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Oglesby: On pension plans, DOT vote

POSTED: February 21, 2008 5:01 a.m.
Several readers have asked me why I haven't commented on the controversy over county administrator Jim Shuler's compensation arrangement. The simple reason is I don't have sufficient information on the specifics or time to get that information. I do have some basic principles that would apply to my analysis of the information. For however it helps, I'll share that.

School systems are recruiting retired educators to fill vacancies. They're drawing their retirement checks plus getting paid for their work. Retirees are more experienced and possibly more effective than recent graduates. Many seek supplemental income and even second careers. In general principle, I think drawing on such talent makes good business sense if done correctly.

Theoretically, retirement income is from a source independent from the governmental operations, the pension plan. That expense is not government's operating expense. In other words, Shuler's continuing in the job could make excellent sense in that he has more experience in that post than any other candidate they could recruit and, so far as I have observed, has done a commendable job.

Here's a sticker. As I understand it, he's officially retired but staying in the position, drawing a salary and benefits that include contributions to a second retirement. I can't say that's necessarily wrong, but I believe there's a more publicly palatable way.

Pensions of retired educators who work in education within the same retirement system generally are recomputed to add credits for extra years worked up to the maximum for which credit can be given, thus increasing their pensions, not starting a new one. If after first retirement, one wants to work for a new pension, I think it ought to be in a separate system. I know a number of people who draw separate pensions in this way.

I've written before of concerns about the fiscal health of public retirement systems, including local governments'. Should they run out of money, taxpayers will make up the difference. When economic times are good, temptation is great to increase benefits, at least by the increased cost of living. Pension fund contributions were based on salaries of the time. Benefits credited to those periods were calculated on the conservatively expected growth of those contributions, not on the higher salaries and contributions paid in future years.

We have longer life expectancies. There'll be times of economic slowdowns and plan earnings won't be as much as expected, though benefits continue. Other times, plan earnings will be higher, perhaps replenishing, even increasing, the plans' investment pools.

Critics of this arrangement are rightly concerned in that allowing anyone to start a second pension plan in the same job could affect the plan's fiscal health and expose taxpayers to a significant risk. A plan where the county recomputes the pension to reflect continued years and then allowing the worker to defer receipts of some current salary until later as private business often does would be far more palatable.

This is not a reflection at all on Shuler's continuing in the job where for all I know he's doing a good job. These thoughts are based only upon what little I know about the specifics.

Commissioner Bobby Banks shouldn't be scorned but should be commended for bringing the issue to public attention. It would be fitting if Shuler and the remaining commissioners cooperatively take a second, long-term look and see if improvements to the arrangement would make it more publicly palatable. I, for one, appreciate it coming up and when I learn and analyze more facts will write more definitively.

Changing course, all involved in last week's state highway board election agree it was a messy affair, one where the real contest wasn't between the candidates but primarily between the governor and House speaker and secondarily between the lieutenant governor and speaker.

The candidates, incumbent chairman Mike Evans and former Hall County state Rep. Stacey Reece, are friends and had the misfortune of being proxies in the higher level political fight. They understood that and as Reece said, it's not personal, it's political.

It's no secret both the speaker and lieutenant governor want to succeed the governor. Lt. Gov. and Hall Countian Casey Cagle supported the governor, and by extension, Evans. Hall County's possible benefit was that if Evans prevailed, they would have a board chairman who all agree has helped the county's needed road projects and could be expected to continue.

If Reece prevailed, they'd have a Hall Countian in the post rather than someone in another part of the district without the growth needs of our county.

Ted Oglesby is retired opinion page editor. Reach him at P.O. Box 663, Gainesville, GA 30506. His column appears biweekly and on gainesvilletimes.com. Originally published Feb. 5, 2008.




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