March 11, 2012

More than 1,200 public workers double dipping

As private-sector retirees took hits, many Mainers worked for the state or schools while also getting state pensions in 2011.

By Susan M. Cover scover@mainetoday.com
State House Bureau

and John Richardson jrichardson@pressherald.com
Staff Writer

(Continued from page 2)

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Norman "Kenneth" Smith, superintendent in Millinocket, said double dipping has been a recurring complaint at least since 1991, when he retired at age 53. He received a combined $141,471 in 2011 in salary and pension benefits.

Smith actually stayed retired for eight years before going back to work for school departments in need of experienced superintendents.

"There's a feeling on the part of some people that 'let's give these young people a chance,'" Smith said. "The reality is there aren't enough people with any experience."

He said he understands why it doesn't look good for public officials to retire one day and go back to work the next. "Frankly, I think there should be a little hiatus between the two."

But, Smith said, those who do retire and go back to work are not getting anything they haven't earned.

"That's my money. If I want to sit on it, I can sit on it. Or if I want to work, I can go to work," he said. "Eventually, you're going to get the money. You've earned it."

Smith said he has hired back retirees who found they could no longer cover their property taxes or other expenses.

He also recently convinced a highly valued school principal to stay on for another year after she retired.

"It's a heck of a deal for a district," Smith said.

School districts don't contribute to their employees' retirement -- the state does that -- but they do spend less on health insurance when they hire a retiree, superintendents said.

TIGHTENING RETURN-TO-WORK RULES

Public employee retirement benefits have been hot topics nationwide in recent years, in part because of a growing sense of "pension envy," said Steven Sass, program director for the Center for Retirement Research at Boston College.

"State workers are one of the very few with defined-benefit pensions," he said. "People with secure defined-benefit pensions are considered a lucky group."

In a defined-benefit system, the retirement benefit is guaranteed, and the employer assumes the investment risk if the market drops, as it did in 2008.

Maine's retirement system works something like Social Security. In fact, it replaces it. Unlike in some states, Maine's public employees do not get Social Security benefits.

Maine state employees and school workers pay into the system while they are working, and the state pays the employer's contribution.

There are no restrictions to keep state retirees from returning to work, even in the same job. Workers have benefits reduced if they retire early, however, and their pensions stop building as soon as they retire, even if they go back to work for many years.

Private-sector retirees collecting Social Security also can return to work with no penalty, as long as they have reached their retirement age.

Private workers also can collect reduced Social Security benefits if they retire early. If they return to work before reaching their retirement age, however, a portion of the money is held back until the person reaches full retirement age.

Snell, the national pension expert, said a dozen states have changed their return-to-work rules since 2010, with most of them putting in place more restrictions. Snell said he wasn't aware of any states that prohibit it, and he said that if any do, they would be an exception.

In Michigan, for example, workers who return to service may keep pension and health benefits only if they earn less than one-third of what they were earning before they retired. If they earn more than one-third of their pre-retirement income, their pension and health care benefits are suspended until they stop working.

And in South Dakota, workers lose all retirement benefits if they return to work sooner than three months after retirement. After three months, their retirement benefits are reduced by 15 percent.

"The major theme has been the general sense in the public that it is just not desirable to have somebody collect a pension and collect a salary," Snell said.

At the same time, he said, "If you view a pension as deferred compensation, this is money the person has earned."

MaineToday Media State House Writer Susan Cover can be contacted at 620-7015 or at:

scover@mainetoday.com

 

MaineToday Media State House Writer John Richardson can be contacted at 620-7016 or at:

jrichardson@pressherald.com

 

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Public employees

Do you believe Maine should put in place more restrictions on benefits or compensation for workers in the state's public employees retirement system who retire and then return to work?

Yes

No

View Results