Friends with Benefits: School Pension Payout

Our last Friends with Benefits post was seven months ago, but the Mercury News Internal Affairs section (and blog) ran a provocative piece yesterday on school supe pensions that is noteworthy.  Hillsborough made the news because

More than 400 retired educators in the Bay Area received annual pension payouts of $100,000 or more in 2014, according to the budget watchdog group Transparent California.

Three South Bay and Peninsula ex-superintendents received the highest payout among Bay Area educators.  James Smith, former chief of  the Evergreen Elementary District in San Jose, received $287,434; Marilyn Miller, formerly of the four-school Hillsborough district, received $280,035; and Johanna Vandermolen, retired from the Campbell Union Elementary District, received $278,003.

Interestingly, all three of the former elementary school chiefs received more than retired heads of the area’s big school districts, although in some cases only slightly. Last year, in retirement from San Jose Unified, Don Iglesias took in $239,492. He led a district more than 20 times the size of Hillsborough.

The fiscal ramifications were laid out at the end of the piece

Educators are fond of pointing out that CalSTRS is partly funded by salary deductions. But with the pension system’s future obligations outstripping revenues, the state is demanding higher contributions. Teachers will pay somewhat more, but districts’ share will balloon from under 9 percent of teacher and administrator salaries to 19.1 percent in six years. What will take the hit from that? Likely school programs and staffing.

I don't follow the H'borough school system enough to know when Ms. Miller retired, but you do need to keep in mind that it's possible the overall payout included the one-time costs of unused personal time, etc. if she just retired.  If the report of the districts' shares more than doubling over the next six years is accurate, that is a balloon payment no one will want to make.

 

Comments

[Superintendent salaries...sketchy]

Yes, Superintendent salaries and pension salaries are totally ridiculous and should draw attention from even the most tweaked Oakland Occupy sketch.

[Robert]

Ms. Miller retired in 2009 and has been receiving a yearly $200k+ pension ever since.

[Bruce Dickinson]

Guys, you gotta give Joe his due credit. An interesting article about egregious superintendent pensions actually raises some interesting points about organizational hiring, incentives and agency issues. And Joe puts the ball on the tee, for Dr. Dickinson to hit it out of the park, with his insights. Let me elaborate. A pension is based on salary (is usually around 70%-80% of salary, includes healthcare) and years of service. The superintendent of HSD only ran 4 schools, but was paid a lot for it, hence the huge pension. The size of the district is tiny, but the Board (made up of members of the community), no doubt want to pay up for their “CEO” and I’m sure her credentials had her walking on water. Did Ms. Miller do such a dynamite job that should be paid by outcomes, namely very strong education of Hillsborough kids, where many kids go on to become highly successful and mini-Dickinsons if you will? Or is it the case that you plop anyone halfway competent in that seat and the outcomes would have been the same, or maybe worse? You would have to ask the HSD parents to see what they thought.

Does a CEO of a large company, say worth 150 billion dollars with no growth, poor outcomes, and a flagging stock price deserve a higher comp package than a much smaller company in the same industry that has grown from zero to 30 billion dollars? Or the smaller company who may be more profitable? I would say you reward the smaller company CEO more. But this doesn’t always happen in corporations, let alone school districts and it is unclear to me whether a wealthy community pays up for talent, which results in better outcomes compared to a less wealthy community that pays up for the size of the school district, with little weight to outcomes. What if Ms. Miller had gone to one of the worst school districts, turned it around, changed hundreds of lives of disadvantaged kids, but would she have gotten paid fairly for it? Folks, I gotta tell ya, there is a lot to contemplate for an article that on the surface seems easy to bash $280,000 dollars for a pension, which yes does seem like a lot for retirement, but is a function of what that person was paid during her day job for probably quite a while.

[hillsider]

Sweet. 4 Schools. 4 Principals. $50K a pop. I guess the other hillsiders are OK with that.

[Jennifer]

Good points.....BD.

Marilyn Miller was with the Hillsborough District for many years and truth be told, she did an incredible job. Good enough, wasn't. Teachers who were not up to par didn't last beyond their probation period, and she was always upping the expectations and keeping staff on their toes. She was very respected by all, but she did not kowtow to parents, as one might expect in such a district where community donations are so important (they are a basic aid district). Because it was only 4 schools, she was very hands on and active. I'm not sure what happened after she left, but it would be hard to imagine a better superintendent, anywhere.

[Been here forever]

I beg to differ Jennifer. Marilyn Miller was a bully and the only way a teacher stayed around under her was to kiss her ass. The best or mediocre didn't matter, as long as her ass was kissed and you acted as her puppet. Disagree? Finished, in the blink of an eye. Ask any teacher who will speak the truth and you will hear. She is rotten to the core. Karma is a bitch though. It has come back to bite her. Big time.

