The Kettering Board, in its proposal to retire and rehire Jim Schoenlein as Superintendent, acknowledges that one day the Superintendent will be paid at an annual rate of $155,000 and the next day, doing the same job, he will be paid at an annual rate of $250,000. This whopping $95,000 annual increase, the Board says, is a win-win — a big bonus for a Superintendent they want to reward, and, at the same time, a savings in the school budget of $40,000 each year.
According to the requirement of Ohio Revised Code, there must be a public hearing concerning this retire and rehire decision. The hearing is set for July 13.
In my view, this retire / rehire practice is ethically challenged and, it seems to me, retiring and rehiring Superintendent Schoenlein, as a win-win money scheme, will make it more difficult to keep the public’s support for Kettering Schools.
Yes, there are many retired teachers, principals and superintendents who retire, leave their place of employment, and are rehired by some other school or district. These retirees receive their pension from their first career and, in addition, a new salary from their post-retirement career. This “double dipping” is legal and a great deal for the person involved.
If Dr. Schoenlein were to retire from Kettering Schools and be immediately hired as superintendent of some other district, then, his $250,000+ annual income would be in keeping with the rules of the State Teachers Retirement System rules. It is a generous system.
But, the Kettering School Board is proposing that Superintendent Schoenlein “retire,” and then, the next day, seamlessly continue to do the same job. Some Kettering voters will not appreciate the fact that Schoenlein’s “retirement” is a fraud — what, no retirement party? no gold watch? — some voters will see it as an insider scheme to deliberately sidestep the intent of STRS rules. It seems to me the ethical dimension of retire / rehire scheme should be carefully evaluated by the Kettering Board and the board should consider the impact this decision may have with the public.
Evidently, since they are going forward with the July 13 hearing, the Kettering Board sees no ethical problem with this retire / rehire proposal and agrees with the view expressed by Superintendent Schoenlein, quoted in the DDN: “School employees build up a retirement fund over their entire career, and that’s that individual’s money. At some point, when you’re eligible, you say, I’m going to start collecting. Whether you’re working or not doesn’t matter.”
According to the STRS web-site, it does matter, but only a little bit. If you are re-employed by the same employer, you must forego two months of retirement benefits.
Scheonlein’s comment raises some questions. Yes, educators contribute to their own retirement account. They are exempt from contributing to Social Security and when they retire they can withdraw, if they choose, all of their contributions to the system. But if the retiree takes a lump sum settlement, he or she has no claim on the bigger part of his or her retirement package. Most of the money in the STRS does not come from the individual educator, but from tax money paid by the school district that employs him or her. Individual educators pay 10% of their income to STRS and the school district pays uses tax money to contribute to the STRS system a sum equal to 14% of each educator’s income. This is an important part of every school district’s budget.
Schoenlein’s statement fails to explain that most of the money contributed to an educator’s retirement fund comes from tax money. In retirement, the first retirement monthly checks is the money the retiree himself or herself has put into the system. If the retiree suddenly dies before exhausting his own contribution, his or her estate can claim the balance of the retiree’s contribution. But most retirees, in receiving their monthly checks, soon exhaust their own contributions and live out their retirement from the 14% contributed by tax payers. Schoenlein, with a normal life span, could be collecting a retirement based on this 14% tax contribution many years after his own contributions are exhausted. The fact that retirees are quitting earlier and living longer has put a big strain on the STRS system and this fall it looks like new STRS rules will be implemented to shore up the STRS fund.
The retire / rehire scheme proposed by the Kettering Board is a strategy to game the system — setting up Superintendent Schoenlein to receive much more tax supported retirement benefits than he otherwise might receive. The attitude of “it doesn’t matter, because the local system is saving $40,000 each year” seems short sighted. The problem is, the tax money to fund this gaming of the system must come from somewhere — and, in the end, it must come from taxpayers. This retire / rehire scheme runs the risk of annoying a lot of voters by making them conclude that Kettering Schools is under control of an educational establishment clique — not under the control of the general public.
Superintendent Schoenlein is correct, according to STRS rules, a person receives retirement benefits when he or she is “eligible.” But, one condition for retirement benefit eligibility is that the person first “retire.” So here is the question, is there an ethical limit, to get what you want, to how far one can stretch the meaning of the word “retire,” or any word? A board that must continually ask the public for a vote of confidence via requests for new property taxes might remember that the public, I think, has already rejected the notion that legality is more important than ethics. The public has rejected a point of view that says, “It depends on what the meaning of the word ‘Is’ is.”
I love this exchange from “ALice in Wonderland”
“I don’t know what you mean by ‘glory,’ ” Alice said.
Humpty Dumpty smiled contemptuously. “Of course you don’t—till I tell you. I meant ‘there’s a nice knock-down argument for you!’ ”
“But ‘glory’ doesn’t mean ‘a nice knock-down argument’,” Alice objected.
“When I use a word,” Humpty Dumpty said, in a rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”
“The question is,” said Alice, “whether you can make words mean so many different things.”
“The question is,” said Humpty Dumpty, “which is to be master that’s all.”
