Cover Story

The Revolving Door

by Jeremy Alford

Written by Jeremy Alford
Wednesday, 31 March 2010

A state law that allows public school employees to retire and then re-enter the system is raising eyebrows in Lafayette and the Louisiana Legislature.

It's difficult to quantify how much the retire-rehire program, which went on the books some eight year ago, is costing local school districts.

Written by The Jeremy Alford
Wednesday, 31 March 2010

ABOUT TWO YEARS AGO, LAWRENCE P. LILLY SCORED the public sector equivalent to a golden parachute - those lucrative benefits private companies usually bestow upon parting executives to ensure a soft landing - except in his case, he was never forced to jump from the plane. Thanks to a state law, Lilly was allowed to retire from the Lafayette Parish School System and then be rehired in his old position as deputy superintendent of human resources and operations.

In all, his retirement lasted just a single day. After a 12-month waiting period, Lilly was not only drawing his regular salary, but also pulling down retirement benefits at the same time. Today, he takes home $118,152 in standard annual pay as well as $5,236 from the retire-rehire program and $2,586 in other benefits per month. That's a gross of roughly $212,000 each and every year. Not bad for a human resources gig - the U.S. Bureau of Labor Statistics estimates that a human resources manager in Louisiana makes on average $68,340 annually.

Lilly, now 66, will be the first to tell you that he would have eventually reaped the benefits of retirement one day; the retire-rehire program just permitted him to do it sooner than later. Plus, by retiring earlier than he had planned, his monthly benefit checks are smaller than they would have been if he had stayed in the state's retirement system and notched a few more years. "I have nothing to hide," says Lilly, who has been in the Lafayette school system for 36 years. "I earned that retirement. That retirement is mine."

Presently, Lilly and the Lafayette Parish School System are still making contributions into the Teachers' Retirement System of Louisiana while he's reemployed. While the retire-rehire program doesn't allow Lilly to receive any additional service credit or accrue more retirement benefits, it permits him, upon termination of service, to be refunded the employee contributions he paid into the system while he was reemployed. As for the payments made by the school system on Lilly's part, the retirement system gets to keep that cash.

It's difficult to quantify how much the retire-rehire program, which went on the books some eight year ago, is costing local school districts. In all likelihood, however, Lilly's successor's starting pay, which comes directly from the school system's budget, would be less than $118,152.

LPSS Assistant Superintendent Lawrence Lilly makes
an additional $82,000 annually through state
retirement programs.

It's the way the law is being abused in some parts of the state that has many fearing it could eventually become a drag on the retirement system, and Lafayette has become the poster child for this trend. In response, lawmakers from the region are pushing legislation during the ongoing regular session to reform the program, and most stakeholders seem poised to take action.

THE RETIRE-REHIRE PROGRAM WAS NEVER MEANT to be used by central office staff and administration types, says Tom Tate, director of government relations for the Louisiana Association of Educators. It was intended to keep qualified teachers on the job even after they chose to retire, an obvious solution to the challenge of attracting less-qualified teachers to begin their careers in Louisiana's public setting. "In some of the River Parishes, you're seeing 45 percent of teachers returning to classrooms, so it's been beneficial," Tate says. "But there seems to be some abuses where schools are allowing their central staff to come back."

Practically everyone interviewed for this story agreed that teachers, and teachers alone, were the intended targets. In fact, nowhere in the current law are there guidelines for determining the salary of a reinstated employee like Lilly. There's but one sentence on the topic, and it addresses only one kind of job: "The salary of any retiree who is reemployed as a full-time teacher pursuant to the provisions of this Section shall be based on the salary schedule which accounts for all prior years of teaching service and pertinent experience."

Tate says, as proposed, the concept was a "good bill," and most observers expected to see poorer parishes cashing in on the program. But today, even those parishes flush with cash are taking part, and abuses are evident in a handful of parishes as well, he adds, like Calcasieu, Iberia and, especially, Lafayette.

In addition to Lilly, there are 124 retirees who have returned to work under the retire-rehire program in Lafayette Parish. Of that count, another 11 are located in the central office like Lilly, including the following:

All told, there are 12 central office staffers in the LPSS drawing down retire-rehire benefits totaling nearly $283,000 each year from a program that was not meant to benefit them, critics of the program argue. And, with the legislative session now in full swing and serious influencers getting aboard the change train, it's only a matter of time before the program undergoes some major alterations.

SINCE THE BULK OF THE PERCEIVED ABUSES is happening in Lafayette, it's only appropriate that the proposed changes come from lawmakers representing the area. Leading the way, at least in terms of noise, is Rep. Rickey Hardy, a Democrat who has filed two bills for debate during the session. That the movement should come from his corner only makes sense - he not only serves on the House Education Committee, but he previously served on the Lafayette Parish School Board for 12 years.

His House Bill 226 would only allow teachers to utilize the retire-rehire program, and only if they have at least three years of classroom experience prior to their retirement. Hardy also has House Bill 392, which would impact all of Louisiana's retirement systems, pulling in everyone from law enforcement officials to state employees. It would essentially prohibit anyone who retires on or after July 1, 2010, and is subsequently rehired from accruing additional benefits.

