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Wednesday, January 6, 2010

Retire-Rehire: Hassle for Staff, Strain on State Fund

Just a quick take on the retire-rehire issue: I can think of only two downsides to Vince Schaefer, Mark Greguson, et al. quitting and trying to re-up mid-school year.

On the local level, we have some paperwork and practical confusion. Schaefer and Greguson have had to step down and clear out their offices. The Madison and Chester school districts have had to farm out their superintendent duties to other staff for the few-week interim... and I'm betting they aren't getting any extra pay ("extra duties as assigned"—same clause that gets teachers taking tickets at ball games for free). Schaefer and Greguson are creating some extra work for their colleagues, just so they can collect some more money.

On the state level, retire-rehire would seem to put a little more strain on the retirement fund. Schaefer and Greguson would draw on this same fund eventually; retire-rehire just means they start drawing sooner. Of course, if rehired, they'll still be paying back into the system. And by retiring early, their monthly benefit check will be less than if they stayed in and racked up a couple more years of higher salary and contributions.

Rehiring Schaefer and Greguson won't cost their own districts any money. Madison and Chester might even save by negotiating lower salaries with their rehires. But that lower salary comes at the expense of a subsidy from the state retirement system—not exactly a kosher Republican position.

In the big picture, I do have some difficulty figuring out a justification for the retire-rehire policy. It might make sense if we were talking about jobs for which we were having trouble finding qualified candidates. If there were a teacher shortage, we might well need to rehire some teachers who would do us a Favre and support the district with an encore performance. But the Madison school district received applications from four other candidates besides Schaefer (and will be interviewing at least some of them tonight and Thursday) for the super job. I can't say if those other four are qualified, but we at least have options.

So what do you think? Is retire-rehire mostly a no-harm no-foul way for veteran educators to get a little more well-deserved reward, or is it a drag on our school and state resources?

By the way, the retirement rules say that, to allow Schaefer to reap the benefits of retire-rehire, his termination must be complete in every way: no stuff left in the office, all insurance policies completely terminated, no informal agreements or duties carrying on through the interim. This is a small thing, but the school district might want to take Schaefer's name off the superintendent page, just to make clear that the termination is really a termination.

Ditto Chester's website:


  1. This is nothing except double dipping on the taxpayers' dime. If I were on the school board I would seriously consider how this will affect people's favorable/unfavorable view of the upcoming massive high school/new gym remodel/new construction. IMO it will negatively impact that if they simply rehire Schaefer again after he takes advantage of a loophole in common sense and the law and wants his job back. IMO this charade should show that the administration is inflated and that his position isn't needed; after all, his leaving hasn't made the school close and hasn't impacted academics.

    I know this has been done in the past, and I didn't like it then. But this is a very flagrant example of the abuse this loophole allows. And the people are more aware and alert to gov't abuses and chicanery now.

    And this on top of the coming budget problems facing this state into the future. Bring on SB 18!

  2. They should receive only one check - either pay check or retirement check. Period. If they want to double-dip, fine - but they should be forced to take a job that is totally uninvolved with the state administered retirement system.
    John Kelley

  3. Linda, you're... sort of right. The double-dipping is on the taxpayers' dime, but indirectly. The SDRS money is the retirees' fair return on money they earned and contributed to the retirement fund. Yes, those public employee wages are paid for by your tax dollars, but Vince Schaefer's retirement isn't causing a direct increase in your taxes. If he's rehired, it might actually save you money, as the school could knock his salary down a peg and get him for cheaper than they get a permanent replacement.

    Not that I'm cheering for this move; I'm just trying to make an accurate assessment of the costs and benefits. Anyone else care to run some numbers and tell us which deal is better for the school and the taxpayers?

  4. Did Schaefer sign a contract to the end of the school year? If so are there any penalties for breaking the contract?

    Tim Higgins

  5. Resigning in the middle of a contract year in December, then advertising for only two weeks, really limits the pool of potential superintendent candidates who are not currently under contract. That's why there's such a low number of applicants. Poor timing. It favors the incumbent.

