Rhode Island news
Costantino questions return of retirees
01:00 AM EST on Friday, December 19, 2008
PROVIDENCE — “They were given an incentive to leave, and then they came back … that’s not right.”
That was the reaction yesterday of House Finance Chairman Steven M. Costantino to the disclosure that 44 recent retirees from the state college system, including a handful of top-level administrators, were back on the state payroll as consultants and part-time employees after receiving thousands of dollars in retirement incentives and severance payments for things like unused sick time.
One top-level administrator at Rhode Island College who left with $88,223 in severance and incentive payments is now back at the school as a $20,019 consultant with unspecified duties. Another, who left his post as the dean of administration at CCRI with a $97,603 parting payment, was given a $7,988 teaching gig. Other job descriptions for the back-to-work retirees simply say: “replacing self.”
The Providence Democrat said he is “extremely troubled” that the administrators of the state college system would view themselves as exempt from the state law that prohibits — with only a few exceptions — the rehiring of all other state retirees. Even if they are legally correct, he said, their reading of the law has revealed a loophole that needs to be closed when the legislature returns next month because it opens the state to the same kinds of abuses that led lawmakers to curb the practice in the early 1990s.
In that era, state employees who had retired on a Friday returned to their desks the following Monday with a pension and a paycheck, among them: the director of the state retirement office. The practice was not only viewed as a political outrage, it earned the state a rebuke from the IRS and left it liable for thousands of dollars in unpaid federal income and Social Security taxes for the so-called “consultants” doing the jobs of state employees.
State college officials had no immediate response to Costantino’s remarks, which came on the same day a rueful Robert Kando, director of the state Board of Elections, acknowledged what he called the inadvertent hiring of state pensioners for $100-a-day jobs delivering mail ballots to nursing homes and showing the residents how to use them.
Some worked three days, others twice that in the lead-up to the primary and general elections, while Bernice Sminkey, a retired school teacher with a $45,221-a-year pension, worked 12 days, Kando said.
Kando did not seek permission in advance, as required, for any of his 43 emergency hires. But that was the least of his problems.
When he submitted the list for payment after the fact, state personnel director Anthony Bucci decided “out of an abundance of caution,” after the huge wave of retirements last summer and fall, to ask the state’s personnel office to spot-check the list for any state pensioners. The check uncovered seven recipients of state pension checks, ineligible for the jobs.
None have been paid.
In a letter to Bucci and state budget officer Rosemary Gallogly that he made public yesterday, Kando said the Board of Elections got caught short by its effort to comply with “Governor Carcieri’s order to reduce personnel costs to the absolute minimum … In our zeal to keep costs to a minimum, the BOE found itself understaffed as the dates for the primary and general election approached, which necessitated hiring temporary workers with very little notice, especially in light of what turned out to be an election where record numbers of voters were turning out nationwide.”
He said the last-minute hiring of more temporary workers “rescued the BOE.”
“I am sure the legislature did not intend to deprive payment of a few days’ wages to individuals who respond at the last moment to assist a state agency. I would respectfully submit that denying compensation would be contrary to both the spirit of the statute and the interest of the State of Rhode Island.”
At this point, Bucci said, he has approved payment of the amounts owed to 36 of the 43 temporary election-staffers. He said he will give the seven retirees, ineligible for the jobs, a choice: “volunteer” the time or get paid for their time and have the amount deducted dollar-for-dollar from their pension checks.
“I didn’t mean to break the law,” Kando said. “I didn’t know they were retirees.”
It was less clear who decided to rehire the college retirees. In an interview yesterday, Costantino asked: “Who has the authority to approve it?” The spokesman for the state Office of Higher Education, Steven Maurano, did not respond to repeated inquiries about who approved the rehiring of the RIC, CCRI and University of Rhode Island retirees, whether their post-retirement jobs were posted and whether the schools have been deducting federal income and Social Security taxes.
He also had no direct answer when asked why the colleges believe their employees should be exempt from the state law that restricts the hiring of state pensioners for temporary nursing jobs paying up to $12,000 a year, and teaching, coaching and student advising jobs that pay up to $15,000.
But he asserted again that the college retirees “are not members of the state retirement system and therefore are not subject to any restrictions imposed by the laws governing that system.” Most were enrolled instead in TIAA-CREF, a state-subsidized, but privately operated 401(k)-like plan to which the state contributes 9 percent of pay for each enrollee.
“You seem to be more focused on the question of legality in bringing back retired employees than on the savings aspect of the issue,” Maurano said. Even after deducting the millions in severance payments and the $377,000 paid this past semester to the select retirees who were rehired, he said the colleges could still save $11.4 million annually by leaving all of their current vacancies unfilled.
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