Sunshine Week: New Hampshire Retirement System tracking pensioners who return to work in government jobs

Monitor staff
Sunday, March 20, 2016
Out of 26,000 retirees collecting pensions from the state, just under 10 percent – about 2,350 – are still working for a government employer.

In Concord and the immediate surrounding towns, there are about 375 people who are simultaneously collecting a pension from the New Hampshire Retirement System and a paycheck from a municipality or school district, according to public data collected at the end of last year by the retirement system. And about a quarter of all returning employees – 626 – work for state government.

Until about two years ago, no one knew for sure how many so-called “double dippers” there were in the state, meaning discussions to reform the practice relied heavily on anecdotes. That changed after House Bill 432 passed in 2013, requiring government employers to report the name, compensation and hours worked for all employees who are collecting pensions from the retirement system.

The workers on the list range from someone putting in a few hours at the library to those in top jobs like superintendent, town administrator and police chief.

“Eight hours a week in the library and 32 hours a week as a police chief are two different kinds of animals. This, to me, is double dipping,” state Rep. Neal Kurk said of the latter category.

On an individual level, the practice can be attractive for the employee and the municipality, but it means one fewer person is paying into the retirement system and contributing to its $4.2 billion unfunded liability. In other words, when a town loses its full-time police chief and replaces him with a 32-hour-a-week retired part-timer, it’s eliminating a position that otherwise would contribute to the retirement system, forcing others to pay more to cover the liability.

The financial benefit to these employees can be significant. For example, a retired police chief never pays the 11.55 percent of his salary into the retirement system, while simultaneously getting a big pay boost from collecting a salary on top of a pension, which could have been earned in as little as 20 years. Meanwhile, the town avoids paying its share to the retirement system – 26 percent of the chief’s salary in this case – and gets a highly qualified officer for a lower-than-average price.

“They think it’s the cat’s meow,” Kurk, a Weare Republican, said.

Take the police chief in Weare, for example. Last year, the town replaced its full-time chief with a part-time chief when promoting retiree Sean Kelly. His starting salary was $78,000 on top of his $54,571 pension. At the time, town officials boasted they would save between $15,000 and $28,000 on the health and retirement benefits Kelly would receive from the retirement system.

And it’s all perfectly legal as long as part-time workers don’t work too many hours. Admittedly, though, the retirement system relies on the honor system to know who is flouting the rules.

A spokesman for the retirement system, Marty Karlon, said retirees returning to government work represents a small fraction of employees compared to those still paying into the system. And, he said, among the retirees who have returned to work, the category of odd-hours-at-the-library workers outnumber the retirees who hold top jobs.

“They’re high profile positions, so people look at it, but those are a very limited number of jobs,” he said. “They’re a small percentage of the total retirees working.”

Still, they include some of the highest-ranking officials in the state, such as State Police Col. Robert Quinn and Department of Corrections Commissioner William Wrenn. Quinn, for instance, retired as a captain of the state police to become the division’s director. Between his pension and salary, he was paid more than $210,000 last year. Wrenn earned more than $218,000 between his salary and pension.

Quinn’s position is a special case, like Wrenn’s, which allows him to work more than the typical 32-hour maximum, because he’s appointed by the governor.

Kurk said the law used to allow any retiree to take another full-time government job, which he found to be “egregious,” until the Legislature acted. 

Each time a full-time job is lost to a part-time retiree, the retirement system bleeds a little faster. The system’s $4.2 billion shortfall is the result of bad returns on investments and years of faulty policy and accounting, which will be made up by taxpayers in the form of increased contributions to the retirement system from cities, schools and towns.

Although the political opposition is typically strong, Kurk said there’s still some political will to reform the retirement system – both inside and outside the issue of double-dipping.

“The reason why people are offended by this – and this is the fault of the pension system to some point – was the idea of a pension was you were finished working. . . . What we ought to say is if you want a pension, you’ve got to retire, you have to stop working,” he said.

A decennial retirement commission will reconvene next year – 10 years after reforms were passed in 2007 – to study the viability of the retirement system. Kurk said this group, however, is “only charged with working within the current pension system.”

“We’ve got a system that can only be changed by literally changing the system,” he said.

(Nick Reid can be reached at 369-3325 or or on Twitter @NickBReid.)

For a searchable database of pensioners in the New Hampshire Retirement System click here.

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