HeySquare
German Village
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OK... so earlier today I some people mention the buzzword "double-dipping".
From what I understand, the phrase is used to indicate when someone is collecting a pension, and gets hired back on a contract basis to do the same work for which they are now collecting a pension.
I would have thought that this would be considered a cost-cutting measure?
thepiece
merion village
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It refers to someone who is rehired in a public sector our public pension eligible job while collecting a pension (from OPERS or STRS). (there is a waiting period before you can get rehired)
I don't agree with it personally (and I'm in OPERS) and think they should not allow it, but I don't think that it happens that often or has that much of a financial impact on the health of the pension system (considering how much attention it gets).
dru
IV
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HeySquare wrote >>
OK... so earlier today I some people mention the buzzword "double-dipping".
From what I understand, the phrase is used to indicate when someone is collecting a pension, and gets hired back on a contract basis to do the same work for which they are now collecting a pension.
I would have thought that this would be considered a cost-cutting measure?
i think the issue would be:
- your pension is guaranteed as x% of your job (sometimes up to 100%)
- employer doesn't pay this until you retire
- you may be eligible to retire by 55,60... depending on the contract, but the pension is not annually paid out until you retire
- so the employer only pays pension if and when you retire, not at a set age
- so until you retire the employer pays salary but no pension (although they obviously pay into the pension plan)
- if you retire and then return to work on a contract, the employer pays pension + salary. at any point your salary = more than the % of your pre-retirement salary not matched by the pension, you are making more and they are paying more.
- the other issue is if people return as contract employees, they may be taking from the system without actually contributing anything from their new salary into the system.
it's probably all more complicated than that, but i think that gets at the issue.
Twixlen
Westgate, Columbus
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When I worked for the Postal Service, it was a totally common practice. Guys would stay in the military long enough to get a decent retirement/pension, then go to the USPS (where they had preferential hiring for vets, so it was fairly easy to get in, in spite of testing, etc), work there for 20 years and retire with double pensions.
I never faulted those guys for it - it's actually pretty financially brilliant, but I don't know if that's specifically the double-dipping involved in the OH State pensions.
Andrew Hall
Dennison Place (The Circles)
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Maybe I am wrong here, but it seems like this is only a problem where the pension guarantor has not been financially sound with the pension money - ie it has been going to meet current expenses instead of investment. In fact, it would ideally be a net benefit to the system to have people who are doubly-vested or vested and working. The money is already there *and* more income is being generated by the workforce. That money easily becomes discretionary spending which is a good thing both for sales taxes and business creation. Win-win, if the pension system has been handled soundly.
My understanding is that medical costs are a substantial reason for the financial strains on the retirement system. Costs have outstripped inflation and investment returns substantially as well as the ability of current employees to meet the costs of retirees.
Railing about double-dipping is just scapegoating in lieu of working on the tougher questions like an archaic retirement age, medical costs and related issues.
A.
Bristol Bar
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Wow, they are brilliant.
Analogue Kid
5th by West-Northwest
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OPERS (ironically the most financially sound program) is proposing some not unsubstantial changes to enhance their long term solvency.
https://www.opers.org/News/ORSC/APD%20Primer%2011%2024%2009.pdf These changes would certainly reduce the incentive for double dipping, but from what I understand it's more prevalent in STRS that anywhere else.
Interestingly enough, the responsibility for approving these changes falls on the legislature, and we know how quickly that process moves.
Lakee911
Clintonville (South)
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I see it a lot in the water/wastewater industry too. People will work for a municipality, put in their 20 or 30 years and retire and come back as a "consultant." Generally they are paid less than their original salary as a consultant and are not necessarily expected to work 40hrs/week. It's allowed because there might not be someone else capable of doing their previous job (ya right).
cc
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State pension, good salary, great benefits, health insurance, early retirement....wonder why there aren't more entrepreneurs in Ohio.
Makes me appreciate the (maybe unkown to him) risks the t-shirt salesman on the front page (homage.com) is taking over the more risk averse public servants.
Either way, you have to pay (time vs potential & freedom of ownership) to play.
thepiece
merion village
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State pension, good salary, great benefits, health insurance, early retirement....wonder why there aren't more entrepreneurs in Ohio.[b]
Don't forget...pay freezes or the raises locked at 1 to 2% regardless of performance, generally lower salaries (based on the education/skills expected) and that you have to put in three decades of service to retire with the State (I wouldn't necessarily call that early retirement)...or maybe your department gets wiped out with the stroke of a pen by an incoming governor for political reasons (once again regardless of performance).
You can't lay only spell out the up side without noting the other aspects of a public sector career.
manticore33
Delaware, OH
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It is not all sweet and rosy working in the public sector, especially social services. For instance, over so many years an independent review is conducted regarding wages to determine what an equivalent job in the private sector would pay. The review determined the private sector would earn an extra $2.00-$3.00 per hour for similar work (Case Manger for a Child Support Enforcement Agency). The commissioners did not fund the pay increase nor did they give us raises that year. Likewise, we would run short-staffed from time to time due to the near six months hiring process.
Government contracting is where it is at. ;)
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