Teachers: How would you like to make an extra $25,000 and keep the same job?

Hundreds, if not thousands, of Arizona educators are increasing their compensation by 50 percent or more. They take early retirement and then go right back to work, sometimes in the same classroom or administrative post.

In this way, a teacher can increase his or her annual compensation of $50,000, for example, to $75,000, overnight, for doing the same job.

Now, school districts are learning that they, too, can benefit from this stratagem. The districts can save as much as $17,000 on each employee who retires early and then returns.

This may seem impossible, schools saving money even as educators get paid more.

Actually, it's easy. All they need to do is to get somebody else to pay the bills.

Surprisingly, some officials I talked with appeared unconcerned about this arrangement's financial impact. They saw the early retirement benefit as a well-deserved "reward" for career educators. I see the arrangement as a potential financial train wreck.

The strategy takes advantage of rules that allow members of the Arizona State Retirement System to retire after they earn 80 points, calculated by adding their years of service to their age. Thus, somebody who goes to work fresh out of college at age 22 and works continuously is eligible for retirement at age 51.

The retirement system covers employees of the state, cities, towns and counties as well as educators. But only in education has an infrastructure been developed to aggressively take advantage of the early retirement benefits.

First, two new companies found a way around a double-dipping law that requires retiring educators to wait a year before returning to the schools full-time.

These companies hire the educators and then "lease" them back to their former school district or another. Consequently, it is possible for a teacher or administrator to "retire" and be back in the same job at the same school within a matter of days.

Second, school districts realized they could save money by hiring back retirees because neither the retiree nor the district has to contribute to the retirement system. The savings are substantial. This year, employees and districts each are required to contribute 5.7 percent of the employee's pay. Next year, the contribution will be 8.25 percent.

Moreover, because the retirees are receiving a full pension, many are willing to accept a lower salary when they return. School districts frequently pay them 80 percent or 85 percent of their previous salary. That allows the district to cover the private companies' 9 percent commission and still have something left over.

This arrangement is so lucrative that some cash-strapped school districts encourage eligible employees to retire and then come back to work through one of the private companies.

The two companies - Educational Services Inc. and Smartschoolsplus - have reported a total of 500 educators statewide on contract this year. That's a saving to school districts of millions of dollars.

But those 500 are only some of the retired educators who are back on the job. Tucson Unified, for instance, has 122 retirees on the payroll, full- or part-time, none through the private companies. Susan Wybraniec, executive director of human resources, estimates they are saving the district $678,000, or about $5,500 each.

Across town at Sunnyside, 61 retired teachers, administrators and classified employees are back at work, 44 of them through Educational Services.

Hector Encinas, Sunnyside's business and finance director, estimates savings this year to his district of more than $1 million - or an average of $17,400 per employee. (TUSD and Sunnyside calculate the savings differently. Wybraniec included only the savings in retirement system contributions and health insurance benefits. Encinas compared what the employees would have cost the district had they not retired.)

Astoundingly, nobody knows how many retired educators statewide are back on a school district's payroll.

When I talked last week with David Cannella, spokesman for the retirement system, he appeared unconcerned by the trend. But he did acknowledge one problem, of which both Wybraniec and Encinas also are aware.

This practice of rehiring "retired" educators undercuts the retirement system's actuarial assumptions. The retirement system assumes retiring educators will be replaced by younger teachers, for whom the districts will make retirement contributions. But when the districts hire back "retired" educators, they don't have to make those contributions.

This can only be a drain on the retirement system, especially because educators constitute nearly a third of its members.

In response, the retirement system could increase contribution rates. But higher rates would give the districts even more incentive to hire back retirees and avoid the retirement contributions.

Moreover, higher contribution rates would, in effect, require other members to subsidize the school districts.

In short, what Arizona has here is bad public policy with all the incentives in place to make it much worse.

The retirement system and the Legislature have a problem on their hands. They should act before the problem escalates into a political and financial disaster.