Wednesday, April 06, 2011

Attack on "double dipping" by retirees wouldn't save money

A report on a proposal to disallow state employees from drawing a paycheck and a state retirement check simultaneously has me a bit confused as to how it's supposed to cut the budget.  From KRGV-TV in the Rio Grande Valley: "A bill is pending right now in the state legislature that would ban double dipping in Texas. Under the bill, if a retiree comes back to work for the state they would not be able to continue collecting a pension at the same time." The Department of Criminal Justice leads Texas agencies in this category, says the TV station, with more than 1,500 employees "collecting more than $67 million in pension and wages."

That's all fine and dandy, but my question is, how does this save any money? Presumably the retirement benefits remain a state obligation, and the jobs those employees are doing still need to get done. If the state makes those employees choose, they'll rationally choose money for free over money for work, so TDCJ would lose 1,500 of its most experienced, reliable employees and still have to pay others to cover their duties. Moreover, given the high rate of turnover among new employees, TDCJ has to hire five new people for every one who sticks around.

I understand why someone might be upset about so-called "double dipping," but I fail to see how forbidding it would help significantly with the budget.

26 comments:

Anonymous said...

Your right Scott, there is no real savings to the State only a feel good savings. The State over the years has seen retirees as a group they could exploit, years ago they tried limiting the number of nonths they can recieve retirement and work. Remember this, return to work retirees do not have the state contributing to their retirement, the medical is a wash as retirees recieve it either way and most would go to work somewhere else if not the State. As for most retirees they cannot make enough to live on. I'm not counting the top 5%. So the state gains experiance as you state.

Ham2mtr

Anonymous said...

It is good business sense to re-hire retirees.
It reduces the cost of training, equipping, and provides a continuam of services.
The only thing that I can see as a negative is the rise in cost of health related issues.
Most retirees will be on some type of prescription meds for one reason or another, and they will utilize more sick time off, which will reduce the workforce.

At best it is a double edged sword, but everything is some sort of trade off.

I think that the reduction in training will offset the healthcare cost. It would be interesting to see the spreadsheet on this issue.

Anonymous said...

Except when those management retirees retire to just come back into their position they retired from...which happens so the primary reason they do this is to obtain two checks and not allow other experienced tenured staff who still have years in them to work and would like to move up the career ladder. So in essence they're really NOT retiring.

Anonymous said...

When a double-dipper takes a state job, he/she does not pay into the retirement system. In contrast, when a non-double-dipper takes a state job, he/she does pay into the retirement system. Ergo, double-dippers taking state jobs degrades the financial health of the retirement system That's the difference, and it's an important difference.

Anonymous said...

Am I missing something? Havent those eligible retirees already paid into the system and are drawing their own money they WORKED FOR and paid into the system? Kinda scarey that the state budget might be relying on state employees retirement money to fix the deficit!!!

Anonymous said...

@ 8:12 said "As for most retirees they cannot make enough to live on."

Are you for real? Receiving 85% or moreage of their las three highest paid years and say they can't make it? Insurance paid for and they can't make it?

Retire/rehire is a good program. Keep it!

Anonymous said...

08:48 said: "The only thing that I can see as a negative is the rise in cost of health related issues."

The retiree's are already under the state health plan and start over on sick leave accural. So this cost is a wash.

As for paying into the retirement system, I agree they have already paid in and unlike social security the system is sound. But if there was a benefit to be earned, most teturn to work retiree's would be glad to pay into the system. But not as a work tax rebate to the state for a job as some propose.
Ham2mtr

Anonymous said...

These double-dippers resign from their jobs, stay away for a month or two and come back to the same job. Now they get two checks. Good deal.

Anonymous said...

Retiree don't receive 85%..get real.

Anonymous said...

Most state retirees do not recieve 85% to do so you would have to work 38 years. And according to the Employee Retirement System of Texas web site, "Average ERS retirement annuity $1,476". As Scott said there is no economic benefit from attacking RTW retirees. And as I said, this is only feel good leglslation.

Returing to work as a retiree does help equilize the pay differential between State and private sector jobs.
Why stay with the State, well some of us like what we do and feel we are making a difference.

Ham2mtr

Old School 01 said...

