Orange County Supervisor Moorlach comments on double-dipping
Orange County Supervisor John Moorlach sent out this e-mail update to his subscribers today regarding yesterday’s post on double-dippers by reporter Jennifer Muir on the Orange County Register’s “OC Watchdog” blog:
In my long battle against public defined benefit pension plan abuses, I have been frustrated that the system allows for egregious double-dipping opportunities. In fact, the Sacramento Bee also pointed out that some retirees were even triple-dipping-by also filing for unemployment benefits!
But, in my efforts to address this issue, I’ve been more focused on a system that encourages good people to retire at such a young age. We see people retiring in the public sector at 55 years of age. Why not? Stay at work, earn 100% of salary. Stay at home, earn 80% of salary. So they put in 40-plus hours for that additional 20%? No wonder they say, “Why work for free?”
Many retire and realize that they still want to work. Why develop all the experience and knowledge, only to let it sit on a shelf?
After all, some of us Type-A people don’t do well sitting around the house. I also know that many love their careers. We literally force Police Chiefs out because they can’t explain to their spouses that for the long hours they put in, they are only earning an additional 10 to 20 percent in wages. Of course they retire. And, of course they work for another city. After all, that city just lost their Police Chief for the same reason. Are the Chiefs bad people? Of course not.
The answer? Raise retirement ages. This is low hanging fruit. This is what the County of Orange just did with its largest employee bargaining unit. New hires will not automatically go into a “2.7% @ 55″ formula. They will adopt a “1.62% @ 65.” They will be able to adopt the higher benefit, but they will be paying the higher withholdings in order to do so. Senate Bill 752 also lets those employees currently in the higher tier drop down to the lower one. This will be tempting as it provides the elimination of the related withholdings, thus providing an increase in their net paycheck. For many, this may be a raise opportunity they cannot turn down.
The big news? This was a strategy that was negotiated and approved by our largest bargaining unit. And the enabling legislation (co-drafted by our office) passed almost unanimously through a labor-dominated state legislature. This is an amazing story. This is a good first step. And we’re at the forefront of addressing legacy costs. These pension and other post employee benefit costs are boat anchors dragging every municipality in the state down the path of insolvency.