LIMA — There was a full house when Minster schools held its required public hearing about three employees looking to retire and then get rehired by the district.
While often spurring debate, these particular retire-rehire requests were greeted with praise. First, they are teachers, without the high and often publicized salaries of superintendents. Second, they saved the district $92,000.
“We were looking to make budget cuts and they came to us with a proposal,” Treasurer Laura Klosterman said. “We see it as a cost-saving measure, and a way to keep quality teachers.”
School employees can retire and start collecting retirement from the Ohio State Teachers Retirement System (STRS) when they have 30 years in. They can collect 66 percent of the average of their top three salaries. If they wait until they have 35 years, they can collect 88 percent.
Changes could be coming to the formula, a result of STRS facing $40 billion in unfunded liabilities. Superintendents, who retire after 30 years instead of 35, each cost STRS about $465,000 in expenses and contributions.
The Lima News looks at retire-rehire employees in this year’s annual salary report. Those retire-rehires among districts’ top wage earners are mostly superintendents, but there are a share of teachers who have done the same. A few classified employees have also done what many call “double dipping.”
“The public considers it double dipping, but it is no different from someone who worked at Ford for 40 years and retires and then starts a new business. There is nothing wrong with supplementing your income,” said Wapakoneta schools Treasurer Susan Rinehart. The district has only occasionally done it.
Who’s doing it
A recent report by Ohio’s largest newspapers showed that one in four public school leaders (about 150) in the state’s 614 districts collect both pensions and paychecks. One in two superintendents of educational service centers do the same.
Four Superintendents in Allen County (Allen East, Bath, Shawnee and Spencerville) are retire-rehires. All in the county have additional retire-rehire staff. Lima schools had six teachers but no administrators last year. A school improvement coach did it this year.
Joanne Kerekes, of Waynesfield-Goshen, is the only retire-rehire superintendent in Auglaize County. Five are heading Putnam County schools (Putnam ESC, Continental, Jennings, Leipsic and Miller City-New Cleveland). Jennings’ Frank Sukup has since retired for good. Superintendents in Van Wert, Crestview and Western Buckeye ESC are retire-rehires.
About 32,000 state and local employees collected more than $1 billion in pension payouts last year. Three-fourths of those dollars went to STRS members.
Big paycheck/big savings
Bath Superintendent Bill Lodermeier made more than $100,000 when he retired from Shawnee schools in 2000. Despite an $80,000 Bath salary that has not changed since being hired, he makes more than he did at Shawnee by drawing from his pension and getting a $10,000 annuity for not taking insurance.
While Lodermeier is taking home more than $100,000 between his pension and paycheck, Bath schools is saving about $4,000. The district saves at least $50,000 a year through its retire-rehire employees.
Bath board member Jeff Dackin has no regrets about hiring a retired superintendent and says the board would do it again if the person fit the district’s needs.
“People say double dipping and things like that, but if you are costing taxpayers less, that really isn’t true,” he said. “We would have probably been paying $115,000 to $120,000 for a person with Bill’s qualifications. It has been a good deal financially.”
The latest superintendent to retire tops all salaries on this year’s lists. Allen East’s Michael Richards made $136,689, a result of retiring mid-year and getting unused vacation pay.
He worked as an interim during the required 60 days away from the job and was rehired in March, when his $108,000 salary dropped to $90,000. The district doesn’t have to pay as much into his retirement now, so Richards said the overall savings is $22,000 a year. Still, a few opposed it at the public hearing.
Shawnee Superintendent Paul Nardini retired and came back in 2033 when he was still middle school principal. He took a 20 percent pay cut. When he became superintendent two years later, his salary was $85,000, with a $10,000 annuity.
The superintendent he replaced was making $117,500. He makes $7,000 more in annuity now, but froze his base salary two years ago for the duration of his time with the district. Nardini is making substantially more when figuring in his pension, but he says it is no different than someone from the private sector paying into a 401(k) plan.
“I paid into an annuity and I was entitled to that just like anybody in the private sector,” he said. “And in these economic times, it is a benefit to the district. You are getting a person with experience that they wanted.”
When he retired, Nardini took insurance through STRS, adding to the district’s savings. STRS ended the practice of paying insurance in 2009. Nardini now gets district insurance like any employee.
High school Principal Don Wade, also took a 20 percent pay cut when he retired, Nardini said. Teachers are put back at the five-year experience level and can only move up to eight. The district saved close to $80,000 last year with retire-rehires.
Most area districts that allow teachers to rehire and be retired bring them back at less experience on the salary schedule. The Lima school district hires them at between five and 10 years depending on the position, Treasurer Ryan Stechschulte said. They get limited contracts so their employment can be reviewed each year.
The three Minster teachers, two teaching math and one physical education, all with 35-plus years of experience, are coming back at half-time positions at the five-year experience level. The district had to hire one math teacher, but the teacher has just three years of experience.
Two Kalida retire-rehire teachers are among the district’s top 10 wage earners. They make the list because they earned severance because this past year was their last.
The school offers a “Victory Lap” option for teachers, allowing them to retire at year 30 and return for just one year at their full salary and benefits. The key, Superintendent Don Horstman said, is keeping teachers from staying 35 years.
“If you do it (retire-rehire) right, it is a financial benefit to the district,” he said. “They are great teachers, but they are the most expensive staff members.”
Kalida schools has replaced the two with teachers at the lower end of the experience and pay scale, saving at least $15,000 per position. The district has 12 teachers entering their 30th or beyond year of teaching. One has already expressed interest in the “Victory Lap” option.
Shawnee has turned down requests to retire and rehire from primary school teachers. The decisions have been financial, Nardini said. He could hire less experience for cheaper. He likely wouldn’t deny a science or math teacher.
“Primary teachers are a dime a dozen,” he said. “We probably have 300 to 400 applications for a primary teacher, but if a physics teacher leaves, you would be lucky to get two applications.”
Many district rehire teachers to substitute. Seventy-three percent of retire-rehires are substitute teaching, Nardini said. Rinehart said the Wapakoneta board will continue to hire back teachers as substitutes but probably not many others because the public doesn’t like it.
Critics say retire-rehires make it tough on new employees to get work or those wanting to head schools to find jobs. Others say there is something to be said about experience.
“I can say I am giving them an experienced superintendent at an entry year superintendent salary,” Richards said. “Hopefully. that is a win-win for both parties.”
Lodermeier will leave Bath at the end of this school year with 41 years in education. His experience has benefited the district, he said.
“There are a lot of issues I have seen before, so they are routinely solved,” he said. “As you get older, you have more patience with resolving problems.”
With the uncertainties around Ohio’s education, Richards said, the pool of people wanting to move into administration isn’t what it used to be.
“There are not a lot of people beating down the doors for these jobs,” Horstman added.
According to the Ohio Department of Education, 3,305 Ohioans are credentialed to be superintendents. An additional 2,204 are inactive.
District circumstances sometimes make rehiring a superintendent beneficial. An example, Horstman said, is a district embarking on a building project.
“It made sense for districts to keep someone there who had the historical knowledge of what was going on in the district,” he said. “That really spurred a lot of districts to hold onto their superintendents.”