when "retirement" is just a higher pay grade

[Yukon Cornelius]

he kinda sounds like a politician ( he was a super after all) .

[Azazello1313]

Again, I ask is the district or state out any additional money because he didn't really retire? He was eligible to retire. Had he retired the state would have been out more money cause they would still be paying his benefits, as well as another persons. Comparing teacher retirement to SS is not a good example as SS has morphed into much more than it was ever intended to be in the first place, something both you and I have stated in the past. Teacher retirement has remained the same. The comparison to the 401K is much more applicable than the comparison to SS. So, I ask again, do you think you should have your access limited on your 401K if you decide to work well into your 60's or 70's?

 

again, pension benefits are designed to be payable once someone retires. not once they reach an eligible age. this keeps people who want to continue working and earning a higher income out of the pension pool until they actually retire, and this is an important variable in how the funds calculate their obligations. the entire pension payment formula would be thrown out of whack if it is easy to subvert the retirement requirement and replace it with a de facto age trigger. the way it's supposed to work, you work until you're 60 (or whatever) at a salary of $X, then you either continue working at that salary, or retire and take a pension of, say, $0.6X. the way it would work if this kind of fake "retirement" is allowed is you work until you're 60 and then you get a 60% raise until you decide to actually retire.

 

it all just gets back to what grunge said:

The real problem here and everywhere with these pensions is they are just totally out of control. Extremely poor management decisions to give these outrageous benefits that cannot be afforded nor maintained.

[Riffraff]

For those saying that retirement "age" is a factor. Where do we draw the line on the topic? Next example: Military person retires with 20 years of service at age 38. Should they retire and not be expected to work again?

 

Common sense says no. So age is a huge factor. Age descrimination or sorts?

 

I know the majority of military take a paycut when they leave, but their retirement usually puts them back up to where they were or higher. In essense a pay raise.

 

Yeah, I know most Infantry skill sets probably don't make as much. But technical and medical specialties usually make plenty more. Nothing is all inclusive.

 

Plenty leave the military and then go to work supporting the military. I consider what the guy in the original post did the same as this.

[Clubfoothead]

I guess I am missing something. Doesn't the atricle say he's going to be a consultant for a private company after retiring?

[BeeR]

I thought for sure this would be about civil service "workers."

[BeeR]

For those saying that retirement "age" is a factor. Where do we draw the line on the topic? Next example: Military person retires with 20 years of service at age 38. Should they retire and not be expected to work again?

 

Common sense says no. So age is a huge factor. Age descrimination or sorts?

 

I know the majority of military take a paycut when they leave, but their retirement usually puts them back up to where they were or higher. In essense a pay raise.

 

Yeah, I know most Infantry skill sets probably don't make as much. But technical and medical specialties usually make plenty more. Nothing is all inclusive.

 

Plenty leave the military and then go to work supporting the military. I consider what the guy in the original post did the same as this.

OK actually this was the first thing that came to mind. In fact kicking myself for not doing exactly that.

[Ursa Majoris]

I guess I am missing something. Doesn't the atricle say he's going to be a consultant for a private company after retiring?

This. I thought he was working for someone else as a consultant too, just doing the same job. If that's the case, the Education Authority simply outsourced the role, right?

[gbpfan1231]

This. I thought he was working for someone else as a consultant too, just doing the same job. If that's the case, the Education Authority simply outsourced the role, right?

But doesn't this decision to outsource the job cost the state money? Again this is what bothers people - who benefits from this? The taxpayer - no. The state employee = yes

[Clubfoothead]

If the employee has a contractual agreement with the state that contains guidelines situplating when he can retiire and how much he gets paid when he does retire, if that employee has fufilled his obligations under the contract, why should the state be relieved of it's obligations under the contract simply because that employee decides to seek employment elsewhere?

 

I guess what I don't understand is what one has to do with the other.

[gbpfan1231]

If the employee has a contractual agreement with the state that contains guidelines situplating when he can retiire and how much he gets paid when he does retire, if that employee has fufilled his obligations under the contract, why should the state be relieved of it's obligations under the contract simply because that employee decides to seek employment elsewhere?

 

I guess what I don't understand is what one has to do with the other.

He is doing the SAME job for the SAME school for the SAME pay - yea I guess they have nothing to do with each other at all.

 

Bottom line is does this cost the state more or not - I think it costs the state more. Bottom line that is not a good thing.

