By Maggie Thurber | for Ohio Watchdog
Double-dipping. No, not that yummy, frozen, tasty treat that is a favorite for kids of all ages. In Ohio, that’s what they call it when a public employee or elected official retires, begins collecting their public pension, and then is immediately rehired to perform the exact same job.
People often react with disgust when they hear of double-dipping in their communities, except in Maumee, Ohio, a suburban community just outside of Toledo, where the practice is being encouraged for two employees of the Maumee City Schools.
According to public notices, the Maumee Board of Education is considering a plan that would allow their superintendent, Greg Smith, and assistant superintendent, Ken Aerni, to retire and then be rehired for less than their current pay. Since they would begin collecting their pensions through the State Teachers Retirement System, the school district can pay them less while the two employees actually receive more income each year.
Another added bonus is that if they retire before June 30, they’re both eligible for a cos- of-living adjustment that equals 2 percent each year. If they wait until after June 30 to retire, they’d have to wait another 5 years before they can receive a cost-of-living increase.
Under the board proposal, both would retire for only one day. The amount of the reduced salary upon rehire has not yet been determined.
Double dipping is legal in Ohio, though House Bill 388, introduced last December, would outlaw the practice.
In many cases, public bodies see double-dipping as a way to keep employees they might otherwise lose since Ohio reformed its public pension system to address underfunding issues.
In Maumee’s case, the school district will save money in salaries while keeping two administrators, each with 35 years in the system. They also claim the double-dipping will keep the administrators in Maumee. Who wouldn’t, after 35 years, want to ensure that extra 2-percent annual increase, especially with Ohio’s already generous pension payouts, while keeping their current position?
It may be a short-term win-win for the community and their taxpayers: the district pays less and the employees get more.
And it’s a popular solution. A 2010 study by the Ohio Newspaper Association found that 150 of the state’s then 613 school superintendents were collecting both their pension and a salary. The study noted the superintendents increased their earnings by as much as 80 percent by double-dipping.
Whether double-dipping costs taxpayers in the long run has not yet been determined. When similar bills have been considered by the Legislature, the Legislative Service Commission, the state agency responsible for performing a fiscal analysis of bills introduced into the General Assembly, could not determine if it actually costs taxpayers more.
But they did conclude that any delay in actual retirement helps reduce STRS liability because the individuals are contributing to the system rather than drawing funds from it.
In Maumee, it was Aerni who raised the issue with a school board member, who then shared the idea with fellow board members during an executive session. But it wasn’t until after the board’s executive session at the Jan. 15 meeting that the two administrators made formal requests for retire-rehire status, Smith said. The board took no action at that time, other than to order the statutorily-required notices of public meetings to consider the idea.
The targeted resignation date for the assistant superintendent is April 1; for the superintendent it is Aug. 31. The board previously approved the retire-rehire practice, with the dean of students in 2002 and the head mechanic in 2004.
The first public meeting, to hear constituent feedback on Aerni’s request was March 4. Smith said the general tone of that meeting was informational with questions about the process being addressed. He also said there was general support for the assistant superintendent.
But teachers who attended that meeting wanted to know if they, too, were able to double-dip. Their collectiv- bargaining contract allows rehires after retirement, but does not require it.
The board will meet again on March 18 and March 25 with a goal of acting on Aerni’s request by March 25.
The decision on the superintendent won’t occur until August. “The board cannot take action on me until after the public meeting on August 5,” Smith said, adding that negotiations regarding his rehire salary won’t be completed until after that time. But waiting means that Smith won’t get his cost-of-living increases right away.
“My circumstances may be different than Mr. Aerni’s,” Smith said. “I am still looking at my options, which include possible qualifying time and STRS benefits of continued employment.”