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Some state retirees rake in pensions and paychecks

Thousands who have returned to public service in California, including eight legislators, receive their retirement benefits and a salary. The practice has raised concerns.

October 09, 2009|Patrick McGreevy

SACRAMENTO — As California's public retirement funds reel from losses of nearly $100 billion in recent years and lack enough cash to cover their long-term costs, thousands of state employees are collecting government pension checks along with their paychecks.

John Benoit, a Republican state senator from Palm Desert and a former California Highway Patrol captain, is one. He draws a $98,600 annual state pension while also collecting a six-figure salary as a lawmaker.

David Turner retired as a state fire chief in 2004, went back to work for the state firefighting agency two days later and is still employed there. He collected $65,229 in salary in the last fiscal year in addition to a state pension of $105,000.

Paul W. Anderson is a psychiatrist at Napa State Hospital who retired two years ago from the state Department of Mental Health. His pension is $117,840. He also received $104,200 in state wages in the last fiscal year.

State records show that more than 5,600 others are drawing double checks, a figure 57% higher than a decade ago. Meanwhile, billions of dollars -- $3.3 billion in this fiscal year alone -- are being siphoned from the state budget to cover pension system expenses.

The California Public Employees' Retirement System and California State Teachers' Retirement System combined lost about $98 billion -- nearly a quarter of their value -- after their investments were battered in the real estate and stock markets over the last two years.

CalPERS is under additional strain from enhancements approved by lawmakers a decade ago that allow most state employees to retire at 55 instead of 60 and public-safety workers at 50.

"The notion is we have retirement systems so once people stop working they are provided for," said Alicia H. Munnell, director of the Center for Retirement Research at Boston College. "It seems just not acceptable to taxpayers that people are earning a salary and a retirement check."

The practice is not illegal. Most of those getting both salary and pension are designated by the state as "retired annuitants" limited to working 960 hours a year, about half-time. Legislators are different; they work full-time.

Hiring pensioners can be a bargain, proponents say, largely because their healthcare is already covered by their retirement plan.

"It's really good for the state, because they don't have to pay benefits," said Anderson, 79.

Turner, who was 53 when he retired from the Department of Forestry and Fire Protection, was brought back to help bridge a gap in administrative staff, according to Daniel Berlant, a spokesman for the agency.

"We have a lot of people retiring and we brought him back for his institutional knowledge while we continue to fill some vacancies," Berlant said.

Benoit, who retired at age 50 seven years ago, is a member of the state Senate Public Employment and Retirement Committee. He said he had no comment.

Some states bar workers from returning to service for six months or even a year after they retire, according to the National Assn. of State Retirement Administrators.

Michigan employees forfeit their retirement checks when they go back on the state payroll. And in Massachusetts, a blue-ribbon panel chaired by Munnell has proposed restricting how soon teachers can return to the public payroll after retirement and limiting the number of hours they can work if they do.

In California, Gov. Arnold Schwarzenegger has proposed moving the age when CHP officers, firefighters and police officers can retire with maximum payments back to 55 and the retirement age for other state workers back to 60.

"People are living longer and healthier," said David Crane, the governor's chief economic advisor. "People are working longer in the rest of the population."

Some lawmakers agree that it may be time for the state to rethink retirement ages for its workforce, reasoning that there would be fewer retirees on the payroll if workers had to wait until they were truly ready to leave state employment before they started collecting a pension.

"You have this incentive for retiring early. It's a little disturbing," said Sen. Denise Ducheny (D-San Diego). "If you can take retirement at 50 and still work, why wait?"

But the governor's ideas have gained little traction in the Legislature, which is under pressure from public employee unions -- some of California's biggest political donors -- to preserve generous retirement benefits. And government retirement records show that at least eight lawmakers are benefiting from the status quo, receiving public pensions in addition to their legislative salaries and about $35,000 a year in per diem expenses.

Assemblyman Joe Coto (D-San Jose) is a former school superintendent whose government pension is $178,000. Combined with his $116,000 legislative pay, Coto takes in $294,000 per year.

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