CHICAGO (AP) — A new state law barring government
employees from drawing a pension while earning another public paycheck doesn't
apply to the vast majority of current workers, leaving thousands free to
"double dip" after retirement and doing little or nothing to help
salvage desperately underfunded pension systems.
Responding to high-profile examples of double
dipping and a public eager for pension reform, legislators last year passed a
law restricting the practice, though only for workers hired — not simply
retired — after Jan. 1 of this year. That means most current employees would be
permitted to double dip even if they retire decades from now.
Lawmakers said they had no choice because the state
constitution doesn't allow them to reduce retirement benefits for unionized
public employees, meaning they could not stop pension payments regardless of an
employee's future job status.
But critics say that's a matter of interpretation,
especially because future double dippers already would be retired from their
current jobs before they got another, and there is no specific vested right to
employment in other government jobs.
"Some say ... that anything (an employee) is
forecast to earn from the date they're hired means they're entitled to it.
That's questionable logic," said Laurence Msall, president of The Civic
Federation.
Critics say double dipping is a violation of public
trust and a potential drag on pension systems, especially when people retire
early knowing they can supplement their income with another government job and
draw pension annuities for many more years than they otherwise would have.
State pensioners already were banned from working
within the same system; the new law extends to both state and municipal workers
and any public pension system.
State Rep. Karen May, a member of a legislative
pension committee, also introduced legislation signed by Gov. Pat Quinn this
summer that forbids anyone hired after Jan. 1, 2012 from returning to work in a
government job as a full-time contractor while drawing a pension.
"I think most people feel double dipping is an
abuse," May said. "I'm not trying to (take away pension benefits),
I'm trying to stop the abuses and some of the games people play."
Others say double dipping isn't inherently bad,
especially if it allows the state or municipalities to keep experienced
workers. They say double dippers have become easy targets in states that have
allowed pension funds to drop dangerously low through years of skipping or
skimping on contributions. Illinois' five state pension systems are underfunded
by more than $80 billion.
"The real bottom line is that the pension
crisis in Illinois is a funding crisis ... that has nothing to do with
benefits," said Anders Lindall, spokesman for the American Federation of
State, County and Municipal Employees. It was "entirely caused by
politicians, mostly at the state level, failing for years to pay the employers'
share of pension contributions."
"My perception of what gets people upset is,
even though you can (double dip), should you?" Blair said.
Glenn "Max" McGee said he understands
opposition to double dipping but insists that, in his case, others also
benefited.
He retired as superintendent of the Wilmette School
District north of Chicago in 2007 and draws a $184,100 annual pension while
earning $225,900 a year as president of the Illinois Mathematics and Science
Academy, a public boarding school emphasizing math and science. But he says he
took a $40,000 pay cut when he took the new job, accepted $10,000 less than he
was offered and got one raise before freezing his own salary. "The way I
look at this, if I'd (continued to work) full-time at Wilmette, the (academy)
would be paying somebody more than me ... and I would be getting a bigger
pension," said McGee, who said he "jumped at the chance to get back
into state service" and lead the academy as well as a rewrite of the state
educational report card.
His is just one notable example of double dipping
in Illinois; there are plenty more, including a retired Kane County prosecutor
who gets a $78,000-a-year pension while earning more than $174,000 as a state
court judge; a retired Chicago police officer who drew a $115,500 pension while
earning more than $157,000 in another city job.
Still, it is difficult to calculate the effect of
double dipping on the pension system, partly because nobody is sure how many
double dippers there are in Illinois.
State and municipal pension systems rarely share
information because of privacy concerns, Blair said. Databases of government
retirees and employees provided to The Associated Press did not include
information specific enough to positively determine all double dippers.
The bottom line, watchdog groups say, is that
banning double dipping is probably good public policy on principle, but will do
little to stabilize pension systems.
"If they're looking for solutions, they really
need to look elsewhere," said Ralph Martire, executive director of the
Chicago-based Center for Tax and Budget Accountability, who favors higher
income taxes on the wealthy and taxing consumer services.
Msall and Jim Farrell, chairman of the Civic
Committee of the Commercial Club of Chicago, a business group that examines
public policy issues, say the solution is changing benefits for current
workers, even though it could lead to a constitutional challenge.
"In truth, while (double dipping is) obnoxious
and reprehensible, at the end of the day, when you take a look at how much
money the state is in arrears, it's not that big of a deal financially,"
Farrell said. Banning it for future employees, he adds, was "a way for
lawmakers to ... put things off and not face reality."
Copyright 2011 The Associated Press.
