During these times of distress, we’re hearing a lot about government executives finding ways to milk the public out of taxpayer funds with their high salaries and pensions. One particularly bad abuse is the double dip pension. Keep in mind that most instances of double dipping are perfectly legal. However, we’ll go over the not-so-legal version first.
When you retire from CalPERS, you must separate employment from all employers that participate in the CalPERS pension. That means a retiree can’t work for the state, counties with CalPERS, and cities with CalPERS. However, there is a loophole for this.
You can work up to 960 hours without being forced to pay back CalPERS for an improper retirement. The way it works for an executive is that he will retire within a few weeks. In the meantime, his buddies in management will give him a contract at $125/hr or some other outrageous amount so that they have “more time to look for a suitable successor” even though there are many underlings who are perfectly capable of doing the job for six months on a temporary basis. Then the executive will get $125/hr plus the monthly pension. He can keep this up for up to the 960 hour limit. In this example, the taxpayer will pay up to $120,000 extra to keep the incumbent via a contract. That $120,000 could be used to feed a lot of homeless people, restore library hours, restore the swim program, or a lot of other basic needs that have already been cut. During these tough times, shouldn’t these contracts not be allowed by executive management? Or are they the real enemy of the taxpayer?
The other, but completely legal way to double dip the pension is to work for a non-CalPERS employer. There are many employers that don’t participate in PERS. For example, you can look for a job in the University of California since they have their own pension system. Or you can work anywhere in the private sector. If you’ve helped the private sector early in your career, perhaps they can give you a nice job after you retire. And you’ll still be able to collect a retirement benefit at the same time. Nothing can be done to stop this. The pension is a benefit that has already been incurred and must be paid. However, the same is not true with the first example where the executive got a $125/hour contract. The contract itself was not needed. The executives should have appointed someone who is still an employee to fill that position on a temporary basis instead of contracting out.