[Azazello1313]

I guess I am missing something. Doesn't the atricle say he's going to be a consultant for a private company after retiring?

 

here's what the article says: "A contracting firm, Educational Services Inc., will hire Mr. Bejarano for the same job he has now."

 

Educational Services, Inc. appears to be a hiring agency that was created for exactly this purpose, double-dipping. from their website:

 

About Us

ESI is the founder and leader of the return to work employee lease back program in Arizona. From a humble beginning of only five teachers in a single elementary district in 1999, ESI has grown to currently serve over 140 Arizona school districts, colleges, cities and towns. We’ve amassed unparalleled experience in designing programs that give the employer ultimate control and yet provide a win-win solution for retiring employees. As the originators of the return to work program we would like to explain how the program works.

 

What is a return to work program?

Currently participants in the Arizona State Retirement System (ASRS) who retire and wish to return to work immediately can work only part-time with a ASRS employer without jeopardizing their retirement check. By utilizing the services of ESI, a retiring employee can return to work immediately and work full-time in their current position without jeopardizing their retirement check. In other words; an ESI employee receives their retirement check plus a check from ESI for an increase in pay up to 70%!

 

Obviously, the taxpayer through the school district pays the salary....AND a little kickback fee to the agency.

[Clubfoothead]

here's what the article says: "A contracting firm, Educational Services Inc., will hire Mr. Bejarano for the same job he has now."

 

Educational Services, Inc. appears to be a hiring agency that was created for exactly this purpose, double-dipping. from their website:

 

 

 

Obviously, the taxpayer through the school district pays the salary....AND a little kickback fee to the agency.

 

So what? You just want him to stay retired and have someone else fill the position at Educational Services, Inc? According to the school district they get to keep a guy with 30 years of experience and save $12,000.00 by using Education Services Inc. If the guy is qualified to fill the position with Education Serives Inc, what do you care who that private company hires?

Edited April 6, 2011 by Clubfoothead

[Ursa Majoris]

But doesn't this decision to outsource the job cost the state money? Again this is what bothers people - who benefits from this? The taxpayer - no. The state employee = yes

I think the state saves, thus:

 

Instead of paying the old hire's retirement pension AND new hire's salary AND new hire's benefits, the state now pays old hire's retirement AND salary to agency AND fee to agency. As long as fee to agency < benefits, the state saves money, plus it retains the experience and knowledge of the old hire.

 

They have saved money versus if they had to directly hire a new guy.

[Thunder Chicken]

For those saying that retirement "age" is a factor. Where do we draw the line on the topic? Next example: Military person retires with 20 years of service at age 38. Should they retire and not be expected to work again?

 

Common sense says no. So age is a huge factor. Age descrimination or sorts?

 

I know the majority of military take a paycut when they leave, but their retirement usually puts them back up to where they were or higher. In essense a pay raise.

 

Yeah, I know most Infantry skill sets probably don't make as much. But technical and medical specialties usually make plenty more. Nothing is all inclusive.

 

Plenty leave the military and then go to work supporting the military. I consider what the guy in the original post did the same as this.

 

3 Years, 3 months, 19 days until I can "retire" at 37. I do plan on coming back and "double-dipping" as a contractor or "Govie". If I can't find a job out of the gate I'll be working on my troops to teachers. I'm not ready to stop working

[Azazello1313]

I think the state saves, thus:

 

Instead of paying the old hire's retirement pension AND new hire's salary AND new hire's benefits, the state now pays old hire's retirement AND salary to agency AND fee to agency. As long as fee to agency < benefits, the state saves money, plus it retains the experience and knowledge of the old hire.

 

They have saved money versus if they had to directly hire a new guy.

 

the district saves a little bit of money. the state doesn't, assuming the state is responsible for the 6-figure pension of this "retiree".

Edited April 6, 2011 by Azazello1313

[WaterMan]

Seems like smart money management that any CEO would copy cat.

[gbpfan1231]

I think the state saves, thus:

 

Instead of paying the old hire's retirement pension AND new hire's salary AND new hire's benefits, the state now pays old hire's retirement AND salary to agency AND fee to agency. As long as fee to agency < benefits, the state saves money, plus it retains the experience and knowledge of the old hire.

 

They have saved money versus if they had to directly hire a new guy.

I think you are missing a couple of points.....

