Jan 24, 2013

Can you tell me about double dipping?

I keep reading about public officials "double-dipping." Can you tell me exactly what that is and why there seems to be so many governement employees doing it? I'm also wondering if the average Joe, the kind of guy who works in the private sector, can double-dip after he retires and starts collecting Social Security benefits.

First, let me say I am in no way a retirement or pension expert. But, I can provide you with some basic information about public employee retirement and what's commonly referred to as "double dipping"

Double dipping is when a public employee who has retired and is collecting his or her full pension is then rehired and collects his or her regular salary and benefits AND public pension at the same time.

This can happen a variety of ways, but the way most people refer to "double dipping" is when someone — usually in a high-level position — simply submits the correct paperwork to retire and is immediately re-hired at the same agency without ever really leaving the job.

It's retirement "on paper" to start the pension benefits, but the public employee just keeps on working the same job at the same wage.

Why public employees retire and keep working has to do with a few things. One is that they can retire and start collection their pension much earlier than workers in the private sector.

There are different permitted retirement ages for different types of workers (teachers, law enforcement, ect.)

For employees in the Ohio School Retirement System, here is the following edibility table:

A member who joins SERS before May 14, 2008 will be eligible for a guaranteed lifetime monthly pension with the following combinations of age and service credit.
    •    5 years of service credit at age 60; or
    •    25 years of service credit at age 55; or
    •    30 years of service credit at any age.

Members who join SERS on or after May 14, 2008 will be eligible for a guaranteed lifetime monthly pension with the following combinations:
    •    10 years of service credit at age 62; or
    •    25 years of service credit at age 60; or
    •    30 years of service credit at age 55.

Other Ohio public employees have the same eligibility requirements as the pre-2008 teachers retirement eligibility.

Law enforcement officers with at least 25 years of service may file for retirement benefits at age 48 or older. This can include four to five years of military service.

As you can see, these folks can potentially start collecting benefits quite young. A public employee who starts working at age 22 could potentially retire with full benefits at age 52 when he or she is still willing and able to work.

Please note that while it's controversial, there is nothing illegal about public employees taking their pension and continuing to work, so many make the choice to do just that. Whether or not you think they should be able to do this is a matter of opinion.

In the public sector, of course, workers can't retire until age 66 or 67 (depending on when they were born) for full benefits. Those who take early retirement at age 62 pay a 25 percent penalty on their benefits.

Workers who have reached full retirement age can indeed continue to work and receive their full benefits. But, by the time most people are 67, they don't want to continue to work unless they have to. According to the Social Security Administration, social security benefits usually only cover about 40 percent of the average person's expenses. If you haven't saved additional money in a retirement account, you may have to continue to work or learn to live very frugally off your social security benefits.

This may be the longest Mailbag answer ever, but I hope it helps explain things. Because of the sensitive nature of this issue I included links to where I got my information.
 

The Mailbag is a daily feature on SanduskyRegister.com. Every weekday at noon, we will post one question-and-answer from a resident. To ask a question, send a letter to The Mailbag at 314 W. Market St., or e-mail mailbag@sanduskyregister.com. Please include your first name and a location in the e-mail, e.g. “John from Decatur Street."

Comments

MiddleRight

And this is why gov't continue to need more and more money.
Retire at 52, get full benefits, and rehire at some absurd annual salary on top of it. Why again is gov't broken?

WiredMamba666

There's a wide variety of inaccuracies in this story, so much so that I won't even begin to correct them.

However, it does seem that so many local news people are envious of government employees. Register reporters start at 23k a year, have no security, and are completely replaceable. You can see why they want to lash out at anyone with a defined benefit package. Local newspapers exist so local residents can read about which of there former classmates were arrested for DUIs etc. and for nothing higher. Sarah Weber probably got into journalism to write for the NYT, but because of writings like above she writes for the SR. You can see why she's so bitter.

mikel

or law enforcement at 25 years.

BW1's picture
BW1

Middleright, it also happens all the time in the private sector.

MiddleRight

You may want to read this before you comment anymore.
http://www.ssa.gov/pubs/10069.ht...

Also, I am not funding the private sector with my tax dollars.

reader

While double dipping may be legal, the practice doesn't sit well with most folks.

If you want to retire and change jobs, fine. But move over and let someone else have an opportunity for a decent job.

BW1's picture
BW1

They have every opportunity - to demonstrate that they offer more value to the employer, and a leg up in doing so since the "double dipper" by virtue of tenure/seniority, is likely at the top of the pay range. Poor performers aren't invited to stay on after retiring.

Simple Enough II

No there is a great deal of Nepotism or cronyism. Let us use this as an example, say in Sandusky county someone highly placed in the county Human Resource dept. had a relative recently hired into a county VA postion for a position that (reportedly) was not posted or posted in the normal fashion, I believe that would be a fine example of nepotism.

reporter54

so do you propose taking away their benefits or limiting them? and also do you think welfare,unemployment and disability should be done away with? or that they are the same thing? you do realize that retirement accounts usually invest money in the stockmarket to subsidize the benefits along with employee and employer contributions? so how is it the government can go broke if it's not even their money?

arnmcrmn

Most people I know that have retired and then rehired are hired back at lower pay and with minimal benefits, which is cost effective to fill the position.

