Public Servants Take Master to Cleaners

There is nothing wrong with maximizing one’s income, is there? Well, there is legal and then there is moral:

Greg Royer ranks among the state’s top-paid employees, with a salary of $304,000. But that’s just part of his income. For nearly seven years, he’s also collected an annual pension of $105,000.

Royer, the vice president for business and finance at Washington State University, tops a long list of college administrative staff members who’ve been able to boost their incomes by up to 60 percent by exploiting a loophole in state retirement laws.

A Seattle Times investigation has found that at least 40 university or community-college employees retired and were rehired within weeks, often returning to the same job without the position ever being advertised. That has allowed them to double dip by collecting both a salary and a pension.

The pattern of quickie retirements has continued despite the Legislature’s efforts to crack down.

A Times analysis of state payroll and retirement records shows that, as of the beginning of this year, about 2,000 people were collecting both wages and a pension from the state. In about two-thirds of those cases, however, retirees had returned to a state job on a part-time or on-call basis.

The context is the state of Washington and a very poor fiscal situation–including within the university system. Many people have been laid off in the last few years because of shrinking education dollars.

Here’s the response of one of the people who benefits:

In an interview, Tapfer, 58, who collects a salary of $70,000 and a pension of $36,000, said he had “no inkling” that he might get rehired at the time he left WSU.

“I’m an ordinary guy who is working for a living. I put in a lot of years, and you’re making out like I’m doing something wrong,” he said. “If you want to criticize the system, fine, but don’t criticize the individual.”

Retired and rehired at 58. Ordinary guy. Don’t criticize the individual. Right. Once again, something being legal does not make it moral.

Are these people taking advantage of a broken system? It would appear so. And to all who would say something along the lines of “they’re just looking out for themselves,” allow me to remind you that they are state employees who are to be serving the educational needs of the state’s residents, not milking the system.

[M]ost state employees can return to work for only up to 40 percent of the hours they worked as full-timers — or lose some of their pension benefits. But thanks to a glaring loophole, many higher-education employees have been able to skirt the rules.

It’s because colleges and universities typically have two parallel retirement systems — the state system and a separate system administered by the institution. Administrative employees can often retire under the state system and return to work under the university plan.

By switching plans, the workers put themselves beyond the reach of state limitations on double dipping. In the eyes of the state, it’s as if the workers returned to a job in the private sector. In reality, the only thing that has changed is some paperwork.

If they were getting payout from a personal IRA or 401k, then that would be one thing. Such money would, after all, be the direct result of their own investments. But that does not seem to be the case:

[A]lmost all employees enrolled in the system stand to gain far more back in pension payouts than they ever contribute through paycheck deductions. Most people will receive back their lifetime contributions and then some within three years of retirement, according to a Times analysis.

In closing, let’s hear a final argument from one of these fine folks:

“I had served 30 years and consequently was entitled to the pension,” he said. “And as far as the college was concerned, they needed a president.”

The man was entitled, so be quiet.