Rehiring retired teachers offers short-term savings, but with long-term liabilities

In increasing numbers, teachers in Ohio are redefining retirement -- and school districts, teachers (young and old) and the public should be asking themselves if this redefinition is good public policy.
By definition, to retire is to "give up one's work, business, career, etc., esp. because of advanced age."
But retiring teachers today are not of advanced age, at least not the largest majority. And in growing numbers, they aren't giving up their careers; they're trading one check for two.
It is not unusual today for retirees to pick up a second job to supplement their pensions. The relatively young age of many retirees, coupled with economic uncertainty, a desire to maintain a pre-retirement standard of living and a recognition of longer life spans all contribute to the trend.
But in the case of rehired teachers, they are not getting new jobs, or even the same job in a different setting. They are retiring one day and returning virtually the next day to the same job in the same school district, probably even the same classroom.
Take the example in Boardman, where the board of education two weeks ago accepted the retirement of eight veteran teachers, and, during the same meeting, rehired those same eight teachers. Three other teachers who had retired last year were also rehired for another year.
Schools save
The school district says it is getting a good deal, because the experienced teachers are rehired at a year's experience level -- in Boardman's case, about $35,000 with a master's degree. Also, the board saves on the teacher's health care costs, because the health insurance is shifted to the State Teachers Retirement System of Ohio.
What's not to like?
Well, as already stated, it runs counter to what retirement is supposed to be. If the teachers are perfectly capable of continuing to work, that's what they should do.
The growing popularity of these rollover retirements is another indication that public employee fringe benefits have gotten out of balance with the private sector realities that govern the economic destiny of most taxpayers.
A teacher can retire after 30 years service and receive 66 percent of the average of the three highest years of his or her employment, which is known as the final average. If the teacher stays on for five more years, he or she would retire at 88.5 percent of the final average.
Do the math
In Ohio, the average maximum salary for a teacher with a master's degree is about $50,500. A teacher hired right out of college could easily retire at the age of 52 with retirement pay of $33,330 a year, or at age 57 at $44,690 a year. Today, the life expectancy of an American male is 74; a female, 79. That makes retirement potentially a million-dollar proposition, especially for teachers in districts where the pay is above the state average.
This roll-over encourages teachers to retire and seek rehiring as they approach or reach their maximum retirement benefit. It almost demands it of a prudent teacher.
And, once a teacher is getting $70,000 or $80,000 a year in combined salary and pension, the likelihood of that teacher staying on becomes ever that much greater.
Meanwhile, eager young college graduates stand on the sidelines watching as, in effect, their former teachers get hired for what could have been their jobs.
In an area where teaching jobs are going begging, rehiring would still have its flaws, but it would make some degree of sense -- a retread teacher being better than no teacher at all.
But that's not the case in the Mahoning Valley. Here, every year dozens of graduates of the College of Education at Youngstown State University receive their degrees, but either have to go into other lines of work or move from the area. Rehiring is a disservice to the community.
Rehiring also breaks the natural pipeline that a school district would expect to have as older teachers retire and younger ones take their places. Rehiring inevitably will lead to top-heavy faculties. While experience is a fine thing, so is new blood.
Boardman's superintendent, Frank Lazzeri, says that whatever the flaws may be in rehiring retired teachers, in Boardman's case it makes good economic sense. A rehiring provision was worked into the district's labor contract last year and will run the three-year life of the contract. Over two years, 12 teachers have taken advantage of the provision.
Lazzeri says the savings to the school district can be as much as $40,000 per teacher per year, and, depending on how many teachers take advantage of the provision next year, the district could save as much as $1 million.
That, he says, is a savings that taxpayers can appreciate and that outweighs any disadvantages.
Certainly, those short-run savings are impressive. Seductively so, we suspect.
Here to stay?
Don't look for either the board or the union to be eager to drop this provision of the contract, which gives validity to our concerns about the long-term effects in school districts where teachers retire in name only.
The STRS is watching the trend, but doesn't seem very concerned about whether encouraging retirement and shifting health care costs from local districts to the system will upset actuarial tables. Some adjustments, however, seem inevitable, and when they come, will the Ohio Education Association stand quietly while those costs are passed on to their members or will they attempt to negotiate more from the state's school districts? The question is rhetorical.