STATES ACT TO CURB "DOUBLE DIPPING"
December 3, 2009
States pummeled by the recession and heavy job losses are moving to bar government employees from "double dipping" -- the practice of collecting a pension and a paycheck at the same time. The new rules are meant to curb employees from retiring only to return to their old jobs. They come at a time when unemployment has climbed to its highest level in 25 years, says USA Today.
A state audit in Utah identified more than 4,300 public employees in the state who also collected public pensions. A review in Florida found more than 9,000 -- among them, prison wardens, college officials, and the former chief judge of the state's highest court, according to the St. Petersburg Times.
The nation's state and local retirement systems lost about $800 billion in 2008, says Keith Brainard, research director for the National Association of State Retirement Administrators.
What some states are doing:
- New Mexico Gov. Bill Richardson proposed changes in November that would bar new government retirees from double dipping; state legislators had already backed a broader plan that would also have limited current retirees.
- The board that runs South Dakota's public retirement system will meet this week to consider changes that would make public employees wait four months after they retire before seeking a new government job.
- Florida Gov. Charlie Crist signed a law in June that requires new retirees to wait at least six months before returning to work.
- Arkansas lawmakers are considering a measure that would stop elected officials who quit from returning to work.
- Utah lawmakers will consider an overhaul when they convene in January.
Employees who double dip tend to collect benefits sooner:
- South Dakota's planned changes will save only about $5 million a year, says the system's executive director, Rob Wylie.
- New Mexico's proposed changes would save about $7 million.
- An audit this year for Utah lawmakers suggested that double dipping by employees there could cost the state as much as $900 million over the next decade.
Source: Brad Health, "States act to curb 'double dipping,' " USA Today, December 3, 2009.
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