 

1. A replacement hire would usually be hired on at less of a salary - this guy is getting same salary so you would need to account for that

 

2. And here is the big one I think everyone is missing - this dude would probably not retire if he did not have this sweet deal - why would anyone not take this deal? He is double dipping - when he retires he starts to earn $100k immediately and the state starts to pay it out. If he lives for 10 more years that is $1 million. If he does not have this sweet deal maybe he works for say three more years. The state does NOT pay him the pension for those three years so they only end up paying him 7 years of pension so the state is ahead $300k plus any earnings they make on the extra $300k in the coffers.

 

I don't see how anyone can argue how the state does not lose in that situation. What am I missing with point #2 - it seems kinda obvious to me???

[Pope Flick]

[Ursa Majoris]

I think you are missing a couple of points.....

 

1. A replacement hire would usually be hired on at less of a salary - this guy is getting same salary so you would need to account for that

 

2. And here is the big one I think everyone is missing - this dude would probably not retire if he did not have this sweet deal - why would anyone not take this deal? He is double dipping - when he retires he starts to earn $100k immediately and the state starts to pay it out. If he lives for 10 more years that is $1 million. If he does not have this sweet deal maybe he works for say three more years. The state does NOT pay him the pension for those three years so they only end up paying him 7 years of pension so the state is ahead $300k plus any earnings they make on the extra $300k in the coffers.

 

I don't see how anyone can argue how the state does not lose in that situation. What am I missing with point #2 - it seems kinda obvious to me???

You're missing the likely probability that he WOULD retire. Why not, on $100k / year, on top of whatever he's socked away himself. Sure, he's now on a sweet deal but the state / district / whatever is paying out less money than it would if he had retired.

 

Your assumption that a new hire costs less is incorrect. It's likely that the new hire would cost the same in salary, at least, plus there are the intangibles of getting up to speed, recruiting costs (hugh!) and the leap in the dark that any new hire represents. This isn't an entry level position and, as the CEO apologists will always remind us, you gotta pay for the best.

[gbpfan1231]

You're missing the likely probability that he WOULD retire. Why not, on $100k / year, on top of whatever he's socked away himself. Sure, he's now on a sweet deal but the state / district / whatever is paying out less money than it would if he had retired.

 

Your assumption that a new hire costs less is incorrect. It's likely that the new hire would cost the same in salary, at least, plus there are the intangibles of getting up to speed, recruiting costs (hugh!) and the leap in the dark that any new hire represents. This isn't an entry level position and, as the CEO apologists will always remind us, you gotta pay for the best.

I know you are a smart dude but I think you are still missing the major point here. The fact that a person can retire AND collect pension AND continue to get paid the same salary will only mean that said individual can/will retire earlier. How can you not see this point?

 

Let me try to make it a little easier for you to understand. If you collect a pension of 100k AND a salary of 150k that means while you are collecting both you are pulling in 250k. If you need say a number of 1 million to retire and you had zero cash and all the money you make stays in your pocket then it would only take four years to hit that number the way you pay this guy - if he can't retire and get the same pay he would need to work a bit over 6 years to hit that million mark.

 

Is it not true that this specific guy is making more money this way? They do call it double dipping so I hope you would agree he is making more money by double dipping. When you make more money it means you are able to retire earlier - by retiring earlier the state is paying more money out in pension than they would be if a person retires later.

 

That is the way I see it.

[Clubfoothead]

That is the way I see it.

 

I don't understand the way you see it.

 

If the guy is good at his job, has 30 years of experience and you can keep him on at the same position for a $12,000.00 savigs to the school district, why would you not?

 

“It’s a real win for the district,” said its spokesman, Abedón Fimbres, who estimates the district will save about $12,000 annually since it will no longer have to contribute to Mr. Bejarano’s pension. A contracting firm, Educational Services Inc., will hire Mr. Bejarano for the same job he has now.

 

Whenever anyone even hints that the Wal Street fat cats who profit take million dollar bonuses have their salaries capped or their taxes increase we hear about how the best will no longer want to fill those demanding positions. Well, I guess the same holds true in the public sector.

 

Educational Services, Inc. is going to pay someone $105,000.00 or $150,000 a year to do the job. So again, if the guy is good at his job, has 30 years of experience and you can keep him on at the same position for a $12,000.00 savigs to the school district, why would you not? Who cares if he is collecting a retirement at the same time, he earned it, right?

[gbpfan1231]

I don't understand the way you see it.

