Reversing On Retiree Hiring
By Alex Saitta
December 28, 2014
Due to the mounting budget deficit of the 2008-09 school year, the district was facing massive position eliminations. There were 120 employees who were “retired,” but still working in the district, earning their full pay and collecting a state retirement check too.
Instead of laying off first year employees, Superintendent Dr. Mendel Stewart recommended ending the hiring of retirees. Those 120 retirees were not rehired back the next year, saving many first year employees’ jobs. I believe six principals were “retired” at the time, so six principal positions opened up that year.
The new practice was to hire retirees only when a suitable replacement could not be found. It wasn’t a written policy, just a practice the Superintendent wanted to implement and the board members agreed to it without a vote. I viewed the new practice as applying to all employees in all circumstances. Others throughout the organization saw the rule differently.
Over the next 18 months, I heard more and more retirees were being hired back. After asking numerous times how many retired employees were still working in the system, I was finally told 81 had been hired back in some way, shape or form. This lack of a written policy also resulted in inconsistencies in which retired employees were hired back and which retirees were not rehired. The district was sued in one such case, and had to settle the lawsuit.
For these reasons, in 2011 a policy was written and passed by the board. The policy eliminated the hiring of all retirees unless a suitable replacement could not be found, and the board had to approve those hires. If the board approved the hiring of a retiree, it was only temporarily, and their pay was to be reduced as state law allows. Exemptions to the policy were given for substitute teachers, cafeteria workers, bus drivers and custodians. That is, the administration could retirees for those substitute positions without board approval.
In 2014, Superintendent Dr. Danny Merck recommended most all the restrictions for hiring retired workers be lifted. I opposed this reversal for a variety of reasons. The board approved the recommendation and the district is now fully back in the game of hiring retirees.
I think the system is often blinded by the wants/ needs of today, and it doesn’t see the long-term consequences of the decisions that are made. There is three long-term consequences that I put forth when the administration’s recommendation was made, and the issue was debated by the board.
Long-Term Consequence #1:
When employees know there is a good chance they can retire and draw a retirement check, and they can come back to their job and get a paid too, naturally, many retire early so they can maximize their annual income. Who wouldn’t want to collect a retirement check each month, and work and get a pay check too?
School districts around the state have policies that encourage the hiring back of retired employees, and this puts an extra drain on the retirement system. Do any wonder why the SC Retirement System’s long-term deficit is $14 billion?
To protect the long-term viability of the retirement system, at some point elected leaders need to stand against this practice that allows double dipping into the state coffers.
Long-Term Consequence #2:
I think this is a moral issue on the personal level when an employee signs a document with the state saying they are retiring, so they can start collecting their retirement pension, but then they say to the local school district they really aren’t retired, so they can keep on working and draw a paycheck too.
Most of the fault, though, is with the school districts that pass policies that encourage employees to tell the state one thing, and the district another thing. Such encouraged duplicity hurts the integrity of government in the eyes of the public, and erodes vital support for the public school system.
This Is Worse With The Post-TERI Retirees:
Under the TERI program the employee promised to retire from the district in 5 years. In return for that promise, the employee was paid his salary for those last 5 years and he was also given his retirement pay too during that time (up front retirement payments). When the 5 year period ended, most retired. But many truly didn’t want to retire and petitioned the district to hire them back as a retiree. Often times the district hired those “retired” employees back, so they received their 5 years of retirement money up front, they continued to get their monthly retirement check going forward and collected a salary too for working at the district.
That is, these Post-TERI re-hires were able to keep the part of the agreement they liked -- getting 5 years of retirement pay up front. Yet they were able to break the half the agreement they didn’t like — the part that they had to retire after the 5 years.
Does anyone realize how bad this looks to our bosses (the public) who is paying for it all? If the employee wanted to keep working, he should have NEVER signed the agreement to retire and took the upfront retirement money.
Long-Term Consequence #3:
I have been on the school board 10 years. I saw what the selective hiring back of retirees resulted in the first time around.
· Favoritism: I lost count of the number of retired employees who told me, they hired him back, but not me. That was unfair. The district was sued by one employee who won her case. I do not believe this system can hire based on need alone. Naturally, relationships become a huge driver and often times that makes the process unfair.
· There are salary differentials in retirees hired back. Some will be paid this, and others paid that. We are already seeing that in the retirees hired back thus far.
· Upward mobility was all but stopped. In 2008 the district had 6 principals who were retired, and still working as full-time principals. I remember young assistant principals saying, I can’t get an opportunity here. Nothing opens up when senior employees can “retire”, and keep working at their job.
I thought the 2011 policy that was in place was working. Retirees could be re-hired if a suitable replacement was not found. It just required board approval. When it came to subsitute teachers, cafeteria workers, bus drivers, and custodians the administration could hire all the substitutes it wanted without board approval. That was the rub. The administration wanted to do much more hiring of retirees without board approval. The risk I see is a flood gate of retirees coming back in, and all those negatives I talked about above.
By and large I think this is an issue of convenice for the administration, not necessity. It is much easier for the district rehire this retired person who is doing the job, who they know and like, than going out to recruit a new employee.
The 2008 practice and the 2011 policy of not hiring back retirees required the district administration to do more recruiting and training. Got that, but we weren’t asking the personnel department to the Career Center, build a rocketship and shoot it to Mars. We are asking them to do something it does every day -- find candidates, hire them and train them for a job.
If our district is going to meet the challenges it is facing for the coming decade, the district leadership and the board is going to have to challenge all managers and departments to rise up and meet those challenges. The personnel department was challenged here and didn’t fair well in my opinion.
What kills me, is the district had some employees who signed up to the TERI program, so it was known 5 years in advance they were going to retire. Yet when those employees hit the 5 year mark and were about to retire, the administration said, we need to hire this or that employee back because we couldn’t find a replacment. That is, they had 5 years to find a replacement, but couldn’t.
The hiring of retirees has begun. The allows districts that hire retirees to do so at reduced rates of pay, which makes sense because retirees also collect a monthly retirement check. Board policy states the board must annually approve a salary schedule for retirees. That needs to start this year, and those retirees should be hired at the entry level pay for their classification. In the past, that is what was done. For instance, if a teacher with a master degree retirees, begins to collect their retirement pay, and that teacher is hired back, she/ he should be paid what a teacher with a masters degree makes with zero years experience. A clerical assistant is paid from $11.55 to $16.19 an hour. If the district hires back a retired person as a clerical asistant that person should be paid the starting rate of $11.55 a hour. This will make the pay uniform and avoid unfairness in which retiree is paid what, and additionally it will save the school district money that can be used to help in the areas of instruction. It is up to the board leadership to make sure policies are followed, and such required votes are brought before the board. The board annually must approve the retiree pay schedule.