I really don't care what it costs etc. All the good things about state employment at the prisons is slowly being ripped away. All the chairs in the leg and capitol were made by convicts at no cost. Free meals oh darn. Cheaper housing. Vehicles, phones, even a computer. Haircuts and uniforms. I even took a lower salary in lieu of stability now that's gone too. So somebody has managed to work long enough to retire and then come back and help some more and make a little money big deal. Come on out and deal with society's trash and see how you like it Whitmire, Shapiro & Madden.

Anonymous said...

I suppose the theory is to replace higher paid senior people with lower paid new people. Given the state budget situation I doubt quality of service or experience of dedicated RTW employees was a factor. It's all about the bottom line nowadays.

Anonymous said...

The article said "Taxpayers could save $135 million if the legislature passes the bill putting to an end to double dipping."

Where does the savings come from?

Anonymous said...

"Taxpayers could save $135 million if the legislature passes the bill putting to an end to double dipping."

I bet taxpayers could also save 135 million if the Austin elite stop chartering aircraft and start driving.

John Placette said...

As a retired state employee, I would not really want to return to my old job, but with over 30 years experience in the field, I may want to seek a similar job.

Would it be fair to penalize me for perseverence?

Isn't that a quality employers seek?

John Placette said...
This comment has been removed by the author.
Anonymous said...

The facts of the matter are this:

1) Once a state employee "retires" and starts receiving benefits, he has already earned those benefits.

2)If that employee goes back to work for the state, his salary should be separate and above from the retirement benefits he is already earning, since he has already earned those benefits.

3) If that employee goes back to work for the state, he should not have to contribute to ERS, unless he can retrieve those benefits upon his termination.

Anonymous said...

"Taxpayers could save $135 million if the legislature passes the bill putting to an end to double dipping."

Sure they can, I see lots of licensed professionals with or without experiance running to the state for jobs.

Anonymous said...

Most double dippers that come back 91 days later are allowed to come back to the same class and same job with the same amout of money they left at. I could hire 2 new folks off the street and give them the chance to become state employees. It is call a cycle. You need to have employees putting into the retirement system in order for the $$ to go out. It gives no one the chance to move up into a position if we intentially hire the same person back. It's the same issue with social security. Will it really be there when you get ready to retire??? So the question would it save money. Answer is yes, because you could decrease the salary by hiring a different person into the position.

Anonymous said...

I would like to see the double dipping stop because of two things. 1-get new blood in the job and a fresh face and 2-the retiree coming back always wants to do things they way they were always done and not open to new technology or procedures.

John Placette said...

At one point in my career, the state offered a retirement incentive and many people did retire. What was lost was an "institutional memory". It took several years to re-establish it. Many of us compensated by calling those who had retired and asking question after question. If too many retire, one loses the experience and efficiency needed.

Retirees have earned their retirement. We shouldn't penalize someone for making good fiscal decisions for themselves and their families.

You could require them to contribute a percentage to the retirement system and still come out ahead.

Nancy Nurse, R.N., BSN said...

Oh yes, significant savings could be found if the many "double dipping" nurses were relieved from this state mental hospital. They all hold administrative positions,and make 3 to 4 times the salary of the average staff nurse plus their longevity pay. We do not have a nursing shortatge in this area and we need to allow other nurses to hire on and move up the carreer ladder. We have a large turnover of nurses because this administration still wants to run things like they did 30 years ago. They are very resistent to any changes and basically it's "their way or the highway". We have lost many highly educated/experienced, competent nurses that should have been allowed to bid on these positions, but they were never posted. The positions were just held for the retirees to come back to.
NOT AN EQUAL OPPORTUNITY EMPLOYER!!

Anonymous said...

The practice of "double dipping" is so widespread that few really recognize it. Just one example is an employee drawing a military retirement. If the concept is properly applied, the savings come from not providing the 'double dipping' employees with benefits. They should already be supported by their retirement benefits and should draw only an hourly wage. As several noted, there are potential drawbacks but I've run large public organizations and have had great success with the practice especially in the area of job sharing.

Anonymous said...

Much like the tenuered teachers. They get to a position where they feel too safe and just show up but provide nothing to the students. Get rid of the old deadbeats and bring in new life, full of vigor for the kids teachers.

Anonymous said...

I'd never return to the state for any service, and I never retired after 17 years. I just don't believe in John Whitmire. I don't believe in Rick Perry. We need term limits in Texas.

Anonymous said...

You're one of the typical hang-ons of TYC culture. Don't notice the abuse and weird happenings...just look out for yourself and your retirement. Do you even know what TYC is about? I thought so..NO. Another TYC lost person. More nothing in TYC.