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Caputo Introduces Bill to Prevent Double-Dipping among Retired School Administrators who Return to Public Work

Investigative news report in February found many retired educators working as interim superintendents are collecting pensions & costing the state millions annually

(TRENTON) – Assemblyman Ralph Caputo (D-Essex) has introduced a bill that would eliminate exceptions that currently allow retired school superintendents and administrators who return to public employment to continue to collect their retirement benefits in addition to their salaries.

“There are retirees who are earning generous salaries while collecting pensions, and the worst part is that they are not breaking any laws because the current system allows this to happen,” said Caputo. “The state is in no position to just be giving away money. This bill would prohibit these individuals who have retired and are receiving retirement benefits from continuing to receive these benefits if they begin working in positions that would allow them to reenter the retirement system.”

The bill (A-3523) eliminates two existing exceptions to the reenrollment requirement for certain retirees of the Teachers’ Pension and Annuity Fund (TPAF) who become reemployed in positions that would make them eligible to once again be members of the retirement system.

Generally, under current law, if a TPAF retiree, receiving a retirement allowance for any cause other than disability becomes employed in a position which makes the retiree eligible for TPAF membership, the retiree is required to reenroll in the retirement system and the payment of the retirement allowance ceases. Exceptions are made however for a retiree (1) who is a certificated superintendent or administrator who becomes employed by the state Department of Education in a position of critical need as determined by the state Commissioner of Education, or (2) who becomes employed by a board of education as a certificated superintendent or administrator on a contractual basis for not more than one year. Currently, such a contract may be renewed for one additional year, provided that the total period of employment with any individual board of education does not exceed a two-year period. The bill eliminates these two exceptions.

Caputo said the bill would help prevent situations like the ones revealed in an investigation by the New Jersey Watchdog and NBC 4 New York earlier this year. According to the investigation, interim school superintendents, many of whom are retired educators collecting pensions, are costing the state millions annually. The report found that 45 retirees have worked as interim superintendents during the current school year in New Jersey. The retirees collectively received more than $4 million annually from the Teachers’ Pension and Annuity Fund, according to the investigative report.

“As the New Jersey Watchdog and NBC 4 New York investigation revealed, these individuals are taking advantage and profiting from an opportunity that the state created,” said Caputo. “The state is no financial shape to allow this to continue. Sorry folks but you can’t have your cake and eat it too.”

Caputo also said the salary cap instituted by Gov. Christie for school superintendents also contributes to the problem, since it is more advantageous for administrators to retire and return to work as interims than to remain in the position on a permanent basis. According to the news report, superintendents in larger districts can earn a top salary of $177,500, while those in smaller districts can earn $120,000. “As retirees, these interim superintendents do not contribute to the state’s pension system, which is facing a $42 billion shortfall, but continue to benefit from it. Some of these folks are earning twice as much as the salary cap for superintendents in the state’s smallest districts. They are earning more as retirees than they would if they were not retired. That makes no sense,” said Caputo.