Naperville considers pension double-dipping transparency reform
Most public employees in Illinois receive a single pension upon retirement. But some workers don’t just get one pension – they get two or three. This is made possible by either working multiple government jobs at the same time, or retiring from one public job and beginning a second within a different pension system. Both...
Most public employees in Illinois receive a single pension upon retirement.
But some workers don’t just get one pension – they get two or three.
This is made possible by either working multiple government jobs at the same time, or retiring from one public job and beginning a second within a different pension system. Both are examples of pension “double-dipping.”
Unfortunately, this happens all too often in Illinois.
A Chicago Sun-Times editorial explains:
“Dick Simpson, a political science professor at the University of Illinois at Chicago, said it’s ‘not an uncommon practice’ among local governments to put people in new jobs that significantly boost their total pension income — good for them but bad for the taxpayer.”
“Usually you get vested in a pension after 20 years — sometimes faster — and once you are vested you can’t get a higher percentage of your salary as a pension,” Simpson said. “If you go to work for another agency, and maybe work there five years, you can get 40 or 50 percent of your new salary added to your 80 percent from your earlier job.”
One reason why pension double-dipping is a big problem in Illinois is because state and local pensions allow for unusually early retirements in comparison to the private sector. This causes a strain on state and local government finances.
For example, employees in the Teachers’ Retirement System can retire at 55 with 35 years of service credit, and employees in the Illinois Municipal Retirement fund can retire at 60 with 35 years of service with full pension benefits. This compares to Social Security’s 67 for people born after 1960.
Public employees who begin collecting pensions a decade -or more- earlier than the average citizen has time to start a second public career and earn a second pension.
But the city of Naperville has recently introduced a new ordinance that addresses the transparency of double-dipping deals.
“Under a proposal that recently had its first reading, the suburb’s city council would have to sign off before any retired city public safety officer who is collecting a pension could be hired for a different city job where he or she could start collecting credits for a second public pension — an easily abused practice called “double-dipping.”
“The Naperville ordinance wouldn’t bar the city from hiring a qualified applicant who just happens to be retired, but it would ensure greater oversight over any such double-dipping to make sure a thorough job search has been conducted, the best person is being hired, and it’s not all a clubby insider’s game.”
While this proposal doesn’t completely prevent double-dipping from happening, it does address potentially unfair hiring practices detrimental to public safety and taxpayers.
This additional level of oversight is a welcome idea to confront the issue of double-dipping pension abuse.