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Is double-dipping a problem?

Last modified: 4/19/2011 12:00:00 AM
A House committee grappled yesterday with ideas to curb double-dipping in the state's retirement system amid questions about whether the severity of the problem matches public perceptions.

Concerns about double-dipping stem from the premise that public employees retire from their jobs once they become pension-eligible and then return to work in order to receive income from two sources.

In New Hampshire, retirees receiving state pensions cannot return to full-time public sector jobs. Instead, "double-dipping" retirees can take part-time jobs, sometimes reducing their hours only slightly.

Lawmakers say the practice hurts the pension system because part-time jobs aren't part of the system.

Instead of hiring a new full-time employee, towns and cities have an incentive to rehire a retiree as a part-timer in order to avoid paying benefits, including pension payments.

It's a quandary that has long frustrated lawmakers here and in other states, but it's unproven whether the state would see significant savings to its retirement system by taking action to stop it.

The only thing that appears certain, Rep. Ken Hawkins said yesterday, is the public doesn't like it.

"It's a perception problem and a fiscal problem," said Hawkins, chairman of the special House committee on pension reform for public employees. "The part-timer is coming in and taking someone's job that would be contributing to the retirement system. That money is not coming into the system, and it's being paid out."

Rep. Neal Kurk, a Weare Republican, said double-dipping raises a question of fairness.

"When somebody retires, the assumption is that he's gone off into the sunset and is not working," Kurk said. "It's important that people retire so there are jobs available for people who are fresh out of college."

Kurk said one idea might be to set an hourly limit for part-time public employees instead of allowing retirees to work nearly full-time hours.

Rep. Seth Cohn, a Republican from Canterbury, proposed requiring public employers and employees to start paying into the pension system for part-time positions.

"One possible solution is, 'Well, let them start contributing,' " Cohn said.

Kurk said he disagrees with adding to the tax burden of municipalities.

Rep. Jim Waddell, a Republican from Hampton, said lawmakers should be wary of a mind-set that all cities and towns are hiring retirees on a part-time basis to save money on benefits and pension costs.

Sometimes it might just be practical, such as hiring former police officers to work a Fourth of July detail, he said.

"It's an extremely complicated issue that we have to look at in a detailed manner," he said.

The state's restriction on public sector retirees returning to full-time public sector jobs only applies in New Hampshire. Retirees on a New Hampshire pension can cross the border to work full time for a state or municipality.

"It seems a little crazy that we can have New Hampshire going to Massachusetts and Massachusetts going to New Hampshire with no restrictions, but we can't have the same people in the same states," said Rep. Spec Bowers, a Republican from Georges Mills. "It doesn't make a lot of sense."

Bowers said he wasn't convinced the committee should address a perceived double-dipping problem without hard numbers showing it is a significant issue.

Marty Karlon, spokesman for the New Hampshire Retirement System, said he is unsure if double-dipping is a significant drain on the system because he isn't aware of data on the number of part-time retirees working at the state and local level.

"Again, I still don't see the problem we're trying to solve," Bowers said. "It's a perception problem, but that's all I see so far."

But Hawkins said that at some point legislators must act.

Another work session on pension system reform is scheduled for Thursday as the committee agreed to seek more information.

"I have seen historically that waiting and waiting and kicking down the road does not solve a problem," Hawkins said. "It just entails these sort of discussions for eight more, 10 more meetings with somebody finally saying, 'Let's bite the bullet and do this.' "

(Matthew Spolar can be reached at 369-3309 or mspolar@cmonitor.com.)


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