High unemployment reduces ranks of double dippers

LAS VEGAS REVIEW-JOURNAL CAPITAL BUREAU

CARSON CITY -- High unemployment and a change in state law have dramatically reduced the number of retired public employees who can "double dip," or return to work and draw salaries while collecting their Public Employees Retirement System pensions.

Just 17 retired employees have returned to work since July when the new law went into effect.

The law requires school districts, the state and local governments to hold public hearings before they can rehire former employees.

They also must make written findings that the jobs the retirees will take are in areas of "extreme need" and other people cannot be found to fill them.

This is a big change for a re-employment program that started off in 2001 with controversy and led over the next eight years to 661 retired employees reclaiming jobs and drawing pay while receiving pensions, too.

Currently 348 people who were hired under the 2001 law were still working as of July 1. On the average, retired employees have worked slightly less than two years before retiring permanently.

The cost of paying retirement benefits to these people while they continued to work has been estimated to be at least $55 million.

The furor over rehiring retired employees began in July 2001 when former Washoe County Sheriff Richard Kirkland threatened to quit his $103,000-a-year job as director of the state Department of Public Safety.

As a condition of keeping the job, Kirkland demanded that he should be permitted to draw the $70,000 pension he earned through a 36-year police career.

He got his wish.

So did his deputy director, several Nevada Highway Patrol officers and even a member of the State Parole Commission. They were all authorized by the state Board of Examiners to double dip.

But then Assemblyman Doug Bache, whose committee processed the bill that allowed double dipping, contended Kirkland and others were abusing a program designed to put retired teachers back to work in areas where schools could not find qualified replacements.

Bache said the bill never was meant to "reward high-ranking, well-paid administrators in state government."

Under language in the enabling bill, however, local governments and the state also were permitted to re-employ retired people in "areas of critical labor shortages."

Assemblywoman Bonnie Parnell, D-Carson City, last year sponsored Assembly Bill 488, the new law that requires school districts and other governments to hold public meetings if they choose to rehire retired employees.

The new law allows the re-employment program to continue to 2015 and mandates PERS to prepare a report in 2014 on its costs to pay retirement to rehired workers.

"Kirkland's hiring left a sour taste in everyone's month," Parnell said. "Initially there was a lot of good ol' boy hiring. I am pleased we required them to have to act in an open meeting."

A retired teacher, Parnell said it is vital for schools to have the option to rehire retirees in fields where there clearly are not enough teachers to meet the demand.

Specifically, she said there are shortages of people qualified to teach math, science, special education or serve as counselors.

State Superintendent of Public Instruction Keith Rheault said the state's high unemployment, coupled with the decline in school enrollment, has reduced the need to hire retired teachers.

With layoffs of teachers in Nevada and other states, he said it makes no sense to re-employ a retired teacher when younger, qualified teachers who need the jobs can be found.

Despite the early problems, the re-employment program largely has met Bache's objective. Ninety percent of those rehired between July 2001 and June 30, 2009, were teachers or people involved in education.

During the 2009 legislative session, Clark County School District Associate Superintendent Joyce Haldeman testified her district had re-employed 48 math, 16 science, 73 special education and 18 speech teachers, along with 23 school counselors.

Even with the rehires, Haldeman noted the school district at that time still faced 65 math, 196 special education and 78 science teacher vacancies.

In checking the rehire list in January, legislators questioned a couple of areas.

For example, the Washoe County School District has rehired 36 people to serve as "substitute teachers." Six other retirees have been hired by the school district to work as "bus drivers."

Tom Stauss, director of human resources for the school district, said the people hired as substitute teachers are retired teachers. He said his district has had problems finding qualified substitutes.

Unlike other retirees rehired to full-time teaching jobs, these substitute teachers cannot receive additional pension benefits by continuing to work, according to Stauss. They receive $85 a day in pay. Like everyone else, they collect their pensions during the time they work as substitutes.

Neither the city of Las Vegas nor Clark County government has ever used the law to rehire a retired employee.

Rheault said that in rural areas, in particular, it is difficult to find bus drivers, who might have 75-mile-a-day routes.

Bus drivers also work a split shift, often starting at 6 a.m., working three hours, then waiting around for five or more hours for school to end before taking children home late in the afternoon.

Washoe County has had a difficult time finding bus drivers in rural communities such as Gerlach, Rheault said.

Until Parnell's law went into effect, Rheault approved all requests from school districts to rehire retired teachers and other school employees.

State Sen. Bob Coffin, D-Las Vegas, initially opposed Parnell's bill, which passed unanimously. He was concerned that it had cost PERS $55 million to pay pensions to the rehired employees.

Coffin said having to rehire retired employees spoke to the lack of management skills by school districts or local governments, which should have trained employees waiting to fill the jobs of people retiring.

PERS Executive Officer Dana Bilyeu said her board took a neutral stance on Parnell's legislation.

George Pyne, then PERS executive officer, had proposed the original re-employment bill in 2001, saying local governments and schools wanted the legislation because they were having trouble filling positions at a time when there were labor shortages.

"We were trying to help the public in the long run with better public servants," Pyne said at the time.

PERS had surveyed other public pension plans and found that Texas and other states had implemented provisions to allow the rehiring of retired employees.

While it seems there would be no additional cost to PERS if a retired person returned to work and drew a pension that they would receive anyway, Bilyeu said that is not the case.

Not having to pay pensions to working retirees is a built-in cost containment feature that appeals to PERS actuaries, said Bilyeu, who thinks the $55 million figure cited by Coffin might be low.

But she expects far fewer employees will be rehired under the requirements in Parnell's law. She said hiring retirees is not needed much at a time when many people are looking for work.

The rehired people can accumulate additional pension benefits by continuing to work. But most public employees retire after 20 years on the job. Only about 10 percent have worked the 30 years that entitles them to full retirement benefits, Parnell said.

The Social Security system also permits people qualified for retirement benefits to continue to work, although with a reduction in benefits before they reach the full retirement age.

Full Social Security retirement age for people retiring now is 66. They can continue to work and draw full benefits, according to a Social Security spokeswoman.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.