Rules let educators cross state lines to get pensions along with salaries
By Diane Rado and Duaa Eldeib, Tribune reporters
3:20 p.m. CST, January 29, 2011
chicagotribune.com
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Hank Bangser collects a $261,681 state pension after retiring as superintendent of New Trier Township High School District. Now, he's a full-time superintendent in Southern California, earning $170,000 at a job he'd be barred from in Illinois if he wanted to keep getting retirement checks.
His annual pension-salary combo: $431,681.
In tony Scottsdale, Ariz., retired Wheaton Superintendent Gary Catalani is back in administration too, earning $195,000 as school superintendent on top of his $237,195 Illinois pension. His total: $432,195.
A Tribune investigation has found that crossing state lines is one of the most lucrative ways for retired superintendents to collect multiple government checks without breaking pension rules, according to salary and pension data. Across the border, the retirees are free to work as full-time public school superintendents and collect Illinois pensions.
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Illinois law seeks to award pensions to people who really are retired, said David Urbanek, spokesman for the Teachers' Retirement System for suburban and downstate educators. Generally, the goal is to prevent retirees from collecting a public school pension while still working full time in the schools, Urbanek said. If they do so, their pensions will be suspended.
Crisscrossing the country or hopping to a neighboring state to work impacts the cash-strapped, taxpayer-subsidized retirement system, which must dole out pension checks to retirees who would not get them if they worked as full-time superintendents in-state.
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By jumping to Indiana, retired south Cook Superintendent Eric King takes in nearly $335,000 a year — a $166,608 Illinois pension on top of his $168,343 salary as Muncie school superintendent.
In Wisconsin, retired East Maine 63 Superintendent Kathleen Williams just started a superintendent job in Wausau, earning $156,000 while collecting her $177,711 Illinois pension.
And the practice works both ways.
The Tribune also found retired out-of-state superintendents jumping into Illinois with the promise of high administrator salaries and hefty pensions common in the Chicago region.
Educator Rebecca van der Bogert retired from Massachusetts, earning a $21,974 pension. She then worked as superintendent in Winnetka District 36, earning $374,496 in her final year. Now, she collects a $169,050 Illinois pension while she's head of school at the private Palm Beach Day Academy in Florida.
Retired Superintendent Robert McKanna of Palatine's District 15 earned $327,596 in his final year in the district. He collects a $180,396 Illinois pension, in addition to a $12,977 pension from the state of New York. He's now listed as a program chair at Argosy University in Schaumburg.
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Jeremy Gold, a pension expert and New York-based consulting actuary, called earning multiple government incomes "indicative of sloppy governance and a cavalier attitude by those 'public servants' who exploit these loopholes selfishly."
"Illinois is a poster child for pension abuses," Gold said. "One of my colleagues calls this child abuse because our children must pay for our fiscal irresponsibility."
But the superintendents point out that they have followed all pension laws and rules.
"I worked uninterrupted for 36 years and obviously made all the (retirement) contributions, as did all of my colleagues," Bangser, 61, said. "The point is that, I think like anything else, you operate under the rules, restrictions and guidelines of whatever is in place at the time."
Bangser said he moved to California to be closer to his daughter and granddaughter. Although his base salary is $170,000 at California's Ojai Unified School District northeast of Ventura, Bangser said furlough days this year will reduce that to about $161,000. He doesn't get health benefits in California because he still gets coverage from Illinois.
Like Bangser, many of the superintendents interviewed said they wanted to continue their life's work.
Kathleen Williams, 61, said she missed education and wanted to return to work after retiring from East Maine in 2009. After doing some part-time consulting in her old district, she took the full-time superintendent's job in Wausau, in north-central Wisconsin. She started there Nov. 1.
"The big difference for me is that when you're doing it post-retirement, the stress level is not there," Williams said. "You are doing it because you truly want to be there, and you are choosing to give up not working to be able to do what you love."
But staying in one state to do that is not as lucrative, according to national pension studies, because states usually restrict the hours or income of a public retiree who wants to work in a government job and still collect a pension.
Recently, Illinois tried to further curtail retired superintendents who work as part-time administrators. The effort, however, has lost steam.
No limits are in place for the superintendents who cross state lines, and no formal monitoring exists to ensure that even in-state retired superintendents are working reduced hours.
"In the law, there is no enforcement mechanism," Urbanek said.
Legislators recently approved government pension reforms, but the changes affect only employees just starting to contribute to their pensions.
Retired Judge Gino DiVito, who has studied constitutional issues related to pensions, said retired superintendents could mount a legal challenge if Illinois tried to reduce their pensions while they are collecting out-of-state salaries.
Critics say the legal issues are in dispute and the state should go further in trying to rein in pensions.
"We have allowed a system to develop that is grossly underfunded and that has very generous benefits," said Laurence Msall, president of Chicago's Civic Federation, a nonprofit government research organization. "To draw a pension from the state … and then immediately go get another job as a superintendent or in another teaching capacity — they're really not retiring."
Brent Clark, executive director of the Illinois Association of School Administrators, acknowledged the sensitivity of the issue in a tough economy. Lawmakers just passed an income tax increase to help alleviate Illinois' fiscal crisis.
"You've got a lot of economic distress, and when you have these times, you get a lot of push-back, inspection, of people who earn high salaries," he said.
Some superintendents contacted by the Tribune reacted with anger — one hung up — and others vigorously defended their choices.
"Somebody who retires can go to another state and work. To me, that is the story, and that's what I've done," retired Oak Park and River Forest District 200 Superintendent Attila Weninger said.
His move had "nothing to do" with the part-time limits connected to staying in Illinois as a superintendent, he said. Weninger is now interim superintendent in the Stevens Point Area Public School District in Wisconsin, earning $149,500 while collecting a $180,302 pension from Illinois.
Many superintendents said the pool of highly skilled administrators willing to take on a demanding superintendency is shrinking.
At Gale-Ettrick-Trempealeau School District in Wisconsin, board President Tanya Gendreau said the board hired retired Calumet City Superintendent David Grace because he was the most qualified.
"We knew he was retired," Gendreau said. "We were looking for someone with experience."
Grace earns $108,000 while collecting his $149,782 Illinois pension.
The Tribune located retired superintendents working elsewhere through Internet searches, newspaper stories and public records. The state system doesn't track those retirees.
Illinois State Board of Education data showed dozens of superintendents moving into Illinois with 20 or more years of service, but it is not clear if they are getting pensions elsewhere. Some out-of-state pension systems would not release information about their retirees.
Michigan did disclose several pension amounts. Janice Matthews gets a $73,489 pension from that state, while earning $201,301 last year as superintendent of Oak Grove District 68 in Lake County.
Dale Martin gets a $73,908 pension from Michigan and a $78,147 pension from Illinois, after working as superintendent in Downers Grove District 58.
The Texas system would confirm only retirement status, not pension amounts. Both Evanston/Skokie District 65 Superintendent Hardy Murphy Jr. and Elgin-based U-46's former Superintendent Connie Neale are Texas retirees. She also gets a $41,135 pension from Illinois.
After a 42-year education career, LeRoy Rieck, 68, gets three pensions: $43,106 from Illinois, where he recently retired as superintendent of West Chicago's District 94; $24,147 from Pennsylvania; and about $30,000 from Wisconsin.
Eric King, the former Matteson District 159 superintendent, said he's not sure what he'll do next. He went to Indiana in 2008 to become Muncie Community Schools superintendent, and he'll leave when his contract ends in June. That doesn't mean he'll stop working.
"Retirement is just a concept,'' said King. |
