Friday, April 5, 2013

Again with the double-dipping; thank a Republican

Posted By on Fri, Apr 5, 2013 at 1:29 PM

I've been surprised that the new Republican majority didn't take aim at public employee retirement benefits first thing. It's a legitimate and growing issue, with ever increasing state contributions reqjuired to make systems sound and exploding health care costs that the state subsidizes not only for retirees but also family members. The laws seem to encourage public employees to retire too early.

Maybe a reluctance to deal with this is because legislators are future retired public employees themselves, along with lots of their constituents.

(Legislation was introduced to force future state employees into self-supported 401K-style retirement savings plans, with an opt-out. This is a good idea conceptually, but the specific case raises a question or two. Stephens Inc. runs this program for the state and a forced enrollment will increase enormously the amount of money under management. Did anybody propose bidding this work to get the best rate possible? I don't think so. I happen to have a bit of personal insight on the efficiency of management, too. My wife retired Dec. 31 and three months later has not managed to be allowed to roll the money over into a plan with lower administrative expenses, though, after some bad information from "customer service", the ball finally seems to be rolling.)

Whatever. Today, George Hopkins at Teacher Retirement sent a message on Twitter that a "shell" bill by Republican Sen. Bryan King had been fleshed out in a way that looks to me will supercharge the double-dip movement. Where the law provided a six-month termination period for a retired teacher to go back to work in an agency covered by the system, the new bill would allow an employee to retire and move back into a covered job after 30 days. The bill is also retroactive to July 2011. Hopkins writes that this could encourage more people to retire and that any retroactive application has costs to Teacher Retirement.

You may remember that the six-month limit was imposed after the discovery that so many people were taking sham retirements and then going right back to work in the same jobs so as to draw both retirement and regular pay. Sweet deal, but not exactly what retirement was supposed to be about.

Bryan King is a great government cost-cutter when it comes to some costs. Others not so much.

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