Prepared Notes for Board Meeting – Retire/Rehire

July 27, 2009

Marc A. Schare

614 791-0067

marc9@aol.com

Tonight, I wanted to make some comments about the practice of retire/rehire. We have two administrators taking advantage of this opportunity tonight and we have a public meeting for two teachers. I’ll address these two issues separately, but before doing so, I want to make it crystal clear that these remarks have nothing to do with the individuals. We as a board need to adapt a policy with regard to the retire-rehire option and these remarks might be a launching point for the discussion.

It has become clear to me in dozens of correspondences and numerous conversations that the public absolutely hates retire-rehire. Even after being informed that the district saves money, the perception of double dipping and milking the system persists and many people have suggested we abandon the practice even if it costs the taxpayers money.

After considering all views, here are my thoughts.

First of all, I ask anyone reading these notes to stop blaming the administrator or teacher for taking advantage of, or trying to take advantage of this option. The fact that state law and STRS regulations allow someone to do this is not their fault and their taking advantage of the option is simply smart personal financial management. If you think the option should not be permitted, talk to STRS or the state legislature.

The Retire-Rehire option for administrators saves the district money if the administrator would otherwise not retire. There are two possibilities, either the administrator really intends to retire or they do not. If they intend to retire, the retire-rehire provision would not apply and the district would likely save money on the replacement. If they do not intend to retire and merely want to start drawing their pension, the district saves money on the salary. Either way, the district comes out ahead, therefore, I see no downside to continuing to offer this option to administrators. There is one benefit to retire/rehire that I view as excessive. Currently, Worthington taxpayers contribute 10% of the rehired administrator’s salary into an annuity. This annuity becomes a second retirement stream for the rehired administrator. The annuity can be accessed by the administrator after final separation, but if access is delayed until age 65, there is a 50% match on top of the taxpayer funded 10%. In my view, this is unnecessary because if the administrator went to work in the private sector after initial retirement, it is unlikely that such a benefit would be provided. I would urge my colleagues to consider altering administrative contracts to eliminate that 10% additional benefit. I intend to vote in favor of the two administrative retire-rehires this evening because I don’t believe in changing the rules in the middle of the game. In addition, if the rehired administrator is eligible to receive publically funded health care from another source (e.g. a spouse), I believe the district is best served by requesting the administrator accept that benefit rather than ours.

The Retire-Rehire option for teachers is a different matter. It is an unfortunate fact of life in Ohio Public Education that districts save money when teachers retire. In fact, in Worthington, we are sometimes so desperate to get our most experienced teachers to leave that we seriously consider from time to time giving them money to do so in the form of a retirement incentive. If the teacher chooses to retire and then be rehired, they come back at Step 10 on the salary schedule. A new teacher in that position would, according to HR, be hired at an average of Step 3 on the salary schedule, a difference of approximately $17,000. The reason to do this, or so it has been explained, is that the teacher can be terminated at the districts option at any time, giving HR flexibility that they do not have under the union contract, however, this flexibility only has value if the number of teachers retiring in a given year are insufficient or are the wrong certifications to cover any teachers that might otherwise have to be riffed. This is unlikely to occur in a district that is expecting a high number of retirements. Given this, it makes no sense to encourage teachers to come back at the 10 year level when we can hire replacements at the 0-3 year level in an era where we are trying to get teachers to retire by even considering retirement incentives. Therefore, as policy, while each situation must be considered on a case by case basis, as a general rule, I’ll be voting against retire-rehire for teachers barring exigent circumstances such as a teacher in a hard to fill position.

Regardless of how we feel about these issues, the emotion generated by retire-rehire deserves a board discussion and a policy statement. Such a statement passively exists in our union contract and our administrative list of benefits, however, I don’t know that the board has ever assertively had this discussion and I think the time has come. Thoughts?