- Paris Flash
- Real Estate
By JEFF PARISH
Paul Trull may have to pay back some of his retirement benefits to the Teacher Retirement System of Texas.
The problem revolves around a recent TRS opinion regarding Educational Independent Contractors LLC, the company that Trull used to work as an independent contractor for Paris Independent School District.
The retirement system has said Trull was an employee of the company rather than an independent contractor.
“TRS is aware that representatives of the company do not agree with this determination but TRS is the entity authorized by law to determine who is an employee of the TRS-covered employer,” a notice on the Teacher Retirement System website reads.
“Employment of a retiree in this arrangement is subject to the laws and rules governing employment after retirement and must be reported each month on the Employment of Retired Members Report. Any applicable surcharges must also be paid.”
“We have received that opinion also,” Robert High, assistant superintendent for human resources, said in an email that put an emphasis on “opinion.” “Mr. Trull is currently an employee of PISD under contract as superintendent. He is not an employee of EIC. He is subject to TRS rules.”
Trull did not answer questions about the opinion or its ramifications. He issued a simple statement: “I am employed as superintendent with a board approved interim agreement, that has a 10 day out clause. I am reimbursing the district for surcharges. The school attorney handles all legal matters.”
In 2011, Trull announced his retirement under the Teacher Retirement System of Texas effective June 30.
That August, the school board approved an agreement between Paris ISD and Educational Independent Contractors for Trull to perform all the duties and responsibilities of superintendent.
He resigned as acting superintendent last month and was hired to work for PISD as interim superintendent through June 30, 2013.
Officials with TRS could not elaborate on the superintendent’s situation because individual information is confidential by law.
TRS Communications Specialist Juliana Fernández Helton said state law limits a retiree’s work for a school district for the first year. The retiree must take off at least a full calender month before working half-time — an average of four hours per working day in a month — or as a substitute. To work full-time for a district, a retiree must sit out a full year first to avoid any kind of penalty.
“Without the required 12-month break in service, the retiree will forfeit the monthly retirement annuity for every month that work exceeds one-half time,” Helton said.
Such limits do not apply to employers not covered by the Teacher Retirement System or for indepenent contractors.
According to the most recent issue of the TRS newsletter Update, EIC sells shares of its own stock to a retiree, who then uses that capacity as a shareholder to enter into a contract for services with a school district or other employer covered by the Teacher Retirement System. The district pays EIC, which then turns around and pays the retiree.
Those retirees expected they would be considered independent contractors rather than employees. That would allow them to avoid the work limits. This would also allow the district to avoid paying surcharges to offset the benefits a retiree receives from TRS.
After conducting a review of the company, Teacher Retirement System of Texas determined EIS is a third-party entity and the retirees involved were employees of EIC and not independent contractors. By TRS rules, that puts the retiree in the same classification as working for the district directly.
As Trull did not wait a year between retiring as superintendent and beginning his contractor work, that puts him in a situation where he could have to repay money earned from his teacher retirement if some other agreement has not been reached.
It could also mean an added expense to PISD if Trull were not reimbursing the district. When a retiree is hired to perform a job that would normally fall under Teacher Retirement System coverage, the district has to pay surcharges for pension and health benefits for retirees participating in TRS-Care.
A TRS brochure about working after retirement says without that 12-month break, a retiree loses his payment each month worked for a district more than half time. It also implies that superintendent as a job would probably be unsuitable for an independent contractor.
Gary Proffitt, the head football coach at Goldthwaite, found himself in a similar situation earlier this month. He was filling the role as an independent contractor. Because of the changes in TRS’ rules for independent contractors, Proffitt must repay the retirement benefits he received and he was reassigned to half-time duty as assistant coach.