Bills Would Limit "Double Dipping" by State Employees

Bills Would Limit “Double Dipping” by State Employees

Date Thu, Dec. 8, 2011 - 9:42am By Hamilton

The Assembly Committee on Insurance held a hearing November 17, on two bills that would limit the ability of public employees who retired, and were later rehired to collect a salary and a pension simultaneously.

Currently, under Chapter 40, this practice is legal. State workers can retire, start collecting their pensions and then go back to work 30 days later to earn a salary in the new position.

This practice is sometimes called “double dipping.” Double dipping is often alleged when a public employee retires from one public sector job, receives their pension, and then is rehired into another public sector job and receives a salary in addition to the pension.

The headline that sparked the new legislation concerned a University of Wisconsin – Green Bay employee who had retired with a $40,000 – $70,000 pension, and then later returned to that same public sector job with a $131,000 salary in addition to the annuity.

Under current law, when a participant in the Wisconsin Retirement System (WRS) terminates employment and begins to receive an annuity, he or she may return to public employment, continue the annuity, as well as earn wages from the new public sector employment.

Newly introduced legislation, Assembly Bill 318, provides that if a participant in the WRS who is receiving an annuity takes another public sector position where he or she is expected to work at least one-half of what is considered full time employment, the annuity must be terminated until after employee terminates covered employment.

Those who maintain the Wisconsin Retirement System, and more specifically, the state Employee Trust Fund, are concerned that this “loophole” actually threatens the solvency of the fund itself, especially in light of the fact that over the next 19 years a large majority of baby-boomers will be reaching the age of 65, the normal retirement age. A companion bill, Assembly Bill 352, would extend the waiting period between retiring and returning to work from 30 days to 180 days. The purpose of this bill is to discourage premature retirement, even if double dipping is eliminated.