The point is that nobody is government is going to do this because it will kill their election chances. Plus they are effectively reducing their own pay.
I took a 50% paycut to work for the state for 3 reasons: - 8hrs/day, 40 hrs week max, I enjoy life out of work. I was sick of 80 hour weeks - job security. thats gone at the state of Texas, and has been for at least 5+ yrs. At least the agency I have been with. I think I'm safe but I'm still worried at times. This legislative session is going to be brutal and there will at least be a lot of furloughs (although thats golf days for me ). - pension. I can retire about 11 yrs from now. A few years ago I decided to stick it out instead of moving back to the corporate world. you guys better pay up Its funny how when economic times are good people rag on gov employees but when times are bad they think they have it great. Texas has changed the retirement system to where no new young people will want to have a full career, its not worth it. It will only get worse oh yeah, our medical insurance sucks now. medicaid is probably better. My wifes (corporate) blows ours away. that gov benefit generalization isn't true anymore (except for Feds)
I don't agree with all this article has to say but most of it is spot on. Many agencies are not able to hold open a position for someone as long as the 90 days required... State Employees Retire, Come Back to Work by Emily Ramshaw, November 23, 2009 No snowbirds here. A mounting number of state employees are retiring from work then getting rehired to the same jobs, padding — and in some cases nearly doubling — their state salaries with pension checks. Since lawmakers loosened restrictions on the practice a decade ago, the number of retirees returning to state jobs has grown by more than 1,300 percent, from 400 in 1999 to 6,200 this year. The tactic is used, albeit quietly, for employee retention. It helps agencies keep and reward experienced but underpaid workers like prison guards and nurses’ aides, who might otherwise leave when they reach retirement age. And while it’s mostly employees in low-paying jobs benefitting from the practice, retirement-eligible state employees making more than a hundred thousand dollars a year are also quitting and coming right back to work. Sometimes they return to other jobs; often they're rehired for the same post they left. “Some people feel like they’re double dippers, that they’re taking up a position somebody else could advance to. Others think it’s a great opportunity,” said Mike Gross, coordinator with the Texas State Employees Union, which has not taken a stance on return-to-work retirement. “While it’s a good deal for the agencies, it’s clearly a negative for the [Employees Retirement System] fund.” Under Texas’ return to work policy, a state employee who retires can be rehired after a 90-day hiatus. In addition to their salary, they receive pension pay-outs averaging $2,000 a month, and continue to get health benefits. Employees Retirement System (ERS) rules say retiring employees can’t be given a “promise of employment” when they leave — and must certify that they don’t have another job with the state lined up. But state workers say these rules are rarely followed, and that gentlemen’s agreements abound. Advocates of the practice say it’s a good deal for the state. Rehiring retired employees avoids costly training. It saves the state from paying a new employee’s insurance premium. And it allows agencies already struggling with recruitment to keep their tenured employees in place, without losing them to higher paying private sector jobs. But watchdogs say employees with low pay shouldn’t be forced to “retire” in order to work at a livable wage. Seventy percent of return-to-work employees make under $50,000 a year. And they say the tactic is increasingly being used to give raises to already well-paid agency executives. Right now, 120 return-to-work retirees make more than $100,000 in base pay alone; one makes more than $200,000. “It looks like a Mickey Mouse accounting scheme,” said Andrew Wheat, a researcher with Texans for Public Justice, an organization that tracks money in state government. “It’s just another way for agencies to hide the real cost of their employees’ salaries, at the expense of actual state retirees.” Lawmakers have gone back and forth on “return to work” since they first instituted it in 1951. At that time, retirees who wanted their jobs back had to have their pension payments suspended first. By 1981, retirees who returned to work received partial payments. And in 2001, the restrictions were lifted all together. In the last legislative session, lawmakers backtracked slightly, forcing retirees to take 90 days off before returning to work, and requiring the hiring agency to contribute to the ERS on behalf of the returning employee. The changes have helped agencies struggling with retention. Currently, about 5 percent of workers at the Department of Public Safety, the Department of State Health Services and the Department of Assistive and Rehabilitative Services are state retirees. But it’s also been a boon for higher paid employees. At the Health and Human Services Commission, the agency’s chief of staff and deputy executive director — both of whom make about $150,000 a year — are “return-to-work.” In general, rehiring retired employees “is a negative experience for the actuarial soundness of the retirement fund,” said Rep. Vicki Truitt, R-Southlake. “But all sorts of things have been done over the years to adjust for the health of the fund, or how critical the need is to retain employees.” http://www.texastribune.org/texas-s...tem/state-employees-retire-come-back-to-work/
The retirement has been earned. The state employee is rehired after 3 months because they have decades of experience, often in highly skilled management positions. There is no "second pension." I'll add that Major's sweeping statement that all defined benefit retirement plans are going to go bankrupt simply isn't true. The Employees Retirement System of Texas is on solid ground. I can't speak to the teachers retirement system.
As a state employee eligible to retire in 3 years (at age 54) I am thankful. Despite what many believe about public sector employees, I earned it. I passed on higher paying private sector jobs because it was my way of contributing to society and government. I don't just spout political on a bbs, it is my career. I look forward to returning to government service in some capacity to supplement my retirement income.
