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No more double dips for public pension retirees

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The Indiana Legislature has passed a bill that would cut off supplemental benefits for public pensioners in their second careers—a practice commonly known as double-dipping.

The proposal would affect any member of the Public Employees Retirement Fund, or PERF, who retires after June 30 but takes another PERF-eligible job. Those second-career retirees will be allowed to continue drawing the benefits they’ve earned, but they can’t accumulate any more.

PERF table kathleen double dipCutting off double dips will save PERF an estimated $5.5 million while slightly lowering employer contribution rates. But it won’t make a dent in the funding ratio, which is 85 percent, according to the fiscal note on Senate Bill 526, which has passed both chambers.

Unfunded liabilities are a big problem for state pension plans, but double-dipping isn’t a major cause, said David Draine, senior researcher at the Pew Charitable Trusts.

“At the same time, there’s two reasons one should pay attention to it,” Draine said. “Tax dollars should be used in accordance with what voters want. Voters in many states have said this is not a good use of it.”

There are 531 PERF retirees continuing to accumulate benefits. State government, Indiana University and Purdue University and large local governments, including Marion County, are their biggest employers.

The double-dippers represent a tiny fraction of PERF’s 145,519 active members. The average retirement age is 64, which means most members probably don’t want to continue working.

Retirees are losing a benefit, but it’s probably not one that drives their decision to go back to work.

“I think they probably go back for the additional pay,” said Bill Murphy, executive director of the Retired Indiana Public Employees Association. The average monthly benefit is $555—the second-lowest of eight funds managed by the Indiana Public Retirement System.

Double-dipping is already against the rules for teachers, police and firefighters, excise police, judges, prosecutors and legislators. The Legislature ended supplemental benefits for Teachers Retirement Fund retirees in 2007, so changing the rules for PERF seemed like the logical next step, said Sen. Phil Boots, who authored SB 526.

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  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

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