March 3, 2013

As double-dipping grows, so does scrutiny of state pensions

Maine lawmakers, who’ve taken steps to discourage the practice, largely agree the public retirement system can’t be sustained in the long term.

By Eric Russell erussell@pressherald.com
Staff Writer

The number of public employees in Maine who are collecting retirement pensions while also earning a salary has doubled over the past decade, a Maine Sunday Telegram analysis shows.

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Lance Libby, 64, is a retired teacher who has gone back to work as a regular substitute. His wife, Linda Libby, 65, also is a retired teacher who works as a regular substitute.

Gabe Souza/Staff Photographer

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Because of a reporting error, the chart misidentified Donald Siviski. He is the former superintendent of RSU 2 but currently works for the Department of Education in Augusta.

The practice – commonly known as double-dipping – has continued to grow even after the Legislature adopted restrictions in 2011 to discourage it.

At the end of 2012, there were 2,334 state employees who collected both a public pension and a taxpayer-financed salary, according to data provided by the Maine Public Employees Retirement System in response to a Freedom of Access Act request. The total includes state, county and municipal workers and represents about 6 percent of all public employees who received pensions last year.

The number of double-dippers in 2012 increased only slightly from the year before but has jumped by 86 percent in 10 years and by 150 percent in 12 years. In 2002, there were just 1,266 double-dippers in the public retirement system. In 2000, there were 936.

The top 15 employees in 2012 earned more than $150,000 in combined salary and pension benefits and the top three made more than $200,000. On the other end, 17 percent of all employees in the database made less than $1,000 on top of their pension.

To taxpayers, many of whom have lost their own pensions in the private sector, double-dipping is a source of frustration or envy. Defenders of the practice, including some working retirees, counter that there is nothing wrong with the arrangement and that it can actually save the state money. Lawmakers largely agree that the problem lies not with double-dippers but with the pension system itself.

UPDATED NUMBERS SHED NEW LIGHT

An analysis of the state’s latest “return-to-work” data by the Maine Sunday Telegram reveals:

224 employees, about 10 percent of double-dippers, retired and then were rehired the same day. A total of 943 employees, about 40 percent, retired and were rehired within two months.

About half have been working and collecting a pension since before 2009. About one-quarter have been working and collecting a pension since before 2005. A handful have been double-dipping since 1999.

The average annual retirement earnings among double-dippers was $28,762, although 113 employees made more than $50,000 from their retirement.

For 2012 earnings, 214 (9 percent) made more than $50,000, while 1,403 (60 percent) made less than $10,000.

The updated numbers shed new light on double-dipping as the Legislature prepares to debate a bill that would undo changes made two years ago in an effort to discourage the practice. As of Sept. 1, 2011, new employees who retire and go back to work can earn only 75 percent of the posted salary and can only work for five years. Based on the 2012 data, the change did little to stop the flow of new double-dippers.

Kathy Morin, a data specialist with the Maine retirement system, said the number has been increasing because people are living longer and working longer, but also because of economic concerns such as high health care costs. The actual number of state retirees who have gone back to work is much higher because the state does not track those who are rehired in the private sector.

Opinions about double-dipping range from Gov. Paul LePage, who in January referred to these workers as “unconscionable” and “absolutely disgusting,” to Maine Education Association President Lois Kilby-Chesley, who said employees are just collecting benefits earned through years of service.

Because state pensions are guaranteed benefits, retirees get the same amount of pension money no matter what is in the fund. However, because the fund has taken a hit in a bad economy, the state and municipalities have been forced to subsidize the retirement fund. That’s where the criticism comes in.

(Continued on page 2)

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