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OHNO report: Retire, then rehire



Published: Sun, June 20, 2010 @ 12:01 a.m.

By Dennis J. WILLARD

Beacon Journal Columbus Bureau

For the past decade, Larry Morgan has been collecting a pension check from the State Teachers Retirement System and a paycheck as superintendent of the Stark County Educational Service Center.

He is paid $149,688 by the service center, a $6,000 supplemental salary, annual employer contributions of $10,000 to a tax-deferred annuity and life insurance.

He also is paid $1 a year as superintendent for the county’s R.G. Drage Career Technical Center. When he stops working or dies, according to his contract, Morgan or his heirs will be paid $5,000 for each year he ran the vocational center since 1995.

On top of that is his pension check. That’s private, but could easily be into six figures.

Morgan, 68, will spend about a fifth of his career collecting pension checks from the state retirement fund while receiving full pay as a superintendent, a practice critics call double-dipping. Absent the assurance that he could keep his full-time government job, Morgan said he probably would not have retired Aug. 1, 2000, when he was earning $129,969.

Morgan may be cashing in on the system more than others, but he is hardly an anomaly in Ohio. He is a member of an exclusive club of superintendents who retire and return to their same job or rotate to another school district after signing lucrative contracts.

An analysis by Ohio’s eight largest newspapers found:

One in four public school leaders in Ohio’s 614 districts bring home the bacon twice, and one in two educational service center superintendents are doing the same.

Allowing superintendents to retire early halts their contributions into the fund and pulls millions of dollars out at a time the fund’s long-term viability is at risk.

Superintendents point out that the practice is legal and that it would be foolhardy not to take advantage of a pension system that permits them to retire and return to work.

While many superintendents claim that this practice is justified because of a shortage of qualified candidates, the Ohio Department of Education says there are thousands of licensed individuals who meet state standards to run school districts.

This is part of a larger state issue. About 32,000 state and local employees collected more than $1 billion in pension payouts last year on top of their paychecks. Three-fourths of those dollars went to STRS members.

More than 150 (about 27 percent) of the state’s 613 superintendents are collecting paychecks and pensions at the same time. The ratios are higher among the heads of the Educational Service Centers, the former county school districts merged in 1995 to create 56 support centers for local school districts.

For the past decade, a growing number of school chiefs have cut deals to retire, collect a lucrative public pension and return to work, often in the same job.

In many communities, school board members have told local residents that hiring a retiring superintendent saves money.

Luci Gernot, Wood County Educational Service Center superintendent south of Toledo, retired after 28 years in 2007 from another school district. That provided her with about $56,000 a year in pension benefits.

She is paid $115,000 in her ESC job.

Gernot said she could have gotten another job in any number of industries but decided to stay in education. Either way, she said she’s entitled to the pension benefit.

“It’s something I’ve earned,” said. “I could have gotten a job doing pretty much anything.”

It is difficult to put a price tag on the impact of these deals, but Ohio was criticized for spending more money on administration than classroom instruction by a Brookings/Greater Ohio Policy Study Center report released in February.

The study found Ohio ranks 47th among states for putting money into classrooms, but ranks ninth in tax dollars spent on administration.

Brookings also reported that Ohio’s share of spending on administration was 49 percent higher than the national average.

STRS has more working retirees than any of the five pension systems and paid out $741 million in 2009 to 15,857 retirees with an average benefit of $46,800. Before the 2000 law change, teachers had to wait 18 months to return to public service. The forfeiture period was reduced to two months in line with other public employees.

Since then, STRS has seen an enormous growth in the number of double dippers as teachers return to work on a full- and part-time basis and as adjunct professors at universities.

There is an even more exclusive group of 299 STRS retirees that earn more than six figures annually in their retirement while receiving a pension check of more than $80,000 on average. Their number has grown from only 19 in 2000.

The Ohio newspaper analysis of double-dipping superintendents showed that, among those checked, most make more in salary than they did prior to retiring. They also sign contracts with perks that make them consistently among the highest-paid public sector jobs in the state.

For example, many districts not only give the superintendent a pay raise, but they also pay both sides of the employer/employee contribution into the retiree’s annuity to STRS. This, in effect, is a 10 percent pay increase on top of the base salary.

Districts also often pay the 1.45 percent of salary to Medicare as well as a car allowance, training and travel money, overtime for working holidays and any days not stipulated in the contract, and insurance.

Why do they command these generous offers?

Forest Yocum retired in 2002 at age 56 from Pickerington City School District before being hired as superintendent at Southwest Licking east of Columbus at $132,000.

“The problem facing a school board is the number of people available,” Yocum said. “There are not that many top-quality candidates.”

