Thursday, December 2, 2010

DDN... Double-Dipping hurts pensions

Letting school bosses “retire” hurts pensions
By the Dayton Daily News
Thursday, December 2, 2010

The Kettering school board has a bad way with timing.
Back in the summer, the board was getting ready to place a tax levy on the ballot asking voters to approve new money or face deep cuts. At the same time, the board placed on its own agenda a plan to allow Superintendent Jim Schoenlein to retire and then be immediately rehired.
That plan was quickly scrapped, for “more study.” Obviously, cutting a special deal to allow the superintendent to collect significantly more pay just before seeking a levy wasn’t great politics.
Now — not even a month after the levy was passed — an identical retire-rehire plan for Mr. Schoenlein is back on the board’s agenda. There has been no special public announcement or invitation for Kettering residents to share their thoughts about the plan. No study has been presented.
But the board is now in the clear politically to give Mr. Schoenlein what he wants and keep him as superintendent in his “retirement.”
This practice is controversial. Superintendents like Mr. Schoenlein really can’t be blamed for wanting to double-dip. It’s legal and allows them to make much more money — drawing both a salary and a pension — while, perversely, even saving their school districts money if they accept a lower salary as part of the deal.
The district treasurer estimates allowing Mr. Schoenlein to retire and then rehiring him at a lower pay will save the district $40,000 a year, even as Mr. Schoenlein will likely see a healthy bump in his take-home pay.
But here’s the problem: The retire-rehire practice is so rampant among superintendents in Ohio it can only be harming the already fragile state of the State Teachers Retirement System.
Earlier this year, reporting by eight Ohio newspapers, including the Dayton Daily News, showed a quarter of Ohio’s 613 superintendents are double-dipping. This simply can’t have positive effects on the teachers retirement system, which has $40 billion in unfunded liabilities and is in desperate need of big reforms.
The retirement fund is being hit hard by escalating costs of health care coverage, which the system is not required to offer, but decided to decades ago in good times. The fund was also hurt by the deep stock market decline in 2008.
Pension rules add to the problem when they encourage people to retire sooner and start withdrawing from the fund, instead of paying more over a longer career before taking withdrawals.
Such rules also send the message that nobody in power is serious about fixing the system, certainly not at the expense of restraining executive benefits.
Meanwhile, it’s not fair that superintendents and a handful of other top administrators get to benefit from these sweet deals when teachers and others generally don’t. Kettering, for instance, has four others who have retired and been rehired; only one — a guidance counselor — is a full-time, front-line educator. None are classroom teachers.
When districts like Kettering look out for their own interests and cut special retirement deals with a few favorites, they contribute to perils facing the pension system.

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