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CLAWSON, Mich. - School administrators in metro Detroit districts are considering whether to retire and then return to their jobs as independent contractors, according to the (Royal Oak) Daily Tribune. Retiring allows them to begin drawing a state pension, while being rehired privately for the same job allows them to continue to collect a salary, the Tribune reported.
Drawing both a pension and a paycheck was once considered "double dipping," but is allowed under Michigan's new pension reform law, according to the Tribune. School districts save money when they re-hire the retiree privately, because the district typically does not offer benefits and is no longer required to contribute to the state retirement system on behalf of that employee, the Tribune reported.
In Clawson Public Schools, Superintendent Cheryl Rogers has retired, but is expected to return July 1 under a contract between the district and a third-party employer, according to the Tribune. The district will continue to pay her $140,000 annual salary, but will no longer pay $65,000 in benefits, the Tribune reported.
Nine administrators in Hazel Park Schools are considering similar arrangements, which could reduce the district's labor costs by $2 million over five years, according to the Tribune.
In Oakland Schools, Superintendent Vicki Markavitch retired, but will return in a month under a private contract that pays her nearly $187,000 annually for up to three years, the Tribune reported. The district will save about $75,000 yearly on her wages and benefits, mainly because it will no longer pay $45,000 annually into the state retirement system on her behalf, the Tribune. She will continue to receive a $26,000 annuity, down slightly from her pre-retirement annuity of $28,000.
SOURCES:
(Royal Oak) Daily Tribune, "Superintendent
retires — for now," June 1, 2010
(Royal Oak) Tribune, "Oakland Schools chief retires, then gets rehired," May 21, 2010
FURTHER READING:
Mackinac Center for Public Policy, "Why is the State Bribing Teachers to
Retire?" March 5, 2010
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