by one crook or another, governmental finance leaders should be looking around the country -- at what their counterparts are doing in public-employee retirement reform.
Even as states cope with the potentially disastrous present, they're aiming at the future -- which is the fair way to do it.
In Illinois, for example, newly hired workers -- such as there are in these belt-tightening times -- no longer will be able to retire as early as 55: Henceforth it's 67. New York, Arizona and Missouri, among others, are working on longer-career demands. In Michigan, employee-contribution levels have been raised.
Leaders of the next New Mexico Legislature, by the time they convene in January, should have drafts of pension reform prepared. Interim committees, in consultation with financial and actuarial experts, including public-employee union representatives, must offer a new system: One that doesn't change rules in the middle of the game for longtime workers and contributors to the public-employees retirement fund -- but which sets a steeper ladder for new hires.
Since the state supposedly has a freeze on new employment, this might be the opportunity it needs to at least propose pay scales competitive with the private sector -- and some already are, since salaries and benefits in certain businesses and professions can be pretty pinche.
Lawmakers should, as the economy allows, erase today's reasoning that poor pay justifies early and good retirement. When a state worker can retire after 27 years at 80 percent of his or her highest salary, that's not just generous; it's unsustainable. Until such time as we achieve the "affluent society" envisioned by some economists half a century ago, we can't offer wholesale retirement at increasingly tenderer age. Such humane thinking -- and acting -- has taken its toll on the world's welfare nations, not to mention a growing number of states.
In New Mexico, public employees already are carrying a heavier burden of the economic downturn. Morale can't be great -- and could get worse if pension reform creates two classes of worker. Just the same, such reform is overdue.

Let's see......STRS owns 10.9 million shares, right?

From John Curry, June 27, 2010
BP's Eventual Bankruptcy Is Certain, June 25, 2010

Lima News: Put an end to double dipping

From John Curry, June 27, 2010
The Lima News [editorial], June 27, 2010
'Savings' from rehiring retired school employees costs taxpayers more
Several ways have been proposed to address the problems that come with “retire-rehire.” Those proposals all have merit, but the only real solution is to disallow the practice entirely.
How the retirement system for teachers works doesn’t usually interest most people. However, the State Teachers Retirement System is $40 billion in the red, and those running it want a taxpayer bailout. Lawmakers already are likely to take more of your money to close the $8 billion hole in the state budget, and now they’re being hit up for another $40 billion?
Investment losses and the growing number of educators who are collecting retirement for longer periods have led to the dilemma. Little can be done about past investment losses. But addressing the practice of rehiring administrators and teachers is a must.
More than 25 percent of Ohio’s 614 school districts have superintendents who are collecting full retirement benefits, The Columbus Dispatch reported last week. The State Teachers Retirement System has more working retirees than any other state system. Ohio again leads the nation in soaking taxpayers.
Advocates call the practice “retire-rehire.” Critics call it “double-dipping.”
Whatever you call it, districts save money by rehiring superintendents (or teachers) at a lower wage. Educators come back — often without ever leaving — for less pay because they are getting full-time retirement benefits. But educators who retire early no longer contribute to the State Teachers Retirement System, yet they pull millions from the fund. And the system has $40 billion in unfunded liabilities its leadership wants Ohio taxpayers to pick up.
Remember that state and local taxpayers already contribute the money that pays local administrators and teachers as well as the generous amount of money districts contribute to their retirement fund. Taxpayers shouldn’t have to give any more to this fund.
Lawmakers and the State Teachers Retirement System itself have offered three Band-Aids in recent years to an ever-gaping fiscal wound.
The State Teachers Retirement System proposes requiring public employees work at least 35 years or to age 60 with 30 years of service, or they’d face significant benefit cuts. It also wants to reduce a cost-of-living adjustment from 3 percent to 2 percent.
State Rep. Bruce Goodwin, R-Defiance, and then-Rep. Michelle Schneider,
R-Madeira, introduced separate bills in 2007 that, respectively, make double dippers take 40 percent pay cuts and wait six months before returning to work. The Legislative Service Committee could not determine with either bill whether double dipping costs taxpayers any money.
It should be clear now that they could cost Ohio taxpayers $40 billion. That is unacceptable. The solution is to stop the practice of rehiring retired employees. We understand districts want to save money, and it’s legal to do, but taxpayers once again are going to be on the hook for this mess. Lawmakers should see to it that this no longer can happen.
Larry KehresMount Union Collge
Division III
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