Yocum and other superintendents said that there is a limited pool of qualified applicants trained, experienced and prepared to assume the demanding role of running a school district.

But the Ohio newspaper analysis found that there are thousands of licensed Ohioans available for the superintendent jobs. There are also potential out-of-state candidates and others currently working in education that could be groomed.

Scott Blake, an Ohio Department of Education spokesman, said 3,305 Ohioans have credentials to be superintendents. An additional 1,204 are inactive.

Ten years ago, Mark Freeman retired as superintendent at Shaker Heights near Cleveland. It would seem that a large number of applicants would forward their application for a chance to run one the of most prestigious and envied public school districts in the state.

Freeman was earning $149,675 annually when he retired with a pension that was nearly 88.5 percent of his income.

Shaker Heights rehired Freeman without publicizing the opening or interviewing one other candidate. He received a pay raise in his first day back on the job to $156,546 to go along with the money from his public pension.

Deals like this led lawmakers in 2003 to conduct a job search before rehiring recently retired superintendents.

Now, a district must post the job opening 60 days in advance, hold a public hearing on rehiring the existing superintendent to determine whether there is any opposition in the community and then vote publicly to rehire.

These rules have not stopped a small cadre of superintendents from continuing to monopolize the positions.

Jennifer Sinisgalli, Strongsville school board president, said her district received applications from 25 or more individuals when the superintendent’s job was open in 2009. The district retained Jeffery Lampert, who had taken the job mid-school year on an interim basis in December 2008.

Lampert retired eight years earlier from North Royalton and already was collecting a pension. He worked as an adjunct professor at Baldwin Wallace before returning as a superintendent to Brooklyn City schools in 2005 before getting out of the business again when Strongsville came calling in late 2008.

Sinisgalli said Strongsville did a full job search with applicants from Georgia, Florida and other states, interviewed five or six candidates and ultimately decided to continue with Lampert.

Gary Burtless, a senior fellow at the Brookings Institute, has studied pension funds for 30 years. He said there is nothing wrong with a school district rehiring a retired superintendent, but there should be a system in place to reassure the public that a thorough search was conducted to find the best candidate.

In this decade, there have been several legislative efforts to address this issue, including a bill introduced in 2007 by former state Rep. Michelle Schneider, a Republican from Madeira. She proposed a six-month waiting period, effectively banning the practice of weekend retire-rehire for all the state pension funds.

State Rep. Bruce Goodwin, a Defiance Republican, introduced legislation the same year to require double dippers to take a 40 percent pay cut before returning to work. The proposal was aimed at school superintendents and top governmental administrators.

In both bills, the Legislative Service Commission, which provides fiscal and legal analysis to lawmakers, noted its numbers crunchers could not determine whether double dipping cost taxpayers money, but they concluded that delaying retirement reduced STRS liabilities.

That’s because STRS members who work beyond 35 years continue to contribute into the fund and its solvency.

On the other hand, superintendents who retire at 30 or 35 years halt their contributions into the general pension fund while possibly drawing down more than $1 million before reaching age 65.

This runs counter to pension logic, which provides participants with higher income if they work longer — as does the Social Security System.

There are two early-retirement enablers.

Many superintendents would not retire as young as 52 without a guaranteed job.

In addition, early retirement is possible because all five state pension systems provide health-care benefits. If this benefit were not available, retirees would have to wait until age 65 to retire with Medicare.

When the state Legislature created STRS in 1920, health care was not part of the package.

In 1973, STRS and the four other state pension plans convinced state lawmakers that they could afford to offer health care, but it is not a mandated benefit.

Before the stock market collapse in 2008, the fund managers were warning that health care could not be continued in its current form. Then, losses on the markets hurt the pension accounts, too. STRS in particular found itself in a long-term solvency crisis.

All five pension plans want state lawmakers to tap taxpayers for more money by gradually increasing the contributions by a combined 5 percent of payroll from employees beginning in 2011 and employers in 2016. Five additional percentage points is effectively a 21 percent tax increase for the funds.

STRS, as part of the long-term solution, wants lawmakers to require public employees to work at least 35 years or to age 60 or face significant benefit cuts.

Today’s report on Ohio’s pensions for public employees is a collaboration among the members of the Ohio News Organization, the state’s eight largest newspapers. Reporters from each newspaper are examining publicly funded pensions as Ohio’s lawmakers consider options for improving the solvency of these funds.

Information supplied by the pension funds enabled reporters to identify thousands of public employees who are working in public office and collecting pension payouts at the same time — known as “double dipping.” That list was matched with the most readily available public directory — Ohio school superintendents — to produce this report.

