INVESTIGATION: 11 RI Retirees Have Pensions Suspended for Breaking Work Rule
Thursday, May 28, 2015
At least 11 retirees in the state pension system had their benefits suspended over the last six years for breaking rules on how much work is permitted during retirement, according to documents the state Treasurer’s office provided in response to a public records request.
Under the current rules, state and municipal retirees in the state system can work for a city or a town and continue to collect their pension as long their employment does not exceed 75 full days or 150 half days a year.
Annual post-employment reports and other documents show that 11 retirees worked for cities and towns in excess of the allowable 75 days between 2009 and 2014.GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST
Those exceeding the limit include Paul Labbadia, the embattled former fire chief for the Coventry Fire District, who lost his job after he was caught on camera drinking and golfing during work hours. Labbadia had retired from the North Providence Fire Department in 2007 and began working in the Coventry Fire District in 2008. (See below slides for information on all 11 retirees.)
His pension was later completely revoked after it was determined that he had not worked enough years in North Providence to earn it.
Those 11 who had their pensions suspended are just the tip of the iceberg of public employees who continue to work in their retirement.
Hundreds of retirees continue to work and collect pensions
In 2014, approximately 450 retired teachers, nurses, college educators, municipal, and state retirees worked one or more days for a local or state agency. Retired educators work as substitute teachers under a similar set of rules as those working for municipal departments: 90 full days or 180 half days are permitted in the school year. State and municipal retirees can work for a state college or university as long as they do not earn more than $15,000 in a year. Retired nurses can earn up to $12,000 at a state facility.
Retirees are supposed to report any days worked. As a backup, their employers report the number of days as well.
None of the retirees in the other categories—teachers, nurses, or college educators—exceeded the allowable work days or earnings limits between 2009 and 2014.
But many are still working quite a lot in their retirement.
In the current school year, 25 teachers had already worked 25 days—a full month with no vacation days—and that was as of December 10, the date of an annual post-employment memo provided to the state retirement board. Because the memos are produced at the end of each year, they do not capture the full number of days teachers have worked in the school year.
Many of the state and municipal retirees, meanwhile, come close to the 75-day ceiling. Last year, 29 retirees worked more than 60 days but under 75 for a city or town.
Work rules said to be ‘lenient’
Those records are leading some taxpayer advocates to say the current work rules should be changed.
“As it equates to almost four working months, or almost one third of the year, 75 days seems quite lenient,” said Monique Chartier, spokeswoman for the Rhode Island Taxpayers group.
The bigger issue, she said, is why a retiree is allowed to work at all and still get their pension.
“In fact, the 75-day rule, and that many retirees skate so close to it without going past it, serves to highlight an extremely generous term of state and local retirement benefit: the ability for so many to retire after only 20 or 25 years and immediately start collect a pension. This exceedingly generous benefit should never have been implemented as it is perhaps the biggest contributor to Rhode Island’s state and local public pension crisis,” Chartier said.
Justin Katz, the research director at the Rhode Island Center for Freedom and Prosperity, also took issue with the rules, saying they pointed to a deeper, systemic problem.
“The degree of complication in these rules is an indication of how perverse public-sector pensions have become. Retired state employees are free to work as much as they want in a private capacity (or in another state), even to the point of having full second careers—leveraging the advantage of their pension to compete against workers who have to live off the same work (while preparing for their own retirements),” Katz wrote in an e-mail.
“If government pensions were being used as they’ve been sold to the public—as an actual retirement plan when employees have reached advanced age—none of this would be an issue. It’s only an issue because the system itself is designed as an abuse,” Katz added.
Union leader says more flexibility needed after ‘pension reform’
But Lucie Burdick, the new president of SEIU Local 580, which represents many state workers in state health care and human service agencies, among others, said many retirees need to work in retirement to supplement pensions that have been cut.
“I have a lot of sympathy for the people who retired because they did not anticipate the reductions in income that came out of pension reform,” Burdick told GoLocalProv.
“They don’t call it ‘pension reform.’ They call it ‘pension theft,’” Burdick added, recalling her conversations with retirees.
In fact, the cutbacks that have been made across the board have created a sort of perverse opportunity for those retirees: in her own workplace, at the Department of Human Services, Burdick noted that reductions in the state workforce have contributed to a lingering shortage of state employees. That creates an opportunity for a retired veteran to come back and fill the spot.
But the situation isn’t exactly a win-win, according to Burdick. Temporary workers, she noted, undermine the stability of the workforce. Despite that drawback, she says it’s more important to give retired workers struggling to make up for lost pension income to come back.
It’s all the more important that they be allowed to come back to work for the state or a local city or town, she said, because of the challenges of getting hired as an older worker.
For those reasons, Burdick says state authorities should reconsider the 75-day rule, perhaps granting more flexibility to recent retirees affected by pension reform.
In this, Rhode Island may be stricter than other states. A cursory look at the rules in two large states, Massachusetts and California showed that both allow their retirees to work more in retirement: a maximum of 120 days a year in both states.
The state Treasurer’s office was not able to provide a comment in time for a publication, including responding to a question about how the 75-day limit was created.
Tips can be sent to [email protected]. Follow Stephen Beale on Twitter @bealenews
Related Slideshow: 11 RI Retirees Who Had Pensions Suspended
Below are the members of the state retirement system who had their benefits suspended at least once between 2009 and 2014 for working beyond the 75 days allowed each year in retirement. Retirees are listed in chronological order. Retirees who had benefits suspended more than once are listed each time there was a suspension. Source: state records provided in response to a public records request.
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