The Elder Law Forum

The Elder Law Forum by Professor Michael Myers Editor's Note: The Elder Law Forum is a public service of The University of South Dakota School of Law, an extension of the SENIOR LEGAL HOTLINE available at no cost to persons 60 and older at 605-677-6343 and mmyers@usd.edu during regular business hours. The Elder Law Forum delivers information and educational material by radio, a weekly newspaper column, and Law School research papers placed on the USD School of Law Web site. Professor Myers teaches Elder Law at the School of Law.

A caution to

"Re-Employed" Retirees

"I would like to report a case of age discrimination," said a USD Senior Legal Hotline caller (1-800-747-1895; mmy ers@usd.edu). He identified himself as a teacher who had worked 29 years for a school district, then "retired" for the purpose of tapping his pension under the "Rule of 85," with the understanding he would be immediately "re-employed."

The school district complied with the agreement, rehiring him the following day. He didn't skip a beat, teaching the same courses, retaining the same office, attending the same faculty meetings. Nothing changed, except that the state started making monthly pension payments directly into his checking account.

Life was good. After all, this is a common practice. Teachers and university professors often "walk out the front door," resignation letter in one hand, then "re-enter through the back door," a reemployment agreement in the other.

Historically, these arrangements have been mutually beneficial. The teacher starts receiving payments from a fund earned during an extended period of committed service. No skin off the school district's nose! And, it is able to retain an experienced and known teacher in a market that has been long characterized by shortages.

But this is 2003. School districts are in financial jeopardy. The state is dipping into its reserves, and student numbers are down. Schools are confronting further consolidation. Rural school districts that just a few years ago went begging for teachers are now laying off teachers through "reduction in force" policies that are often dust-covered and vague.

My caller said he had been unjustly "Riffed." The school district advised that when he was "reemployed" his status became that of a new hire. He no longer had tenure. Teachers with just a few years of service stood ahead of him for purposes of seniority.

In his case, the school board may have made some legal mistakes that give him a shot at having the decision overturned.

But his case should serve as a caution to those who seek to enjoy the fruits of their pension while continuing to labor in the same employment vineyard. Make certain you understand the terms of re-entry before resigning and reaching into the pension barrel.

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