To Comfort The Afflicted
And Afflict The Comfortable

To Comfort The Afflicted And Afflict The Comfortable

Friday, July 30, 2021

Observercast

Gaming The [Retirement] System

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BY EDWIN E. VINEYARD

For several decades there has been continuing concern among retired educators and others about the sanctity of the Oklahoma Teacher Retirement System. One concern has been about the tendency of the Legislature to pass bills promoted by a single legislator to favor a particular retiree, or class of retirees, at the expense of the system. Much concern has been expressed about special legislation that allows schools and retirees to abuse the system for the advantage of a person and a school by double-dipping – being both retired and still working.

Currently scarce resources of the Teacher Retirement System are being exploited by schools to save salary dollars. Schools are allowed to hire back a retired teacher within a few months of official retirement. The teacher continues to draw a retirement check while the school pays him/her a salary. Usually the teacher makes more than before retirement, and the school saves a bundle on salary.

The Oklahoma Teacher Retirement System gets the fiscal shaft.

It is not the occasional hiring back of a retiree at less than half-time for a modest stipend that is of concern. That is not the real issue. But there is something wrong with retiring for three months, drawing full retirement, then going back to work half-time or more for second salary for doing the same job. Both the school and the retiree are abusing the system at the ultimate expense of all beneficiaries.

Both the retiree and the school are gaming the system. It is perfectly legal – since the Legislature has made it so. But on close examination, it is easy to see that there is something inherently wrong about laws that allow exploitation of the retiree trust fund for the benefit of school budgets and a few privileged retirees.

However, some seem to think this is just great. Or, at least it appears so in the press. Not long ago facts were printed in a local newspaper about how much extra some rehired retirees were now making, yet how much the school was saving on these salaries. These were mostly second echelon administrators who retired and returned, making more than ever before but costing the school district less. How delightful! Win – win! Everyone, including the newspaper people, thought this was just great. Nobody considered that the losers were little old retired folk for whose benefit the trust fund money was intended.

This same Legislature that provided for a loophole for abusing the retirement system is constantly engaging in a harangue regarding the poor fiscal condition of the retirement system. They say that the system cannot afford even the pittance of a 1% a year COLA for its elderly retirees, while they allow fund coffers to be milked by schools and colleges and to be abused by some younger retirees.

Only about five years ago the Legislature handed out lucrative benefit increases to the highest paid school personnel preparing to retire. They did so by removing salary caps and allowing certain buy back privileges for earlier years. This increased the unfunded liability of the system greatly. Perhaps worse, it added to the size and the unfairness of the chasm between the level of benefits received by newer, younger retirees and the elderly who have been retired much longer.

Newer retirees do quite well. There is no need for them to be concerned about COLAs for years to come. But some who have been retired 20 years or more are hard pressed to maintain a decent standard of living. Some elderly retirees fall below poverty criteria. Nobody seems to care.

Younger retirees are better organized and more active that the elderly. Generally new retiree benefits get more attention and are better supported by the professional associations of the active professionals. In general, elderly retirees have had few champions to help them make their case to the Legislature.

For several years, the Oklahoma Council of Retired College and University Presidents made legislative proposals to take care of the elderly with higher COLA’s. These have been introduced in bill form by friendly legislators in several sessions. But each time these have met a cruel fate at the hands of legislators who claimed to be concerned about the actuarial condition of the system.

The Oklahoma Legislature has used the “one size fits all” negative excuse for any consideration of the human plight of the elderly retirees for which it has responsibility. While they can allow convenient loopholes for the exploitation of retirement system funds for schools or politically influential interest groups, they turn a blind eye toward a segment of the retiree population with the greatest need.

Then they hide behind a cowardly broad brush ruling, “No COLA’s unless the actuarial cost is paid in advance.” Let them look at reality instead and take care of the need.

Dr. Edwin E. Vineyard, aka The Militant Moderate, lives in Enid, OK and is a regular contributor to The Oklahoma Observer

 

Arnold Hamilton
Arnold Hamilton became editor of The Observer in September 2006. Previously, he served nearly two decades as the Dallas Morning News’ Oklahoma Bureau chief. He also covered government and politics for the San Jose Mercury News, the Dallas Times Herald, the Tulsa Tribune and the Oklahoma Journal.