Barring a last-minute change of heart from the state teacher’s pension system, Tuolumne County Superintendent of Schools Joe Silva will not proceed with a plan to “retire” and work at a much lower salary while collecting his full pension.
Silva, 62, intended to retire as superintendent on Nov. 29 and be reappointed in December at a beginning teacher’s pay while receiving his pension from the state.
The plan was first up for approval by the Tuolumne County Board of Education at a meeting Nov. 5. But it ran into opposition from the California State Teachers’ Retirement System, which said it would lead to a reduction in Silva’s pension benefits.
Last week, Silva decided not to proceed with the plan and risk incurring legal costs to defend his pension. His office cancelled a Monday meeting of the Board of Education that would have considered his retirement and reappointment.
Silva initially said the change would have saved the office money and helped prevent layoffs, since the Tuolumne County Office of Education would pay his lower salary and not his state pension.
But a Nov. 2 CalSTRS letter suggested Silva could not legally retire and continue to work full-time as county superintendent without reducing his pension.
Though the exact amount of his lower salary had yet to be determined, Silva named a likely figure of about $40,000 a year. He would also collect his pension — an estimated 90 percent of his superintendent pay, a fact he didn’t attempt to hide in discussing the plan.
Silva won’t know the exact dollar amount of his pension until he actually retires, according to Danna Fritz, human resources director at the Tuolumne County Office of Education.
His annual salary is almost $170,000, not including a $7,200 business allowance or health benefits. The pension combined with his reduced salary would put his annual earnings at somewhere around $190,000.
Since the proposal would lower Silva’s salary costs to the office, his staff and the Board of Education spoke in favor of the proposal. As an elected official who first took office in 2003, Silva intended to work through the end of his term in 2014.
“What Joe was trying to do was ensure for the rest of his term that we would have some (financial) breathing room,” Fritz said.
Silva would have needed to “retire” and be reappointed by the end of this year to avoid a rule that would require him to take 180 days off as a new retiree, according to Fritz.
Byron Smith, the Sonora-based attorney who represents the Tuolumne County Office of Education and several local school districts, said he has not been able to reach CalSTRS attorneys to argue Silva’s case.
Silva could therefore have his retirement benefits slashed by CalSTRS if he proceeded with the plan, according to Smith.
“(Our) office would have to spend resources to say, ‘No, you’re wrong,’” Fritz said.
She noted that the resulting legal bills to the Tuolumne County Office of Education could quickly reach $75,000 or more, outweighing any financial benefits from Silva’s reduced salary.
Smith said the county office could elect not to pay any legal bills associated with defending Silva’s pension. But he and Silva decided that without last-minute approval from CalSTRS in the form of a letter, Silva would not seek retirement and reappointment.
Silva was at a conference out of state and unavailable Monday.
Smith still maintains that Silva’s plan to work at a lower salary wouldn’t violate California education code.
“I contacted attorneys in the state that specialize in this area, working with (Cal) STRS,” Smith said. “Each of them agree with my interpretation of the Ed Code section.”
According to Smith, CalSTRS first threatened legal action if the Tuolumne County Board of Education approved Silva’s proposal. They later “seemed to back away” from the threat of litigation, Smith said.
By CalSTRS’ reckoning, Silva was caught between two policies — one that requires him to be paid what he’s earning now even if he was reappointed after retirement, and another that would reduce his retirement benefits if he does keep his current salary after retiring.
Education code “requires a post-retirement position to be paid at a similar pay rate as the active position,” according to the Nov. 2 letter from a pension program manager at CalSTRS.
The letter also stated Silva would be subject to an “earnings limitation” established earlier this year for public education employees who retire and return to work. Under the rule, Silva could earn no more than $40,011 without also reducing his pension on a dollar-for-dollar basis.
Taken together, the pair of rules nixes the notion that Silva can continue work full-time while receiving his full pension.
Ricardo Duran, a spokesman for CalSTRS, wrote in an email that the education code in question is “intended to prevent (school) districts from filling vacancies by merely rehiring retired teachers in order to avoid paying salaries and benefits.”
“If (Silva) wants to receive only one-quarter of his pay, he would need to work one-quarter the time,” Duran said.
Silva works 225 days a year, and his office has said he can’t do his job in any less.
Smith argues that the education code doesn’t apply to county school superintendents, who have no immediate peers within their counties and no “minimum” rate of pay.
He said he is still holding out hope that CalSTRS attorneys will agree with him.