[Jennifer]

I guess we'll just have to agree to disagree. My perspective is as a parent, not as a teacher or other staff member. One thing we could probably agree on, however, is that she did not sit in her ivory tower pushing paper, waiting around until she could collect her pension--no?

I'm not sure what you mean about bad karma biting her-- I wouldn't wish bad health or the like on anyone.

[Bruce Dickinson]

Guys (or gals), I gotta tell ya, Bruce Dickinson has seen this problem over and over again, and even at Columbia, I oftentimes had to remind the execs, the same thing as in this case, which is the key question: who is the "customer"? The students and their parents. What determines a good customer experience? Outcomes, or namely education and placement into colleges. If the superintendent ruffled a few teachers' feathers but the parents were 100% behind her and the superintendent acted in the interests of the customer, then it was probably necessary. One person's "ass kissing" definition may be another's "I need to have the same shared vision as the CEO in order to succeed here" If that vision improved student outcomes, and the board and parents of an extremely high parent involvement school district were doing their job, that is watching the CEO as the "shareholders", then the superintendent was most likely a good one. And they probably got what they paid for.

I have friends, yes, dozens of friends whose kids are a product of the Hillsborough School District, and I find it almost implausible to believe that parents are asleep at the switch and not supervising the instruction and strategic direction of their kids' school district. For a bad superintendent to serve many years, with all type-A moms and dads (and nannies) involved in the activities and donation of monies to the school district, and who have the easy option of going to private school (to which they will always draw comparisons), seems to be unlikely. But what do I know, I'm just a retired caveman record producer (who happens to spell Success with a capital "S")!

[Been here forever]

I didn't say she was a bad superintendent. I described her less than desirable personality characteristics, which she used at will to run the district and demean or trounce all those who got in her way, good and not so good. She was especially spiteful to those who were friendly with the board. She did her best to keep them at bay and under her thumb (or claws). But doesn't every bigwig use their powers to keep things going in the direction they want them to go. Whether you like it or not, she was not well liked by staff at any time. Never. And that is part of running a business, is it not?

[Super-sized pension payoffs]

I always found it ironic that the public school would run their "anti bullying" campaign, and then they themselves would be run by bullies.

That was true at Lincoln with Principal "The Drill Sergeant" Garber.

Unfortunately, for most people, the Gov't has a monopoly on schools. And, you know how monopolies usually work out for consumers...

I've observed across the many schools that I've worked with, that the new generation of Supers, Principals and Teachers realize that the parents and the students ARE their customers and that public opinion does impact their pocketbooks, from bond measures being supported to BCE type fundraising to maintaining a satisfied public for the primary political party in CA, which is closely tied to the teachers and their little org HQ'd in North Burlingame.

Why do gov't jobs have to be such a pension play for the employees, instead of paying new teachers better to attract even better candidates?

I'd recommend that Bay Area teachers pension investment funds invest more in apartments that could serve as affordable housing for teachers, and also in the surrounding land and building around existing schools, which could be leased out to commercial tenants as a part of the pension investments, and then sold to the districts when they need to expand.

Regardless, public employee pensions need to be modernized. Many public pension pay-offs are way overboard in fairness and reward to people like Supers.

[Bruce Dickinson]

Listen, guys, super-size me is right. Bruce Dickinson believes that the teacher's union has sold the idea of low current income in favor of deferred high retirement income. I know this isn't the case for superintendents, as they are staff, but deferred obligations always rear their ugly heads later on, as the population ages, lives longer, and healthcare costs escalate (also post retirement obligations with many retirees). Why not emulate the private sector, to wit, pay the teachers and staff good market rates, especially the teachers who taught our children and worked long hours with little pay, and have voluntary 401k programs. That is what is going to allow teachers to live in houses in our neighborhoods and attract them into long term careers.

I would be remiss if I didn't say that many young teachers (still female dominated) enter the elementary school, get hitched, have kids and either stay as homemakers or change their careers. We want to attract top talent and experience, folks. The US of A has a world class university system, but a public k-12 that lags most peers. One has to ask why is this, and Bruce Dickinson believes it's all about incentives. Remember, in addition to myself, all the success stories I've known, and I know a lot, have been driven by proper alignment of incentives, as it were.

[Joe]

Scott Herhold of the Mercury News got in touch with CalSTRS for the calculation on one of the other top 3 payouts:

The short answer is that VanderMolen retired from a well-paid job and had a career marked by longevity. The CalSTRS system rewards both.

Bear with me on the math. Her final annual salary at Campbell Union was a very healthy $270,204. For every year of service -- technically, it was 39.845 years -- VanderMolen received 2.4 percent of her final salary, a number known as the multiplier.

If you multiply all that (270.2K x 39.845 x .024), you get about $258,386, which was her base pension. VanderMolen elected to take a survivors benefit for her husband, which reduced her payout by slightly more than 3 percent.

