IRS Rules Could Prevent Proposal of Employment to Retired OK Teachers
Carter, Ray, THE JOURNAL RECORD
A proposal to allow experienced teachers to return to Oklahoma classrooms without losing retirement benefits or harming the state teachers' retirement fund may run afoul of the Internal Revenue Service, legislators were warned Wednesday.
Rep. Tad Jones, R-Claremore, told members of the House Retirement Laws Committee that he believes the state could provide financial incentives to lure experienced teachers back to the classroom after retirement.
Officials said surrounding states often hire Oklahoma's most experienced teachers to work in their school systems and additional financial incentives are needed to keep them here.
A retired teacher that comes in from Texas, we can pay them as much as we want to, said Traci Ballard, director of legislative services for the Oklahoma State School Board Association. A retired teacher from Oklahoma going to Texas can make as much as they want to.
But when the same retired Oklahoma teacher attempts to return to the classroom in Oklahoma, we're penalizing them, she said.
Jones said a 30-year teacher in Oklahoma is paid $36,000 per year (a maximum salary level reached at year 25), compared to a starting teacher salary of $27,000.
Under his proposal, a retired teacher could return to an Oklahoma classroom and still receive his or her retirement income and annual pay equivalent to the salary of a first-year teacher.
Under Jones' proposal, a 30-year teacher that retires and returns to work in Oklahoma schools could receive up to $21,000 in retirement benefits plus a regular starting teacher salary of $27,000, which would provide a $12,000 annual increase in pay for that experienced teacher compared to the top amount ($36,000) allowed in straight salary prior to retirement.
We're trying to encourage teachers to stay in the system, Jones said.
Jones said his proposal offers teachers a trade-off - higher income levels but lower monthly retirement benefits in the long run.
If they stay teaching under the current system for another 10 years, their retirement could go up significantly for what they could get for the rest of their lives, but if they choose this scenario, they get more up front and less on the back end, Jones said.
He said the proposal would also generate savings for schools because of the lower salary involved while still retaining experienced teachers.
There's $9,000 the school would save right there, Jones said. …