Change may spur teachers to retire

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Change may spur teachers to retire

By Martha Deller

Star-Telegram, May 4, 2003

School districts across Texas are bracing for a flurry of retirements at the end of the school year as employees rush to beat a soon-to-close loophole that allows them to earn thousands of dollars in Social Security benefits for one day's work.

Teachers associations and state retirement officials said they have been flooded with calls from employees who are concerned that Congress is about to pass legislation that would make Texas educators work five years -- instead of one day -- in a school system covered by Social Security to collect spousal benefits along with their own retirement benefits.

The bill has been approved by the U.S. House, and it is expected to pass in the Senate.

"We think the loophole will close about the middle of August," said Larry Shaw, executive director of the United Educators Association, which represents about 12,000 Tarrant County teachers. "Those who are not through the loophole are out. So there will be more teachers retiring this year to take advantage of the early loophole or risk losing $700 to $1,300 a month for the rest of their life."

In 2002, one-fourth of all Texas public education retirees (3,571) took advantage of the loophole, which allows them to end their career by working their last day in one of about 50 Texas school systems that pay into both state and federal retirement funds.

According to a report by the General Accounting Office, the average Social Security deduction for one-day workers is $3, while their annual average spousal benefit will be $5,200.

The number of educators using the loophole has been increasing yearly, according to the GAO report. One school district that is covered by Social Security went from a single one-day worker in 1996 to 1,050 in 2002.

Some North Texas school districts, including Arlington and Keller, expect to see an increase in retirements this year because of the legislation.

"It's possible that this summer we will be faced with mass retirements of our senior employees who otherwise were anticipating working a few more years," said Charlene Robertson, spokeswoman for the Arlington school district.

Arlington officials were so concerned about replacing more than the usual number of retirees that they scheduled two meetings with prospective retirees to discuss their options, she said.

About 150 employees attended a meeting last week -- so many that extra chairs were brought in, Robertson said. Even if fewer employees show up at the next meeting, the district is facing the prospect of 200 retirements, more than double the usual number, she said.

Most were concerned about losing Social Security benefits, but many also wanted information about retiring and then returning to their old jobs, an option the state allows for paraprofessionals and some hard-to-fill teaching jobs, Robertson said.

"We could be caught in the lurch if we have a mass exodus in some departments -- say accounting -- with lots of senior people," she said. "Many of these people are not really ready to retire, but they feel pressured to keep their Social Security."

Peggy Buttner, assistant director of employee relation in the Fort Worth school district, said, "We've had numerous calls from people who were not even remotely planning to retire.

"I'm most concerned about the little widows, especially auxiliary employees like campus monitors and food service workers who don't make enough money to do without spousal benefits," she said.

Buttner's former employer, the United Educators Association, is one of three teachers organizations that have tried to help their members by lobbying against the law change as well as identifying school districts where they can earn their Social Security benefits.

Some of those districts charge a fee for the privilege of working one day. One school district earned $283,000 in fees in 2002, according to the GAO report.

Chrys Chumley, a counselor in the Keller school district, will spend the final day of her career cleaning classrooms in the West school district, one of a handful of Texas districts that pay into Social Security.

To be allowed to work there, Chumley will donate $500 to a West school district scholarship fund.

Chumley had planned to work another year at Keller-Harvel Elementary before retiring to Florida, where her husband is living and caring for an elderly relative.

"Living in Texas without my husband has been a little difficult. He's delighted I'm going to retire," she said. "It's really the best thing for me to do, but I do feel like I was forced into it."

The United Educators Association also directs prospective retirees to the University of North Texas, which has four departments that help school employees meet the Social Security requirement.

The university's Student Union has hired 250 school employees this year and expects to add 100 more before the summer, said payroll clerk Lanette McClure. The university requires those employees to work 40 hours during the school year before working the final day needed for their Social Security benefits, she said.

McClure says she has a waiting list of school employees who want to earn their Social Security credit at the university's Student Union.

"We have been bombarded in the last couple of months," she said. "A lot of people are talking about retiring this year who had not planned on retiring. We'll try to accommodate them, but we don't make jobs for them."

Martha Morolez de Anda, principal of Alice Contreras Elementary in Fort Worth, will be serving food in the university's Student Union on her last contract day, June 27.

Richard Kouri, spokesman for the Texas State Teachers Association, said the Social Security loophole is a hot topic among teachers, but he insists that other factors also drive retirements.

"There's no good way to pick up on how many people may be retiring because of this," he said. "With the economy down and investments getting hammered, that can slow retirements down.

"On the other hand, the last big pay raise was four years ago. It does follow that if you have the opportunity to get a Social Security benefit you may not have a year from now, that will certainly weigh as a factor."

The Association of Texas Professional Educators, which represents 100,000 employees, has also been inundated with calls, but it is taking a cautious approach to advising members.

"Our call volume on this issue has increased exponentially," said Ethan Herr, the association's legislative research coordinator. "With all the things happening on the state level with education, it's almost a rarity for us to get a call on anything but this issue."

Herr said he advises employees asking about retirement to consult a financial planner or benefits counselor.

"We're telling them to weigh the issue carefully," he said. "The amount they gain by qualifying for Social Security may not be as much as they will lose by retiring early."

The state's Teacher Retirement System has also received calls about Social Security payments, but spokesman Howard Goldman said the number of teachers putting in retirement papers does not appear to be increasing significantly.

Goldman said retirements have increased steadily from 10,948 in fiscal 1999 to 16,615 in fiscal 2002. Retirements are up slightly in fiscal 2003, he said.

"It's difficult to pin down, at least at this stage," Goldman said. "There are so many factors involved when people choose to do things."

"It's difficult to pin down, at least at this stage," Goldman said. "There are so many factors involved when people choose to do things."