Sunshine Week: Bill targeting retirement system double-dipper ‘gimmicks’ on to Senate

  • The State House dome as seen on March 5, 2016. (ELIZABETH FRANTZ / Monitor staff) ELIZABETH FRANTZ

Monitor staff
Thursday, March 16, 2017

A bill that seeks to dissuade cities and towns from hiring retired part-timers to fill positions previously held by full-timers has passed the House of Representatives and is on its way to the state Senate.

The chairman of the New Hampshire Retirement Security Coalition, firefighter Bill McQuillen, said public employees are tired of seeing public safety heads “retiring on Friday and coming back to work on Monday” in the same job without adding back in to the retirement system.

“Cities and towns have used gimmicks to skirt their debts and employer obligations for far too long,” said McQuillen, who is also president of the state firefighters union.

House Bill 561 is a good step to help address the retirement system’s multibillion dollar unfunded liability, McQuillen said in a statement.

In recent years, some municipalities have chosen to save themselves money by hiring pensioners on a part-time basis to fill positions that were formerly full time. In these cases, the city or town doesn’t have to pay a share of the worker’s salary into the retirement system, and the worker continues to collect his pension on top of his part-time salary.

More than 9 percent of pensioners go back to work for retirement system employers statewide. This practice is known as “double-dipping,” because the workers simultaneously collect a pension and a paycheck from the government.

But under HB 561, retirement system employers would be required to make contributions based on the system’s unfunded accrued liability – or the gap between the benefits it promised and its cash on hand – “for certain full-time positions changed to part-time or interim employment,” according to the bill.

That payment would range between 9 percent and 21 percent of the employee’s salary, depending on the job, said the bill’s author, Rep. Neal Kurk, at a committee hearing in January.

Additionally, the bill allows the retirement system “to suspend a member’s retirement allowance and assess a penalty on a retirement system employer for exceeding the limitations for part-time employment.”

The retirement system’s spokesman, Marty Karlon, said in January that hourly limitations are maintained through the “honor system” and rarely result in any kind of penalty.

Until two years ago, no one was keeping track of how much money double-dippers were earning. A few high-profile cases drew press coverage, especially when towns filled formerly full-time positions with part-time retirees. But the overall accounting was unavailable until the Legislature ordered government employers to file monthly reports naming their double-dippers and the amounts they earned in 2013.

The most recently released data – although unaudited – attempts to define how many hours retirees are working and how much they’re being paid. But there are clear inaccuracies, including a teacher who reportedly made $30 million working 306 hours, and the data still relies on self-reported hours.

For instance, part-time Weare police Chief Sean Kelly, who took over a full-time position, reported that he worked 32 hours – the maximum allowed – every week in 2016. The same goes for part-time Canterbury Chief Michael Labrecque, who replaced a full-timer in August the same day he retired as a Hooksett lieutenant.

The bill passed the House on a voice vote March 8. It will next be heard by the Senate’s Executive Departments and Administration Committee.