Though Ohio law prohibits the State Teachers Retirement System from releasing ‘‘any information identifying, by name and address, the amount of a monthly allowance or benefit paid to the individual,’’ a mailing list of those receiving benefits is available.

That list was checked by Akron Beacon Journal reporter David Knox against the names of Ohio’s more than 600 district and county school superintendents to identify those who are collecting STRS benefits.

Reporters representing Ohio’s eight largest newspapers confirmed their retirements and gathered additional information.

The eight papers participating in this report are the Akron Beacon Journal, The Blade of Toledo, the Canton Repository, the Cincinnati Enquirer, the Columbus Dispatch, the Dayton Daily News, The Plain Dealer of Cleveland and The Vindicator.

Related stories: Poland schools chief: Board wanted me back

Public pensions peddle influence

Retirement fund inspires teachers to exit jobs early


Comments

1fightin_tigahs(1 comment)posted 3 years, 10 months ago

This happens all the time in Florida. The Lee County FL Property Appraiser-Ken Wilkinson-took/absconded/stole $600 K+ and came back to work with everything intact 30 days later.
It is not a Rep or Dem thing-greed is greed-and politicians certainly know how to make their bed.

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2Annie53(21 comments)posted 3 years, 10 months ago

shellroyal:

Based on the content and composition of your comment...........I seriously doubt you are qualified to call anyone else ignorant.

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3repeaters(180 comments)posted 3 years, 10 months ago

The Vindicator keep endorsing and the foolish, sports-minded public keep passing those school levies in the rediculous belief that.....It's ALL about the children. You would think that after all these years the Vindicator would have read its own published articles.

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4author50(1121 comments)posted 3 years, 10 months ago

It's true... the best job in the state of Ohio is working for the government at any level. Problem is, there isn't enough taxpayers to support the lavish paychecks and pensions that have been stolen from the people over all these years.

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5Gil(23 comments)posted 3 years, 10 months ago

Fact is, the majority of state workers are not paid high amounts such as the man stated in the story. In fact, most workers have taken pay CUTS over the last two years and will most likely NOT get that money back. This is typical of our area where if a few people are doing well, we must make sure that we report it and get mad at these people. How dare someone make a nice paycheck! Happened before with people bashing the GM workers and the money they made. Now look how they have been cut. I guess everyone won't be happy until we are all making the same amount of money and on an even playing field. Maybe the reporters who always bash these types of things should go find another job if they aren't happy with what they make rather than always ripping on others.

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6timOthy(802 comments)posted 3 years, 10 months ago

Columbiana County's Common pleas Judge (TOBIN) who is retiring next month collects two pension and is a (DOUBLE DIPPER)! I'm against this totally. Your either retired or your working. Give other people a chance! But when you get these Government Jobs (GREED) sets in. Especially if your a popular vote getter or in the click of civic groups! Which is always the case.If any thing these people need to take cuts in pay,health care,and pension. Look at this country and what these people have made it. Wellsville, Ohio just voted to disband the (afscme union) for it's five people that's employed there.And no pay cuts! Of course it's Wellsville and they beat their own drum. Until something happens then they need stimulus money and all the help they can get from the rest of America.A bunch of parasites if I'm asked!

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7timOthy(802 comments)posted 3 years, 10 months ago

Gil your totally wrong about there pay. Yes they took a cut in pay ! I also took a cut with the carpenters . It was 5,000.00 cut! We were making $14.90 an hour to $12.40 an hour. Do the math? Now with all these Government employees no one will say what's in their pension fund or what the Public Sector contributes to it! Do you think that's fare? They get 3% automatically when the retire. Has your Social Security gone up 3% every year? Or pay check? Oh I forgot you don't pay into that. And just why is that?

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8Silence_Dogood(1214 comments)posted 3 years, 10 months ago

Charles P. Sammarone !

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9harleydog(183 comments)posted 3 years, 10 months ago

Amen Annie53.

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10Gil(23 comments)posted 3 years, 10 months ago

You can single out nonproductive workers in any industry. Sure there were people at GM who sat around and did nothing, there are even pro athletes who do nothing and get paid a ton of money (Tim Couch). I'm just saying that the problem we have is always trying to put stereotypes on groups of workers. There are already changes coming in the pension systems to eliminate the 3% annual increase. Also, under the current system, you can retire with 30 years at any age. That is changing too so State workers will have to work even longer. The MAJORITY of State workers make amounts less than those in private companies. Work as an accountant for the State or something similar and you make significantly less than you would at a CPA firm or something like that. This is just one example.

It just seems like whenever somebody has a good life, we are always trying to take it away. We can't all have the same job, same pay, same benefits. That's life. GM was the first subject of everyone's wrath and now the State workers and teachers are getting hammered. Heck, let's complain about priests and how much money they make. It will never end.

