Wis. Legislation Would Restrict Rehired Retirees from Receiving Pensions

Legislation under consideration in Wisconsin would prohibit retired public workers who are rehired from collecting their pension along with a paycheck.
by | November 18, 2011

Wisconsin state legislators are considering two bills that would limit so-called "double dipping" -- when a public employee retires and is rehired, thus receiving both a pension and a paycheck simultaneously, the Green Bay Press-Gazette reports.

One bill, which would apply to rehired workers working half-time or more, would prevent those employees from receiving a pension while at their new job, according to the newspaper. The other would also prohibit rehired workers from collecting a pension, while also extending the time period for being rehired from 30 days after retirement to six months and requiring those rehired full-time to contribute to the state's retirement system.

According to the state Department of Employee Trust Funds, 6,800 retired state employees had notified the department that they had been rehired from 2005 to August 2011. But one of the bill's authors, state Rep. Bob Ziegelbauer, told the Press-Gazette that he's not sure if recent recall efforts against state lawmakers and Gov. Scott Walker might temper enthusiasm to pass such legislation.

"We're in a real strange time right now in the Legislature where this recall business is really going to have an impact on the state Senate, and anything that seems very controversial may get pushed to the side," Ziegelbauer said. "I don't know if this bill fits that category or not."

Regardless, some said state legislators were overstating the problem. Miles Turner, executive director of the Wisconsin Association of School District Administrators, told the Press-Gazette that because the pension system is a "money in, money out" system, retired workers are merely taking out the money that they had already earned. In some cases, he said, they saved school districts money because they had been rehired at a base wage and the district was no longer contributing to their retirement fund.

Presently, Employee Trust Funds spokeswoman Shawn Smith confirmed during a legislative hearing that the state's retirement system is financially solvent, and only about 1 percent of the state workforce consists of rehired employees. But if that percentage increased to 10 percent, for example, there could be consequences.

"The loss of employer and employee contributions at that point could start to matter," Smith testified, according to the newspaper.

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