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Departments prepare to slash working retirees

Posted 11 years 311 days ago ago by   

State Worker Sacramento Bee June 21, 2012

The Brown administration has put out the word: Departments, get ready to whack your working retirees.

The official term for the 5,800 or so state workers who draw both a pension and a paycheck is "retired annuitants." Sometimes they're tagged "double dippers." State workers occasionally refer to them as "retired irritants."

Gov. Jerry Brown has departments thinking about how to eliminate all retired annuitants except those in "mission critical" jobs. The idea enjoys near-universal acclaim.

Still, there are some holes in the arguments of the various proponents.

State employee unions love it because, in theory anyway, jobs now filled by retirees would go to the dues-paying rank and file.

Yet state retirees can work only six months per fiscal year before it affects their pensions. Many work far less on short-term projects or seasonal jobs. Even assuming that every state retired annuitant worked the full 960 hours allowed by law and that all those jobs could be miraculously combined, the result would be just 2,900 full-time positions, a fraction of the 214,000 state-employee workforce.

The unions have always opposed outsourcing state jobs – from prison guards to computer programmers – claiming that privatizing hangs a higher cost on the government. The hourly rate for a contract lawyer, for example, can run 10 times what a state attorney earns.

But when it comes to recycling retirees, the unions don't argue cost. Retirees are undeniably the cheaper option.

Meanwhile, pension reformers, normally at loggerheads with organized labor, also want to take away double dippers' ladles.

This is a big issue for local governments, as are pension costs in general. It doesn't exactly save as much for the state, however, as reformers might imply. California spent just 7 cents of every $10 of payroll last year on retired annuitants. Their median pay: $17,000.

California State Retirees President Susan Sears has entered the fray, arguing retirees are a cheap source of experienced and knowledgable staff.

"To virtually eliminate the entire annuitant program may be penny wise in the short run, but it is pound foolish in the long run," Sears said in a Tuesday news release.

That argument, too, has a hole: It ignores the fact that the program has become a substitute for sound training and succession planning. It leaves jobs that are ostensibly vital to a corps of rented employees who can be easily fired – and who can more easily fire their employer.

As departments face cutting their retirees, perhaps they should ask themselves, "How did we become so dependent on them in the first place?"

Still, the convergence of opinion makes the stance a rare twofer for Brown. Organized labor gets something to check off its wish list. The governor can claim a little street cred as a cost cutter while selling a November tax hike measure to voters.

CalPERS Pension Buck