I agree that double dipping should be banned. To me thats just bad mgt and planning if you really need to bring that person back. you should have been ready. also, it sends a bad message to the younger workers and inhibits the natural course of change (usually its the dinosaurs trying to keep their turf bringing back people). the same thing happens at corporations, so don't act like its only gov. My FIL was on a crusade to rid it of a fortune 50 company right before he retired a few years ago. I don't blame anyone for double dipping and taking advantage though. they earned that pension - start collecting.
Unless I'm mistaken, ERS - like other government agencies - uses a projected 8% rate of return on their assets to come up with the idea that they are fiscally sound. But the reality is that they can't generate the required 8% rates of return consistently (they've generated 4% annually over the last decade, as an example), and that means it ultimately will have to be bailed out or it will implode. The government fixed this for corporations several years back by not allowing them to project that high a rate of return on their DBPs - but they let government continue to do so for no good reason. As a result, corporate DBP's are actually healthier now than government ones. There are really only three solutions: 1. Lower the projected rate of return dramatically; but then all the plans will be listed as unsound right now, so no one will do this. 2. Switch future employees to defined contribution plans and phase out the DBPs. 3. Hope and pray for the impossibility that they will actually generate an unrealistic rate of return. Here's a recent article discussing the topic: http://www.cnbc.com/id/39945561/US_Public_Pensions_Face_Day_of_Reckoning A blurb: But Gasb left essentially untouched the method by which governmental plans value their liabilities – based on actuarial assumptions for asset returns, rather than a discount rate that reflects the near certainty that pension obligations will have to be paid. Most government plans assume an 8 percent rate of return on investment; corporate plans, by contrast, are required to value liabilities at a high-grade corporate bond rate, currently below 5 percent. (The Gasb proposal would, however, require the portion of public plans’ liabilities that are chronically underfunded to be valued at municipal bond rates – currently between 3.5 and 4 percent.) “State and local governments are being granted a special privilege, to use discount rates that understate the true economic value of their liabilities,” says Joshua Rauh, associate professor of finance at the Kellogg School of Management, Northwestern University, and a pensions scholar. “The discount rate should reflect the certainty that the governments will have to pay them, and that is certainly no less risky than the rate on a state or local government bond.” Under both current and proposed rules, Prof Rauh explains, the value of the liability is based on the risk a pension plan takes with its assets, when the two rates are in fact independent. In a recent paper written with Robert Novy-Marx, associate professor at the University of Rochester, Prof Rauh estimates that state pension plan liabilities alone, valued at treasury bond rates, came to $5,000 billion as of June 2009, while assets were just $1,940 billion. “This ‘pension debt’ dwarfs the states’ publicly traded debt of $940 billion,” he writes. City pension plans, he estimates, add another $383 billion aggregate underfunding.
The general public just doesn't realize how many state employees worked for quite a bit less than they could have made in the private sector. Two of the main reasons? A real desire for public service and generous benefits that helped to offset the lower salary.
But the benefits aren't that good anymore. My wife works for Dell (and before that law firms) and their benefits blow ours away. Its a Myth, so is job security
No, they aren't what they once were, but still beat the hell out of most of the private sector, IMO. Not all companies are like Dell, which is rated very high as a place to work. At least I think I read that someplace. The hit the benefits have taken will lose the state some valuable employees.
I always think it is funny to see military personnel retire at 40 and then accept an identical job at a much higher salary as a civil servant. Its smart on their part, but seems such a waste by the government.
This is true. ALL of my benefits, aside from the pension, are worse than what I had in the private sector. Insurance, 401K, vacation, etc. Well, they do have a 401K fund you can invest in that is backed by the gov and guaranteed not to lose $$, but it doesn't make much either. It would have been a perfect vehicle for old employees when the market was crashing though, to ensure they kept what they built.*
Social Security is the most successful social program in American history and will not be ended until we can agree on a way to encourage ALL Americans to begin saving for their own retirement. I suggest raising taxes on the ultra wealthy to the point that employers begin paying their people enough to save rather than cashing out with golden parachutes, stock option lotteries, and short term accounting tricks.
A waste how? They put in 20 years defending the country. I'd say they deserve to have any sort of private, or government job that they are qualified to do and have a desire to invest their time in.
Sometimes you have to retire. For hardcore firefighting positions, the mandatory age is 55. A number of folks leave Federal service at 55 and then go work for a state fire agency for 10 or 15 years and get a little pension there as well after they really retire. On the military side, I don't know what the specific stop-loss rules are, but if you are at any risk of getting called back, I don't begrudge folks for double-dipping. I do think it is bad that so many go to work for a weapons company or defense contractor that they had dealings with when working for Uncle.
What a bunch of pansies!! They should have to fight fires on the front lines till they are 69. Signed, A young libertarian and supporter of the deficit reduction committee.
Actually it's: They should've worked on their 401ks to retire at 55. In fact...why are they even patronizing the socialized beast by agreeing to lower wages?? Are they not rational and intelligent sociopaths??
