Double dippers: 2,400 state workers collect paycheck and pension, but is it a problem?

Maine State House (WGME photo)

STATWIDE (WGME) -- Thousands of retired public employees are back at work, collecting both a paycheck and a pension.

It's not illegal, but the practice known as "double dipping" is often criticized as the state's pension system is billions of dollars underfunded.

In 2013, Governor LePage called double dipping "unconscionable" and "absolutely disgusting."

Public pensions are complicated and easily misunderstood. Experts say while double dipping has the potential to negatively effect the state's pension system, it can also save taxpayers money.

RSU Superintendent Rick Lyons agreed to talk with us about his situation of retiring and then being re-hired in the same school district.

Three years ago, after 24 years as superintendent of RSU 22, he retired. Instead of choosing to leave for good, he came back 30 days later.

"Double dipping is a phrase that may be accurate and true, but on the other hand I've earned the retirement benefit and now I'm earning the compensation afforded to me by RSU 22," Lyons said.

State records show Lyons is the state's top double dipper based on total earnings in fiscal year 2018. He's getting both a pension and a paycheck and earned nearly $245,000.

Those records, requested and reviewed by the I-Team, show about 2,400 other public employees are also double dipping.

The top 10 average about $200,000 a year.

"There's no impropriety associated with that," Lyons said.

In fact, Lyons is proud of it. A change to state law in 2011 says retirees can only receive 75% of the salary for the position.

"I was making $165,000. I went to $124,000," Lyons said while illustrating the savings on a white board in his office.

According to his calculation, the school district will save more than $200,000 in salary alone during the five years he plans to work.

"You have continuity in leadership, your superintendent has been here over two decades, and you're saving a quarter million dollars. That's a win-win-win all around," Lyons said.

Proposed legislation has aimed to make double dipping illegal, including a bill this year from Rep. Heidi Sampson (R-District 21).

"The idea of double dipping and the folks upset about it raised concern to me," Sampson said.

Sampson said the governor asked her to submit the bill, but after a public hearing this year, Sampson said she changed her view on it.

"Does this impact the state financially? And the conclusion was not really. By and large, I think people are just working; they are doing what they can to survive," Sampson said.

Sandy Matheson is the executive director of MainePERS, the Maine Public Employees Retirement System.

When asked if double dipping burdens the pension system, she said it depends on how broad the practice is.

She said right now it's not an issue, but it could be as the state works to pay off the unfunded portion of the pension fund, which was $2.6 billion at end of this fiscal year, ending June 30.

"If it becomes really widespread then you don't have the same number of people over which to spread the unfunded liability," Matheson explained.

Rehired retirees don't pay into the system anymore, which is the concern from the governor's office, the Department of Administrative and Financial Services, and the conservative Maine Heritage Policy Center. All say re-hiring retirees weakens the health of the system.

"Unfortunately when these employees are re-hired, they don't contribute back in because they don't have to, and that's probably something we should look at," said Terry Brown with MHPC.

Matheson says she she keeps an eye on the number of public employees earning a pension and a paycheck.

"When we see a substantial increase from year to year we would start to get alarmed and alert the legislature," Matheson said.

For now she says things are headed in the right direction. The state retirement plan is now funded at 81%. That's up from just 22% in the 80s.

"Currently everything is being managed very effectively and Maine has been able to stay ahead of the curve," Matheson said.

States have various laws on double dipping. Some allow it and others don't.

Even with the practice of double dipping, multiple reports show Maine has one of the healthiest pension systems in the country.

close video ad
Unmutetoggle ad audio on off