‘A Corrupt Practice’: Interview with Allen Kerr on State Retirement Double-Dipping

As a follow-up to our primer on double-dipping yesterday, here’s more from state Rep. Allen Kerr, who’s done more than any elected official to shine a light on how some state employees are able to “retire” briefly and then return to their jobs a few weeks later to collect both a salary and a pension.

Kerr bluntly calls double-dipping a “corrupt practice” in which highly compensated upper level state employees like Artee Williams, head of the state Department of Workforce Services, who recently joined the ranks of double-dippers, are “gaming the system” in an abuse of public trust.

 

Time bomb for pension systems

Kerr points to the time bomb of state employees currently covered under Deferred Retirement Option Plans (DROP), who were “grandfathered” from the 2009 law that was passed to rein in double-dipping, and who will be eligible for retirement (and could return as double-dippers, should they so desire) in the next few years.

“There are about 1,800 plus of those people in there right now,” Kerr told me in an interview, “and just like all the Baby Boomers going on to Medicare and Social Security right at the same time, we’re going to have about 1,800 people within two or three years hit all at once, that are going to be either leaving the job or can take advantage of this 30 day window if they want.”

‘We’re talking about the upper echelon’

Kerr points out that once a state employee retires and comes back as a double-dipper, they’re not contributing to the pension system any longer, and so they represent a double drain on the state treasury.

“What effect is it going to have for 1,800 employees, who are no longer contributing to the plan, what kind of effect is that going to have on that retirement plan?” Kerr says. “You’ve got no money coming in, but you’re got all that money going out…We’re not talking about low-paying jobs, we’re talking about the upper echelon—those people that are going to cost us money.”

Worse yet, Kerr says, is the closed loop hiring process that protects the double-dippers’ jobs for 30 days until they return.

“My complaint is that when somebody retires, the rules are that you have to advertise that job openly,” Kerr said. “It’s not supposed to be a foregone conclusion that you’re just going to go back — you have to reapply for your job. They’re not doing that.  They’re going to their employer and saying I’m going to take advantage of this situation, and I want a guarantee that my position is going to be held for me for 30 days and then I’m going to come back. Which is what Gov. Beebe did with Artee [Williams].”

Taxpayers ‘don’t like it’

It’s one of the top issues he hears about from constituents, he said.

“I get a dozen emails a day wanting to know, ‘How in the world are these people still double-dipping? I thought you fixed that,’” Kerr said. “I get people angry that we’ve got the highest jobless rate in Arkansas in a couple of decades and you’ve got these people at the state getting two salaries for one job. That’s the attitude of the general public—they don’t like it.”

For Kerr, it’s not just a issue of fiscal responsibility and actuarial soundness—it’s also a matter of smart workforce management and good government, because the double-dippers, in addition to being expensive, are keeping “new blood” out of state government.

“My whole point is, they’re not contributing to the plan, they’re taking the place of somebody who would be contributing, and they are taking the place of new blood, new ideas and the benefits that we would gain from that,” he explains.

Meanwhile, the hits keep on coming: Here’s an Arkansas Times piece from this week noting two high school coaches in Garland County who recently retired and are seeking to be rehired as double-dippers.

What happens next?

Last week, Kerr requested a legislative interim study to more clearly determine the scope of double-dipping in state government, as a step toward making additional legislative fixes to the system. You can read more about that here.