State's retiree policy causes concern

Thursday, October 17, 2002

BENEFITS PLUS PAYCHECKS

By Paul Sloca ~ The Associated Press

JEFFERSON CITY, Mo. -- Some state officials are expressing concern over a law that allows state employees to draw retirement benefits while simultaneously receiving state paychecks.

The law lets retired employees continue to work for state government on a part-time basis for up to 1,000 hours in a 12-month period. Those who exceed the limit could have their retirement benefits suspended.

The system was designed to open senior-level positions for younger workers while still allowing the state to benefit from the expertise of longtime employees.

The Missouri Commission on Total Compensation on Wednesday began examining the phased-in retirement system with hopes of better defining the state law.

There hasn't been a comprehensive review of the potential consequences of the retirement incentive system, which some commissioners said is open to problems.

"This is something we need to be careful with," said commission member and state Sen. Larry Rohrbach, R-California. "I think taxpayers benefit most from paying people to work, not to retire and work both."

Rohrbach said he was concerned that someone could retire from an agency, then be rehired to the same position on a part-time basis.

"That appears to be kind of a setup thing where you can have your cake and eat it too," Rohrbach said.

823 return to work

Of the 65,000 state employees, 823 have retired then returned to state government on a part-time or full-time basis. Those who have returned on a full-time basis do not receive retirement benefits.

For example, Ron Kirchoff, the former state Senate administrator, retired in February but was hired on a part-time basis as interim director of the Senate research department.

Under the contract, Kirchoff can be paid for a maximum of 990 hours a year, meaning that he would earn slightly more than $43,000 a year based on an hourly rate. But that does not include his retirement benefits, which he also receives. As Senate administrator, Kirchoff earned more than $90,000 a year.

Several department directors on the compensation commission said Wednesday that their agencies tracked the number of hours worked by retirees.

Steve Mahfood, director of the Department of Natural Resources, said that there is a lot of "paranoia" among state agencies about keeping track of overtime hours accumulated by retirees.

"This is what is important for the taxpayers," Mahfood said. "Luckily, this is not a problem right now, but that doesn't mean with the funding for state services there won't be a problem in the next couple of years."

Norm Robinson, executive director of the Highway and Transportation Employees and Highway Patrol Retirement System, said advisory letters are sent to retirees informing them when they are approaching the 1,000-hour threshold.

Robinson said the commission's goal is to study ways to improve the system and provide additional information that may be used to tighten the retirement law.

"We want to make sure there are no abuses because we're trying to protect the public interest and ensure that an agency gets the people they need," Robinson said. "This is a monumental task but something we think is doable."

Gary Findlay, executive director of the Missouri State Employees' Retirement System, called the situation a "quagmire" that might not easily be resolved.

"There is the opportunity for potential abuse," Findlay said. "But there are potential abuses under any law."

Other states that allow retirees to return to state employment on a limited basis include Virginia and Florida.

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