Hardy says the law should be addressing critical, and only critical, shortages among teachers. "This law is being abused and misused by administrators," he says. "They're ripping off taxpayers and sucking the taxpayers dry. What is the benefit for the student here? Only the individuals benefit. This is an outrage and something for all the good old boys. It's criminal, is what it is. You can't even do this in the private sector."

But Hardy's motives are being questioned by Lilly, among others. Here's the conspiracy theory: Hardy, who has a long history with the local school system, has an ax to grind. "This is a personal thing directed at me," says Lilly. "I know it, and Mr. Hardy knows it and he knows that I know it."

When pressed for further information, Lilly clams up. "I'd rather not discuss that," he says.

Hardy counters that he has no idea what Lilly is referring to and, whatever it is, it must be a fabrication. "I have no clue what that is all about. If this was something personal, I would have settled 12 years ago when I was on the school board," Hardy says. "The fact of the matter is that what Lawrence Lilly is doing is plain wrong. He is in it for himself, not the children."

In the Legislature, and back home in his district, Hardy has cultivated the image of a sort of wildcard who might say and do just anything. His workload for the ongoing session has actually become the stuff of instant lore and legend, leaving many to scratch their heads and ask, "What's up with Hardy?" As a true freshman, he has filed more than 30 bills for consideration, ranging from a constitutional amendment that would prohibit the elderly from running for public office to legislation banning people from wearing sagging pants.

Lafayette lawmakers Page Cortez, left, and Joel Robideaux
will seek retirement system reform during the
session, which began Monday.

As such, the smart money this session is on House Bill 519 by Rep. Page Cortez, a Republican. His bill would prohibit retirees in the TRSL from receiving retirement benefits during their period of reemployment unless such retirees are reemployed as classroom teachers in grades K through 12 in the areas of mathematics, biology, chemistry, physics or special education. "I think that's the bill that has a better shot at succeeding," says one longtime lobbyist closely involved with the retirement process.

Furthermore, Cortez's bill would require the school superintendent to certify to the Board of Elementary and Secondary Education and the TRSL board of trustees that a shortage of teachers exists in the area in which the retired teacher was hired to teach. "My bill is different from any other in that it requires the superintendent to justify the rehire," Cortez says. "They just can't have carte blanche. I've been on the retirement committee for three years now, and we need to have some checks and balances. But the program is important. Without it, we would have teachers with less experience. But right now, because of the abuses, it's difficult to tell if we're actually losing money on the program."

A message was left for Lafayette Superintendent Burnell Lemoine at his office last week, but he was unable to comment before this story's deadline.

WHILE IT'S UNCLEAR WHAT KIND OF CHANGES are in store for the retire-rehire program, it's fairly certain that something will be moved through the legislative process this year - if for no other reason than the fact that both of the Legislature's retirement chairmen are onboard for reform.

House Retirement Chairman Joel Robideaux of Lafayette, who on Monday was elected the state's first speaker pro tempore with no party affiliation, says something has to give. "I think this is an issue we need to revisit soon. As for what kind of changes need to be made, that's something I'm not sure about yet."

Senate Retirement Chairman Butch Gautreaux, D-Morgan City, says he also expects some form of the retire-rehire legislation to pass, and it's about time in his opinion. "Maybe it's time for some of these people to retire and stay retired," Gautreaux says. "At some point, you have to start questioning the value of this program, and I think some of those questions are going to be answered this year."

Gautreaux also has his eyes on the state's DROP program, which is another retirement option that public employees can take. Lilly, for example, is a participant and he's pulling down an extra $31,000 through the program in addition to his salary and retire-rehire benefits.

It promises to be an emotional issue; Gautreaux says his e-mail is already filling up with messages from teachers warning him that he'll never be elected to another office if he goes through with his planned legislation to eliminate or possibly reform the state's DROP program. "I don't take any joy in trying to make tough decisions, but I know there are a lot of people who regret going into the program and they want to get out," says Gautreaux, who is term limited. "The program is not functioning well, and there are abuses here as well."

DROP is an optional program that allows members of the TRSL to freeze their regular retirement benefit and to have that benefit deposited in a special account at TRSL, while still working and drawing a salary from a TRSL-reporting agency or school. In 1990, the Parochial Employees' Retirement System was also added to DROP. Since then, some public employees have seen their salaries just about double due to deferred pension payments.

All of this talk about additional pay comes when Louisiana is facing a $1 billion budget shortfall for the fiscal year that begins July 1 and a subsequent $2 billion gap next year. That makes these retirement topics all the more timely - and combustible. But the issue is also about jobs, Lilly points out, which seem just as hard to land as to keep these days. To him, that may very well be the argument that could deflate the momentum built up by legislative players like Hardy and Cortez. "These programs are keeping Louisianans employed in jobs at home," Lilly says. "If these bills pass, it'll be all the easier for someone outside the state to come in and take these jobs. That just isn't right, and neither is taking retirement benefits from people who have earned them."

Jeremy Alford can be reached at [email protected].