    Most superintendents notify the district several months prior to their contract ending so the district has a few months to conduct a search and gather a strong number of qualified applicants before making a decision that is in the best interest of children of the district. That should be the number one priority for Madison Central.

    As Madison Central School District hires its new superintendent, I hope they consider applicants who are innovative, visionary and interested in taking Madison Central to the next level of proficiency and learning. If those applicants have not yet come forward, consider appointing Vince Schaefer as interim superintendent which will buy more time and flush out additional applicants.

    I'm not inferring that Vince or Mark don't meet these qualifications as I respect both administrators greatly, but when your district leader resigns, you need to consider the next five or ten years and how you want your district to look. Then, the decision should be made solely on what's best for the children of our district.

  6. Milbank School district goes one better, a person retires, is rehired at the new negotiated salary and is paid about a third of their salary a year for 3 years. i always explained if people did not like retire/rehire to take it up w/the state of SD, but the bonus is paid by the taxpayers, some years there are quite a few who rec'd this, I can recall about 10, say the salary is about 38-40,000, more for an administrator it runs well over 100,000 in bonuses. If there were a few eligible it might not hurt, but there are always a new batch that are eligable after the last group has left. If there is a really great teacher, and we have had quite a few; I really do not want them paid off to leave the students. It is lose/lose in my opinion.

  7. sorry, back again... that is about 10 some years, other years 3 or 4 people.

  8. Joelie, what are the bonuses?

  9. Steve Sibson1/06/2010 7:29 PM

    This is very strange. I contribute 10% of my earnings to a 401K. I have been doing that for almost 20years. Nobody has said that I can retire, take the money, and then return to my job.

  10. Hi, Tim! All teachers and administrators sign contracts for at least the full year. I seem to recall the board offered Schaefer a two-year contract when he started. The board is perfectly within its rights to impose penalties for a breach of contract like this; however, I take it the board's vote last month to accept the resignation marked their willingness to forego any penalties. But check with a board member to verify that.

  11. #1 a returning employee gets their full salary-usually the newly negotiated salary. I think some places a returning employee receives a first year or at least reduced wage.
    #2 the bonus is about 1/3 of their salary each year for 3 years, in other words, taxpayers pay 1 years free salary for an agreement to retire in 3 years.
    #3 this has been going on since the 1990's so there are usually 2-10 people receiving this at any given time.
    This is unique to our school district, at least until the last few years.

  12. Cory, you asked, "Is retire-rehire mostly a no-harm no-foul way for veteran educators to get a little more well-deserved reward, or is it a drag on our school and state resources?" Well, as you could tell from my letter to the editor yesterday, I think it's wrong. But also, there's the fact that it's only for "veteran educators" WHO ARE ADMINISTRATORS. Veteran teachers don't get to do this. Veteran teachers are being shoved out the door, forced to take early retirement, etc., so that young teachers can be hired at crap salaries. In the college system, teachers who retire can only be hired back as adjuncts - making 30% of their old salary, max. So this is a nice little loophole that only applies to bureaucrats.
    Eve Fisher

  13. Several years ago there was at least one teacher, not administrator, who did the retire/rehire thing. Isn't this allowed anymore?

  14. Hi, Linda!

    Right now, any employee participating in the state retirement system can take advantage of retire-rehire, if a participating employer will rehire him/her. I think we have some teachers who have benefited -- didn't Dean Koster retire and then re-up with the district at AIM High? But it's darned unlikely that any teacher would have the audacity to retire mid-year, throw his kids into the hands of a sub for a few weeks, and then reapply to get his job back. It's perhaps even less likely that a school district would hire back a teacher who created such a disruption just to cash in early on retirement money.

  15. Isn't this the same thing these two supt's just did?

  16. Linda, a few years ago, Roy Lindsay retired as a teacher, but since teachers in his field are very hard to find, he was re-hired part-time which reflected staff and class reductions. The district won in that case by retaining an experienced educator at a lower cost while still providing the curicullum to students.

  17. And Rod, that's a case where we do indeed come out ahead. The retirement rules should make an exception in cases like that where a district has a pressing, hard-to-fill need and a genuinely retired educator is willing to come back and serve. But in that case, the primary motivation is serving the kids, not lining pockets.


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