If it becomes law, Ohio House Bill 388 would temporarily suspend retirement benefits for public employees who retire and later return to work in a public office. The benefits would only be suspended while they were working and would resume once the employee fully retired.
“We just don’t have the luxury with today’s economy to have loopholes such as this,” Damschroder said.
But some local public employees said each case should be looked at on its own merits.
Tim Smith, chief executive officer of the National Trail Parks and Recreation District, never planned to return to work after he retired in 2008. But his replacement resigned after only one year, and Smith agreed to return to work to assist the organization as it groomed a potential replacement. Smith said that should take place next year.
He was unsure of the specifics of the proposed legislation and couldn’t comment on whether it would have had an effect in his situation. But he noted that the retirement system is essentially a savings account for retirees and is compensation they earned after years and sometimes decades of service.
“I’m not sure that should be counted against the employee,” Smith said.
The legislation would not affect employees retroactively, and Damschroder said no employees should be faulted for taking advantage of current laws.
“We’re not in any way condemning anyone in the past who has participated in this because that’s the law,” Damschroder said.
Most local school districts and government agencies have at least a handful of retired employees who are now working and receiving public retirement benefits.
Jim Gay, superintendent at Tecumseh Local Schools, said one of his concerns is that banning the practice may make it more difficult to fill some positions.
The district has about 10 employees who have retired and were rehired in some capacity. Each of the employees went through an interview process after their retirement and were selected because they were the best candidate for the job, Gay said.
Several local superintendents said the practice saves taxpayers and school districts money because they are able to hire experienced employees at a reduced salary. Otherwise, the employees wouldn’t retire in the first place, and districts would continue to pay larger salaries.
“We would lose some great people that do an excellent job for the students of this district at a reduced cost. We’d also have difficulty filling at least one of the teaching positions that had been reduced to half-time,” Gay said.
“The certification area in this case is more difficult to fill, and those that are looking for employment would rather have a full-time position.”
Kraig Hissong, superintendent at the West Liberty-Salem Local School District, agreed that public employees and elected officials took advantage of the system about a decade ago. But in recent years, most public offices have developed policies that restrict the pay and benefits that recently retired employees can receive if they do come back to work.
At West Liberty-Salem, an employee who returns to work can only be rehired at the lowest possible wage and they cannot receive any increases in wages or seniority while working for the district. Several districts also have policies in which retired employees can only return for one year at a time, and their contracts are reviewed yearly.
“A better solution to this may be to simply raise the retirement ages, which is what the retirement systems are working on at this time,” Hissong said. “This will keep people working longer and therefore they may be at an age where they are more ready to retire.”
The proposed legislation would also affect elected officials.
Clark County Sheriff Gene Kelly receives retirement benefits and said it’s hard to say what he would have done if the legislation had been in effect when he was elected. He noted he hasn’t received a pay increase in eight years and will not be allowed to for several more years. In many cases, he’s seen members of his staff retire, and then take jobs in the private sector the next day.
“Anyone would have to look at the totality of the impact on what it would do to them,” Kelly said.
Damschroder said there are numerous cases across the state in which public employees are taking advantage of the current laws to increase their salary. He said the proposed changes would also help make sure the state’s retirement system will continue to be sustainable in the coming decades.
“The pension system was meant for when you stop working, you’ll have a solid income for the rest of your life,” Damschroder said.
He said the legislation has received support from both parties and is something that should have been introduced years ago.
“This is a very obvious step that should be corrected,” Damschroder said.
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