JACKEL

That sure isn't true in
the case of the Director of JFS in Huron County.You know very well if you retire at 52 you outlive the amount of your account.That is why OPERS has to cut medical and raise retirement age to survive.If you retire from Public Service you should be retired from it.If you want to go work at no brainers,fine.The tax payer should not have to pay you twice.

BW1's picture
BW1

No one is being paid twice. They contributed to their pension, or contributions were made for them in lieu of higher take home pay.

They are operating within the contractual restrictions of their pensions. The time to complain about a deal is BEFORE you sign it, not when the terms come due.

therealrules13

Actually this is really common with teachers in this state. And arnmcrmn has it right. Especially with state retirement packages it is alot cheaper for someone to retire/rehire because it takes a certain burden off the states back for their salary since they usually get bumped all the way back down to starting salary. I know with teachers it can save the state upwards of 20,000 a year per teacher on salary after they have been at a school for over 25-30 years. It isn't as bad as everyone makes it out to be and alot of people who I've talked to mad about it said they were just upset they got to make more money and it was a greed thing.

Informed

Mostly it happens with school administrators--principals and superintendents, etc. They retire from one job and then take a similar job, often in another district.

samiam

Like Eugene Sanders and Bill Pahl.

Simple Enough II

I'm not a big fan of it, but hey you voters decided that back with SB 5. The 5 Pension funds of Ohio are not in as good a shape as folks lead you to believe, hence the latest changes to retirement rules enacted I think this last summer of fall. I did some quick math on them last year and I hope the Ohio taxpayers are not going to be on the hook if they go under.

BW1's picture
BW1

Bingo - if there's a problem, it's with the terms of the contract, and the union's extortionate strong-arming to get those terms.

rickross2

You can't double dip a chip. Thats like putting your whole mouth in the bowl!

Simple Enough II

Funny!

whocares

After I get done paying taxes so Government employees can have a good retirement. I still have to save for my own.

Please

It actually saves the states and cities a ton of money. Once the employee enters retirement, the state or city no longer pays into the employees retirement fund....this saves the state or city a lot of money! Also, the employee now gets insurance coverage though the retirement sysytem, therefore, saving even more money because this no longer comes from the state or city but comes from the retirement sysytem....which has nothing to do with taxes or levies or anything else....straight out of the retirement sysytem.....doubling dipping saves the state or cities a lot of money, believe it or not this is the way it works. This does not hurt anyone but the retirement systems and that does not affect the tax paying citizens in any way no matter how you do the math

samiam

Except that someone who can't retire may lose their job due to layoffs due to lack of funding. So then the taxpayer can pay their unemployment benefits.

Simple Enough II

So please explain why a peson could retire from a government position ( say military) and take a state job be given credit for all of their years of service and start as if they had done 20+ years in that postion with benifits and vacation at that level and not at the entery level?

trafficman

Military time has to purchased to count towards a public pension plan. Not sure of the costs. Just know its better to do it earlier than later.

deertracker

I think it hurts the person looking to fill that job once it becomes available.

grinenbareit

It's funny that they will lay people off, but yet rehire retired employees. One would think that the retiree would have a little bit of conscience about themselves before applying for a job they just retired from....even if it would be at a lower rate of pay. And your fellow employees, without time in, are layed off. With mandatory cuts, one would think that the "bottom feeders" would at least have a chance to keep their jobs, not to be given to someone who wants to "double dip."

Justme...

You'd be hard pressed to find an example of someone who was laid off and replaced with a double dipper. If that could be done it would be done more often to save money.

CAST THE FIRST STONE

the top of the food chain takes theirs and throws the young ones to the wolves. My brother is a principal at a high school and sees it all the time. Funny part is the young ones voted to overturn sb5 that would of helped them so its hard to feel sorry for them.

Simple Enough II

True!

Justme...

You have to, in both the private and public sector, continually raise the retirement age as we live longer and are able to work longer. Sadly, politicians are unwilling to do this because it impacts every single voter. And when they do raise it it feels like too little too late. Resolve this and double dipping will go away because when people hit retirement age they will truely not want to work anymore. That's life folks.

2fast4u2

It's kind of like Roch Hammond working for Erie County and drawing his salary and benefits then having kids repaint the County vehicles through Roch Hammond who then has the County add the additional hours to his salary and overtime benefits through the county.

Simple Enough II

Really, you would think that would make for a goos investigative story for say a "Newspaper"?!

Julie R.

Who is Roch Hammond? Any relation to the former auditor Jude Hammond?

Julie R.

You mean to say there's another Hammond that works for the county? Is that one a Huronite, too? If so, I sure hope he doesn't have a county job that gives him any power or anything --- like authorizing fraudulent transfers of property under fraud documents prepared by idiot attorneys causing serious defects in the titles.

my oh my

We as public employees have earned these benefits due to the time we have given as public servants...It's legal to double dip as some may put it. We have to retire/resign from current position when eligible and then wait at least (2) weeks and then return if employer will rehire us at a different paygrade.