Because of her longevity, however, she was eligible to receive an additional payment of nearly $400 per month. A CalSTRS spokesman says she has received several cost-of-living bumps, which have added $1,700 to her monthly total.

When all that is boiled down, CalSTRS says, VanderMolen is entitled to $275,943 yearly. You'll notice this is a little less than the Transparent California number. CalSTRS spokesman Michael Sicilia had no immediate explanation for the difference -- though he does not dispute the higher figure.

The rest is here:

http://www.mercurynews.com/scott-herhold/ci_28061244/how-does-an-educator-get-that-lofty-pension

[Joe]

$275,000 seems to be the number these days for school supes:

http://www.smdailyjournal.com/articles/lnews/2015-05-09/high-school-district-offers-new-supe-275k-san-mateo-union-high-school-district-board-can-approve-contract-at-its-next-meeting/1776425143065.html

[Account Deleted]

Just noticed this on the agenda for the next BSD board of trustees meeting ($600K being moved from general fund to a special reserve to cover additional anticipated pension contribution requirements):

17.4. Resolution 2016/17-29 to Commit Funds to Fund 17 for Future STRS and PERS Encumbrances (v) - 7:52 p.m. (Action Item)

Recommended Motion:
It is requested that the Board of Trustees approve Resolution 2016/17-29 to Commit Funds to Fund 17 for Future STRS and PERS Encumbrances.

Rationale:

Starting in 2013/14 State Teacher Retirement System (STRS) and Public Employee Retirement System (PERS) rates started to increase dramatically. From 2013/14 to 2016/17 rates have increased 4% and 2.45% for STRS and PERS respectively. By 2019/20 STRS will have increased 9.88% and PERS will have increased 10.16% over a 6 year period with more increases to come.

Knowing that these increases in required retirement payments will continue for many years, Resolution 2016/17-29 seeks to set aside funds in anticipation of future increased STRS and PERS payments.

These funds will be committed in Fund 17 specifically for STRS and PERS payments in the future and must be spent only on those payments unless redirected through Board resolution.


Financial Impact:
$600,000 in 2016/17 from the General Fund, Fund 01 to Special Reserve for Other Than Capital Outlay, Fund 17

[Golden Ager Ex]

I taught in Hillsborough before Marilyn Miller became Superintendent, but I knew her as principal of Crocker Middle School. I once witnessed her lie to her own son who was a student of mine. Many times she misled the faculty and on a few occasions, the local school board. I once heard Ms. Miller tell our librarian to falsely accuse a problem student of stealing library books because he sometimes disrupted classes there. Ms. Miller was an accomplished manipulator.

As principal her favorite way to promote an agenda was to assure the faculty that her plan had school board approval. She lied. The first time she employed that ruse, I smelled a rat. I called each council member, and not one knew anything of her proposal. In fact, I was told curriculum matters were exclusively a faculty matter. So, I reported my discovery at the next faculty meeting. My ten-year tenure at Crocker was doomed from that moment on.

Thereafter, Ms. Miller scheduled faculty meetings to coincide with my duty as in-school suspension supervisor. I was rarely available for faculty meetings.

Every other teacher (per district contract) had scheduled observations. All mine were surprise, unannounced visits. In each subsequent evaluation, she accused me of some form of inappropriate response to students and listed necessary improvements I needed to make. Never mind that I was the author of the award winning spelling-vocab curriculum used by the entire school. Forget that I was responsible for revamping Crocker's parent-teacher conferencing procedure, and its new lunchtime detention policy. All were acknowledged successes. All that really mattered to Ms. Miller was I had become the enemy. My complaints to the superintendent about harassment fell on deaf ears. He had personally selected Ms. Miller for the Crocker principal position, ignoring faculty opposition. The fix had been in place from the start.

Someone reading these examples might conclude I was just another a disgruntled employee with an ax to grind. Worse than Ms. Miller's manipulations
vis-à-vis me were unscrupulous practices that if exposed could have landed her in big trouble. The worst concerned prepping the entire school for questions known to be included in the California Test of Basics Skills. CTBS questions were supposed to remain secret. After the test, she personally altered test answers of the school's worst students to boost Crocker's test average. I made the mistake of whistle blowing to the superintendent. Surprise, he sided with Principal Miller.

I quit after that school year and moved to another state. In my four decades in public school education, I worked for seven principals. Fred Schwartz and Carl Zon (both Crocker principals before Ms. Miller) were the best. Marilyn Miller was clearly the worst. In fact, in all my seventy years, I've never known a more detestable human being. Marilyn, if you are still alive and reading this, please sue me for defamation. Truth will be my ultimate defense. Your 200 grand a year pension regretfully rewards a Peter Principle ascension and self-promoting scheming. At least my 18 grand a year was honestly earned. Forfeiting a big chunk of your retirement would certainly be the karmic justice you deserve.