 

If the guy is good at his job, has 30 years of experience and you can keep him on at the same position for a $12,000.00 savigs to the school district, why would you not?

 

 

 

Whenever anyone even hints that the Wal Street fat cats who profit take million dollar bonuses have their salaries capped or their taxes increase we hear about how the best will no longer want to fill those demanding positions. Well, I guess the same holds true in the public sector.

 

Educational Services, Inc. is going to pay someone $105,000.00 or $150,000 a year to do the job. So again, if the guy is good at his job, has 30 years of experience and you can keep him on at the same position for a $12,000.00 savigs to the school district, why would you not? Who cares if he is collecting a retirement at the same time, he earned it, right?

Yes they are saving the 12k by not having to put into his pension but they are paying out 100k in his pension!!!!!!!!!! This enables people to retire earlier.

 

Do some simple math for me please. If we pay him his pension for 6 years and not pay into his pension for 6 years what does it cost? Let me help you 100,000 - 12,000 = 88,000 * 6 = 528,000.

 

If he does not retire early and continues to work as an employee for two more years then over those same 6 years it costs the state - 100,000 * 4 = 400,000 and then add on the 12,000 * 2 and you get $424,000.

 

Let me ask you a simple question - if you got paid 150,000 per year and when you retired you then got 250,000 per year versus getting paid 150,000 per year and then when you retire you would get 100,000 per year instead of 250,00 per year do you think you may be able to retire earlier? I would be able to.

 

I agree they save the $12,000 per year but if people retire early and live longer it costs more than the 12k they save and is not good for the state and this double dipping enables people to do that. The earlier people retire the more pension money they earn - it does not run out like your 401k does - they get it until they die!!

 

I don't know if I am missing something but this just seems obvious to me - maybe I am wrong????

[Ursa Majoris]

I know you are a smart dude but I think you are still missing the major point here. The fact that a person can retire AND collect pension AND continue to get paid the same salary will only mean that said individual can/will retire earlier. How can you not see this point?

 

Let me try to make it a little easier for you to understand. If you collect a pension of 100k AND a salary of 150k that means while you are collecting both you are pulling in 250k. If you need say a number of 1 million to retire and you had zero cash and all the money you make stays in your pocket then it would only take four years to hit that number the way you pay this guy - if he can't retire and get the same pay he would need to work a bit over 6 years to hit that million mark.

 

Is it not true that this specific guy is making more money this way? They do call it double dipping so I hope you would agree he is making more money by double dipping. When you make more money it means you are able to retire earlier - by retiring earlier the state is paying more money out in pension than they would be if a person retires later.

 

That is the way I see it.

You're seeing it from the POV of being annoyed that they guy is "double dipping" which he assuredly is, in that he's pulling down retirement and salary. I'm seeing it from the POV of the taxpayer, who is actually paying out less in this scenario than would be the case if the guy retired and a new hire was put in place.

 

If he had retired to dig his yard, the state would pay his pension (which, BTW, he had reached the age to be able to claim). They would also have to pay the salary and bennies of a new guy, plus they would have the executive search fee and the unknown of a new employee.

 

Yes, he is making more than he was but the state is paying less than it otherwise would. Why do you think he would be happy to continue working and not collect his pension?

[gbpfan1231]

You're seeing it from the POV of being annoyed that they guy is "double dipping" which he assuredly is, in that he's pulling down retirement and salary. I'm seeing it from the POV of the taxpayer, who is actually paying out less in this scenario than would be the case if the guy retired and a new hire was put in place.

 

If he had retired to dig his yard, the state would pay his pension (which, BTW, he had reached the age to be able to claim). They would also have to pay the salary and bennies of a new guy, plus they would have the executive search fee and the unknown of a new employee.

 

Yes, he is making more than he was but the state is paying less than it otherwise would. Why do you think he would be happy to continue working and not collect his pension?

I guess I am seeing it a bit different.

 

My main point is this enables someone to retire earlier if they have the ability to double dip and by retiring earlier the state pays more years of a pension where they would not have to if double dipping was not a factor. That is all I am trying to say.

[Ursa Majoris]

I guess I am seeing it a bit different.

 

My main point is this enables someone to retire earlier if they have the ability to double dip and by retiring earlier the state pays more years of a pension where they would not have to if double dipping was not a factor. That is all I am trying to say.

He may have been able to retire anyway and this was the only way he'd stay.