A legislative committee hears testimony on two bills aimed at eliminating double dipping. The controversial, but completely legal, practice involves a government worker retiring and then returning to that same job … earning wages while continuing to collect their pensions.
Don Nelson at UW Madison explains how retired professors are asked to return on a temporary basis. “In a community as small as Stevens Point it would be impossible to find qualified instructors for these short term teaching assignments without turning to our retired faculty.”
Representative Travis Tranel (R-Cuba City) says if an individual retires and collects a pension, somebody will have to be paid a salary to fill that position — a retired worker might be cheaper because the new hire would receive new benefits. However, Shawn Smith of the Wisconsin Department of Employee Trust Funds explains it’s important for the long-term health of the Wisconsin Retirement System to have new employees replace those who retire. “The WRS is a maturing system that continues to rely on the investment earnings of revenues to keep it solvent. If contributions start to decline, our shared-risk system is such that there could be upward pressure on contribution rates to make up the difference.”
Smith also stresses the importance of continued public confidence in the integrity of the system and its policies. Currently there must be a 30 day waiting period before the individual can return to their old job. One bill seeks to increase that waiting period to 180 days.
The Assembly Committee on Insurance held a public hearing on Thursday.
AUDIO: Jackie Johnson report 1:48
AUDIO: Shawn Smith of the Wisconsin Department of Employee Trust Funds says the longterm health of the system depends on new employees to replace retiring workers. Representative Terese Burceau (D-Madison) clarifies that point, saying the state needs more limited time employees paying into the retirement system. (:21 mp3)