It's time to end state government's so-called "retire/rehire" program, which allows workers to retire and return to work a short time later, thereby drawing both a salary and a public pension at the same time.
At a time when the state is facing a $4.6 billion budget shortfall, every bit of money saved is important.
The state loses money on the retire/rehire program because the prospect of being rehired encourages workers to retire earlier, according to a 2005 state study. That further drains a pension system for older retirees that is already underfunded to the tune of more than $4 billion.
According to estimates, Rep. Barbara Bailey’s legislation, House Bill 1083, would save the state about $2 million by discouraging early retirements.
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Senate leaders also have thrown their considerable clout behind legislation to end the retire/rehire program.
Senate minority leader, Sen. Mike Hewitt, R-Walla Walla, and Senate majority leader, Sen. Lisa Brown, D-Spokane, have teamed up to co-sponsor Senate Bill 5852.
“Our next state budget is already in a five-billion dollar hole, and our pension system is seriously underfunded,” said Hewitt. “The last thing we can afford — and the last thing taxpayers want — is for state government to be paying state employees both a retirement check and a salary at the same time.”
As Hewitt notes, historically, public employee retirees could work only part-time while remaining eligible to receive retirement benefits. In 2001, responding to testimony from school employees about a shortage of teachers and administrators in certain fields, the Legislature passed “retire/rehire” legislation. The legislation authorized K-12 and state employees to work up to 1,500 hours a year (full-time for a school employee) while still receiving retirement benefits.
Reports of abuse have been leveled against the program.
Hewitt said, “A recent Seattle Times investigative series reported that 2,000 state employees were collecting both a pension and salary, costing taxpayers about $85 million yearly. The investigation also found the positions were not advertised and the retirees were hired within weeks of retirement.”
Hewitt said, “I’ve regretted voting for that bill for the last 11 years. It had good intentions, but it looks like the system has been abused.”
In August 2009, a whistleblower asserted the Department of Employment Security was re-hiring retirees without proper justification and authorization. The whistleblower also said Employment Security officials were falsely reporting to the Department of Retirement Systems that the retirees had met all hiring provisions when they had not.
An investigation by State Auditor Brian Sonntag confirmed the whistleblower’s complaint. In his report, Sonntag said, “Based on our investigation, we found reasonable cause to believe the department violated state law and its own policy.” Employment Security officials subsequently put systems in place to end the abuse.
Under the bills introduced by Hewitt and Bailey, a Republican from Oak Harbor, school districts and agencies of government would lose the ability to tap their retirees for full-time jobs. They could still hire retirees part-time.
That seems reasonable.
Former supporters of the retire/rehire program are grudgingly giving it up.
“It’s served its purpose in most areas,” said John Kvamme, a lobbyist for school administrators and principals.
The bills have broad support, with the University of Washington, Washington State University and community colleges telling lawmakers they favor halting the retire/rehire program.
Lawmakers, over the years, have put limits on public employees returning to work. Unfortunately, abuses have continued, even with tougher legislative limits in place. In this economy, it’s time to end the double-dipping and call a halt to the retire/rehire program.