LEWISTON, Maine — Bill Webster, the usually mild-mannered superintendent of schools, has drawn a line in the sand: Staffers who retire and get pensions will not be rehired for the same jobs and salaries.
“Not on my watch,” Webster said. “We can’t spend ourselves to the poorhouse.”
If you want to stay in your job, don’t retire, he said. “If you want to retire and work someplace else, fine.”
He said he didn’t understand how any organization could double-pay employees.
“School employees argue, ‘That’s my money,'” Webster said. “Well, it really isn’t their money. It’s the public’s money.” Taxpayers fund a percentage of public employees’ pensions, and in Maine, the pension fund has been chronically underfunded.
Webster’s position is unusual for a school superintendent.
At a Maine superintendents’ meeting in January 2011, Webster voiced his opposition to double-dipping. “I was one of the few, if not the only, superintendent who had this perspective,” he said.
His predecessor, Leon Levesque, retired in 2006, began getting a pension, was rehired as superintendent by the Lewiston School Committee and continued to get a salary. In 2009, his annual salary was $113,300 and his retirement income was more than $100,000 a year. Based on U.S. Social Security Administration life expectancies, Levesque’s projected pension income could be more than $2 million over his lifetime, depending on cost-of-living increases.
The practice is common among state employees.
A Maine State Retirement System list provided by request under Maine’s Freedom of Access Act shows more than 1,256 people in 2011 were retired with pensions and also drawing paychecks from the state or a school district. The highest-paid on the list were school administrators:
* Mt. Blue School District Superintendent Michael Cormier retired in 2009, started drawing a pension and was rehired as superintendent. In 2011, his yearly pension was $56,400; his annual salary, $99,332.
* Jay School Department Superintendent Robert Wall retired in 2010, started drawing a pension and was rehired as superintendent. In 2011, he received a $56,712 yearly pension and an annual $91,219 salary.
* Susan Martin, who was head of English Language Learners and is now chief academic officer for the Lewiston School Department, retired in 1998 at age 47. She was rehired by Lewiston in 2006. In 2011, Martin’s annual pension was $31,500; her annual salary, $77,311.
School Committee concerns
Webster told the Lewiston School Committee that he’d hire retired workers for lower-paying positions. If a retiring teacher wanted to become an education technician or substitute teacher, that would be “great,” Webster said.
Even though the School Committee has no policy on prohibiting double-dipping, Webster has the authority to decline to rehire retirees. Maine law says it’s up to school superintendents to recommend whom to hire; school committees approve candidates.
His position has caused discomfort and questions among School Committee members. The School Department does not have an obligation to rehire employees who retire, said attorney Daniel Stockford of the law firm Brann and Isaacson. An employee “must actually terminate employment in order to begin collecting retirement benefits,” Stockford wrote in a letter given to committee members.
School Committee member Bob Connors, a former Lewiston school superintendent, didn’t see Webster’s logic.
Rehiring a retiree with a pension doesn’t cost the school department any more, since someone will get a salary, Connors argued. And the school department doesn’t have to pay for health coverage, since that’s provided to retirees by the state.
Webster is ruling out a group of experienced, competent, retired workers, Connors said last week. “I disagree with his position that denies a person employment because they’re retired.”
Webster said that with so many jobs lost in the tough economy and recent college graduates unable to find jobs, “to me, double-dipping is immoral.”
Connors said, “I guess that makes me immoral, then.”
After Connors retired from Lewiston, he worked as interim superintendent at a few districts, including Regional School Unit 4 in Sabattus.
Rob Walker of the Maine Education Association, the state teachers’ union, said not all districts “have the luxury” of telling retirees they won’t be rehired.
In Fort Kent, a physics teacher who is “gifted and talented” retired, Walker said. Fort Kent couldn’t find another physics teacher, so that teacher was rehired.
“It has no effect on the local budget, no effect on the retirement system,” Walker said.
He said Webster’s position “sounds like more of a personal choice.” It cuts off options for retirees and school districts, Walker said.
Webster isn’t like most superintendents in Maine. Before he came to Lewiston in 2011 and before he was superintendent in the Ellsworth area, he was CEO of Haven’s Candies in the Portland area. He also spent years as a controller for Hannaford supermarkets. One reason he was hired in Lewiston was his business background.
Public more generous
Public-sector jobs are more generous than the private sector when it comes to retirement, Webster said. Pensions are things of the past. Some companies had pensions and “went bankrupt because of it.”
Today, most have 401(k)-type plans in which workers control their own retirement savings and employers contribute. With that kind of plan, “there is no liability to the organization over and above what they contribute,” Webster said. “The risk has been moved from employer to employee.” If employees invest in the stock market and the stock market tanks, it’s the employee who’s at risk, not the organization.
As long as taxpayers — and not public employees — bear the risk of paying pensions, there’s a chance the current payout level is unsustainable without more tax money, Webster said.
The public sector is where the private sector was 25 or 30 years ago, Webster said. “One part of the attractive nature of public employment has been the nest egg. You put in your 20 or 30 years, you retire and you’ve got a very comfortable pension, often after working to an age that’s far younger than a typical retirement age would be in the private sector.”
For years in Maine and across the country, educators and other government workers put in enough years — 20 has been common — to qualify for a pension, then retired and continued to work in the same job while drawing a pension and a salary.
It is perfectly legal, Webster said. Many Maine school districts “are happy to play this game” to save on health insurance costs. Because state taxpayers pay for pensions and health coverage, districts can rehire retirees without paying medical coverage, saving a district about $10,000 a year.
His refusal to rehire retired workers — one last year and two this year — is not just about Lewiston taxpayers. It’s about taxpayers across Maine, Webster said.
A law proposed by Gov. Paul LePage’s administration and passed last year as part of the budget process reduces the cost of double-dipping. The retirement age was increased from 62 to 65 for new state employees, and double-dippers can get only 75 percent of their incomes if they are receiving pensions. They are also restricted to five years of employment after retirement.
Earlier this year, Sen. Dawn Hill, D-Cape Neddick, introduced a bill that would limit these new restrictions to the mostly highly paid administrative positions, that of superintendents and principals, but would continue to allow teachers and other state workers to retire with pensions and be rehired at full salary. That bill failed by majority vote in Appropriations in May.