Tracking double-dipping educators | Arkansas Blog

Wednesday, August 12, 2009

Tracking double-dipping educators

Posted By on Wed, Aug 12, 2009 at 3:08 PM

George Hopkins, the former state senator who now is director of the Arkansas Teacher Retirement System, is in the process of stirring up more than a spot of news.

Our Insider column this week has the leading edge of what's up. Lost amid all the hubbub about fake retirements by county elected officials aiming to claim both retirement and regular paychecks  has been a potentially larger scandal -- in terms of dollars -- involving members of ATRS.

Hopkins is in the process of seeking to reclaim what he estimated could be millions in improperly paid retirement benefits. He's already identified $111,000 in overpayment to a single former school employee now on the payroll of a state university. He's on the trail of another overpayment at ASU that could be larger.

Hopkins is also delving into the sufficiency of employment "terminations," such as that by which long-time Pine Bluff School superintendent Frank Anthony left his job for a month and then was rehired this month at full pay, plus retirement benefits.

Details on the jump.

 

Until a new law took effect July 1, members of ATRS who had retired were required to give notice to the system when they were went to work for agencies that are members of the ATRS system. Many apparently did not give the proper notification and there was no system in place to identify them. This was important because, until the law changed July 1, retirees who went back to work at an ATRS member agency had to give up $1 of retirement benefits for every $2 they earned each year on a new job above a certain threshold established by formula. Public school districts and colleges and universities are all members.

In the statewide attention to double-dipping -- inspired by state  law changes prompted by the federal government's effort to crack down on fake retirements -- Hopkins decided to aggressively move to set his agency right.

He's begun the process of obtaining payroll records from member agencies to match up with his records of retirees to see who might be drawing two checks and whether required retirement pay offsets were made in every case. The biggest abuse seems likely to have occurred at colleges and universities. Though members of ATRS by law, many colleges put most employees in a separate retirement system run by TIAA-CREF that is unrelated to, and thus undetectable by, ATRS.

Hopkins has already received payroll records from three universities -- UCA, UA-Monticello and Arkansas Tech. In that review, he found one employee who was paid $111,000 in retirement he should not have received on account of his regular university paycheck. Hopkins will be moving to collect such overpayments, either in  a lump sum or by withholding retirement checks until money owed is repaid.

Hopkins says the law protects names of individual receiving retirement benefits He will not  identify specifically those who he's found in arrears. But he says he plans to fully document the number found and the amount owed as the project moves forward. He expects significant overpayments to be discovered. He estimated $5 million, but it's only a rough estimate.

“We think there may be a significant amount of money we're owed," he said. "We have a fiduciary duty to our members who do not owe money to collect all that's owed us because that's how we pay benefits.”

Based on a document we recived under FOI, Hopkins has also filed an FOI request with Arkansas State University to follow up a tip that a highly compensated employee there may have been drawing full ATRS benefits since 2001. If so, the overpayment could potentially be $200,000 or more.

Hopkins said there should be no statute of limitation on attempts to collect such overpayments because "concealment" of overpayments by a failure to report a new job would override any time limit on recovery. He said he's not drawing a conclusion that failure to notify was intentional. He said he believed new law and regulations would make this more difficult in the future.

Retirees now may keep all earnings from new jobs after retirement, but the law insures that member agencies will report the hiring of former ATRS members and also pay the 14 percent salary match for the ATRS retirement fund for such employees, even if the employees are in a separate TIAA retirement system and not ATRS.

Hopkins also says he will insist that rules are followed on meeting termination requirements before a retired employee can go back to work and still draw retirement. He suspects this hasn't always occurred.

The new law requires a six-month retirement before going back to work (one month for those with 38 years of service). Hopkins said the employees truly had to be terminated. They had to leave office, stop working, relinquish all cars and public equipment, sever health insurance, etc.

An FOI request we submitted indicates Hopkins is reviewing the rehiring of Frank Anthony as Pine Bluff school superintendent after a month off. Here's one of Hopkins' letters to Pine Bluff seeking relevant records about Anthony's separation. Since I first wrote this, he's replaced that request with a questionnaire to the district about Anthony.

Hopkins, who is checking the retirement of at least one other school district employee elsewhere in Arkansas, wrote  this about proper terminations in an e-mail we obtained under the FOI:

Generally after July 1st, all ATRS members who are not 65 will have a separation period. For those with 38 or more years of qualified service, the separation period is 30 days. For all others, the separation period is 180 days.

 

The termination- separation must be real and complete. There can be no deals or contracts in the period. The person must vacate the position without rights or duties. Even if a contract is entered for a time after the separation period, if it is entered before or during the period, it prevents required separation.

 

Required separation will fail if salary is earned during the period or a contract is entered. If uncertainty exists, generally a "totality of the circumstances" review will be used if any question on proper separation occurs.

Hopkins said he was preparing to send similar inqiries to other school districts. "We are going to enforce this," he told me. "It must be a real deal separation."

 

He hopes all state agencies will cooperate in his effort to be sure retirement rules are followed.

 

"We’re going to follow the rules here and we’re going to follow them uniformly. That’s what required."

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