Cape superintendent to retire briefly to cash out retirement benefits, then return

After nearly three years at the helm of Cape Girardeau's public school system, superintendent Jim Welker is planning to retire.

But Welker wouldn't be out of the job long, under a proposal that would allow him to pull out a partial lump sum payment from his state retirement account and then return to his post with a new contract.

The plan, endorsed by the Cape Girardeau School Board on Monday following a closed-door meeting, would allow Welker to tap into part of his retirement to meet his debts, while ultimately retaining him to lead the school district for the next three years.

Similar proposals outlined in a St. Louis Post-Dispatch article in October have been roundly criticized by opponents who see such arrangements as an end-around to a provision that was never designed as an alternative to retirement. But Welker said he isn't "double-dipping," that the plan in no way would cost taxpayers or the Public School and Education Employee Retirement Systems of Missouri any more money.

Welker asked the board to release him from the remaining year of his contract at the end of June. Before then, he plans to file for his retirement benefit that he has accrued over his 33 years in Missouri public education.

He would receive his pension for the month of July, and would be able to withdraw a partial lump sum option. Under pension law, he could have no contact with the district until Aug. 1, when he says he will pursue a new contract with the board.

"Basically, it would be my desire to enter into a three-year contract, identical to the contract I entered into three years ago -- at the same amount," Welker said. The superintendent currently earns $135,000 a year, not including benefits, which are similar to those of his employees. He has refused pay increases over the past two years, saying "there's no way he would feel comfortable taking a raise" when staff salaries have been frozen during trying economic times.

Assistant superintendent Pat Fanger, who in December informed the board of her plans to retire after this school year, would serve as interim superintendent for July under her current salary schedule.

If the board offers Welker a new contract in August, he would notify the retirement system that he is "coming out of retirement," and at that time his retirement benefit would stop. He will, however, be able to keep the partial lump sum payment.

"That will help me pay off some of my college debts from when I got my doctoral degree" in 2006, he said.

The superintendent sought advice from officials at the retirement system in a letter dated Oct. 11, one day after the Post-Dispatch story published. In the letter, Welker notes his plan to retire beginning in July, and to request his partial lump sum option, in accordance with retirement system regulations.

"I will not volunteer to return to work for a PSRS-covered employer, or be under contract for employment with any PSRS-covered employer in any capacity until at least one month has lapsed since the effective retirement date," Welker wrote to Dearld Snider, assistant executive director of the Public School Retirement System.

Snider responded to Welker in a letter dated Oct. 23, noting the plan meets state statutes.

Welker said he worries about the perception some in the community may have.

"I think some people may think it's going to be double-dipping," he said. "I will not receive the retirement benefit and salary at the same time."

The move, Welker said, is also motivated by the structure of Missouri's public education retirement system, a system many argue is inherently flawed, costing districts experienced administrators at the peak of their career.

"In the coming year, because of the way the retirement system is set up, I would earn nearly as much, if not more, retired as I would working," the superintendent said. After 33 years in education, Welker's annual pension benefit is approaching his salary.

Under the Public School Retirement System formula, covering Missouri's certified educators, beneficiaries receive 2.5 percent per year of service, paid on the highest three-year salary average over their career. Someone who works 30 years in public schools would receive 75 percent of their highest three-year salary average per year in retirement. This year, Welker would receive pension income amounting to 82.5 percent of his salary.

The Post-Dispatch piece detailed the dilemma of Missouri's educator pension.

"It's a situation that has saddled school districts with a dilemma: watch experienced superintendents walk out the door, or engage in an expensive effort to outbid lucrative pension benefits," the newspaper article states. The newspaper noted that in the last two years, in at least two cases, school districts have constructed expensive and controversial perks to keep retirement-eligible superintendents on the job.

Welker said the arrangement he is proposing is nothing like those deals. He said it would be more personally profitable to retire and work somewhere else, perhaps in public education where his experience would be in demand. Under Missouri's pension laws, Welker's current retirement benefit -- with the exception of the partial lump sum option -- would be frozen when he returned to work, but he would begin as a new retirement system member. Should he retire after the three years, he would earn 7.5 percent of his salary upon retirement, as well as the amount in his previous retirement account.

But if Welker decided to take a similar position outside Missouri, he would be able to earn his retirement benefit as well as the new salary. He said he does not intend to do that.

"My goal is to continue in my role as superintendent of Cape public schools," he said. "This is my home, and this is the job I wanted, and I'd like to stay."

Steve Yoakum, executive director of the state retirement system, said while Welker's plan is unusual in that it precisely complies with state statute that the administrator retire for at least 30 days, it does seem to follow the intent of the law.

"The key here is you have to actually retire, you can't have a preexisting contract in place, and there can be no contact with the district," Yoakum said.

He said there is a valid concern that Welker's plan may be perceived as a preexisting deal. In this case, Yoakum said, the president of the school board would have to affirm that all of the requirements were followed, should the board rehire Welker.

Welker's plan may cause some anxiety from residents of the school district, who watched four superintendents come through in 11 years before Welker was hired in February 2008.

"It has been kind of a revolving door for superintendents," said Tony Smee, vice president of the Cape Girardeau School Board and one of five board members who voted to let Welker out of his contract, effective June 30. Board member Paul Nenninger abstained from the vote, according to board minutes, and president Stacy Kinder was not in attendance.

Smee said the proposal wouldn't be detrimental to the state retirement system or the school district, although he acknowledged there is some risk for both parties.

"Technically, if he's released from his contract, it affords him no protection ... and he has no contract and no obligation to us," said Smee, who called the matter a "nonissue."

The school board member said at this point he would have no problem voting for Welker's return. He said the superintendent has served the district well, and he believes the continuity of leadership is critical to the district.

mkittle@semissourian.com

388-3627

Pertinent address:

301 Clark Ave., Cape Girardeau, MO