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11Cassie(88 comments)posted 3 years, 10 months ago

George Tablack--big time double dipper

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12badeepster(100 comments)posted 3 years, 10 months ago

What makes me laugh is that years ago--steel workers in this town made money hand over fist with as much as 10 weeks vacation and the people that educated them--their teachers--made peanuts. Everyone laughed at them and their wages. The only thing they had going for them was their pension system and the satisfaction of educating, or trying to educate, low-lifes and fuzzy foreigners like Bertie DeScumbag. Well now the shoes on the other foot and those are better jobs. And to the people complaining---tough sh!t--maybe you should have been an deucator instead of a mill rat. Eat it Bertie and friends!

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13jr99(87 comments)posted 3 years, 10 months ago

I agree, badeepster. Another thing I'd like to add: I read the comments left by many posters on this website (about all the articles in general) and am absolutely amazed at how poor the spelling and grammar are. Maybe that's a big reason why there aren't many high paying jobs in this area. People are basically illiterate ("should've" is "should have", not "should of"; not knowing when to use "your" and "you're", "their" and "there", etc.). Learning proper english was taught in elementary school. I guess when all you have is an elementary education, you won't be making much money, which results in people being jealous of educated people making a decent living.

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14Thunderboom(67 comments)posted 3 years, 10 months ago

Subject of this article; And the point is??
First, bravo badeepster & jr99. This article is only to promote class envy. These people sacrificed their young lives to get an education & become themselves, educators. Me, I chose a different path,emphasis "I chose". I became a truck driver. Mainly because it provided instant financial gratification. I was fortunate to be a Teamster,when Teamster meant something. I was blessed to retire,after 38yrs of over the road service,to a most generous pension. The Teamsters have an extremely restrictive "post retirement employment" policy. They consider the retirement to be just that, and not a supplementary income. One thing you may do is drive a school bus, but only for a school district, not for a private contractor, emphasis "restrictive". I am fortunate to have obtained a bus drivers job with a local district. The money, not a lot. But, having worked all my life, it feels good to be a working,contributing member of society. It is my honor to be a taxpayer to the greatest nation this planet has ever seen. I know this is "politically incorrect", but God Bless the USA

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15dhtj(32 comments)posted 3 years, 10 months ago

Do you lose $1.00 for every $2.00 that you make after $14.000. I don't think so. Well guess what? I do. All of us in the private sector do. You Mr. Zorn are truly indeed a double dipper.

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16ManOfSteel(16 comments)posted 3 years, 10 months ago

All these "jobs" are, are sinecures for nonproductive leeches. I will bet that most people who defend these rehiring practices of the state will turn around and rail endlessly about the rampant corruption in mutual funds', hedge funds', and investment corporations' executive offices. Most pro-union, pro-government job babblers are among the most hypocritical people that I know, and once you have heard one, you have heard them all. Education, like most other socialized fields in the United Socialist States of America, would perform more efficiently and have better long-term results if partially or fully privatized; granting tenure and other perks outside the postsecondary education milieu is very counterproductive indeed, as are the pension provisions that actually encourage "education administrators" to retire earlier rather than later. If any private industry were run this way, it would become nonproductive and insolvent too---and liberal ignoramuses wonder why insolvency is so rampant in government????

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17ManOfSteel(16 comments)posted 3 years, 10 months ago

Oh, and "BS"...this is corruption; your sense of morality is just too corrupt to recognize it. Just as double taxation is immoral, so too is benefitting doubly from the taxpayers, who must cover insolvencies in STRS and PERS due to dubious retirement activity. Indeed, when the only secure jobs can be found in government, we have already crossed the line into de facto communism. In any strong communist state, the public aristocracy had to be enriched in order for the system to work, and this edification is already in progress here in America.

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18justthefacts(18 comments)posted 3 years, 10 months ago

I am a poland resident and taxpayer who works in the private sector. I have nothing but good things to say about Dr. Zorn and will greatly miss him when he no longer serves the district.
Dr. Zorn is an old school administrator who provides many services to the school that many in his position do not. He has upgraded out schools and programs through a variety of grants and other methods without cost to the taxpayers.
Yes, we do have to approve renewal levies every so many years, but the cost has actually decreased as more families have moved to our village and township.
Poland is a desirable location to live in because of our wonderful and successful schools. No,we have not built new buildings but our schools are renovated and properly maintained.
While I do not believe we qualify for much state aid, Dr. Zorn has found ways to write for these grants and has strengthened out school district. I say "thank you" to Dr. Zorn for a job well done.

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