Recover password

Loophole Allows Double Dipping

ALBUQUERQUE, N.M. — For former state employees, double dipping a pension and salary from a new state job is still legal when the new work is at the University of New Mexico and other schools.

It’s a loophole that allowed UNM Internal Auditor Manu Patel to take a $152,000-per-year university job to supplement his $62,000-per-year Public Employees Retirement Association pension in August 2010, two months after the state enacted a law prohibiting PERA retirees from collecting a pension while receiving paychecks from a new state government job.

The salary and pension combination is allowed because UNM, like other state schools, is a member of the state’s Educational Retirement Board pension fund, which includes all state school workers and wasn’t included in the language of the law.

Had Patel taken a new job with a state, county or municipal agency rather than a school, he would have been required to suspend his pension payments.

Lawmakers who passed the 2010 law to curb “double dipping” for PERA retirees didn’t intend to allow an exception for returning to work with the ERB, said Sen. John Arthur Smith, D-Deming, chair of the Legislative Finance Committee.

“From my perspective, that was an oversight. I don’t think there was an intent to do that by any means,” Smith said. “… I don’t think the taxpayers, once they hear of this, would want that loophole to exist.”

Patel is one of 49 PERA retirees who have taken jobs with ERB-affiliated schools since the law curbing double dipping took effect in July 2010, according to ERB data. However, a majority of those state retirees who returned to work at schools are earning on average about $29,000 in annual salary, officials say.

Patel said the $62,000 yearly pension is a benefit he earned and continuing to collect it while working for UNM is within his rights under state law.

“There is no similar (suspended pension) requirement when you go from PERA to ERB or ERB to PERA, and that’s not considered double dipping,” Patel said. “I think they had the hearing, and the Legislature considered that was a reasonable exception.”

Before working for UNM, Patel held a post-retirement job with the Legislative Finance Committee. Had he continued that job, he would have been “grandfathered” in the double-dipping law and allowed to continue receiving his pension because the law applies only to retirees who started new jobs after July 2010.

While working for UNM post-retirement, Patel is prohibited from earning credit toward new ERB pension benefits, ERB director Jan Goodwin said.

School employees are not prohibited from collecting pensions and a teacher’s salary if they return to work post-retirement. At the time the law to curb PERA double dipping passed, the state did not want to deter would-be teachers from filling much-needed classroom positions, Goodwin said.

“The law is very specific and does not address what we call the crossovers,” Goodwin said. “I don’t think that was an affirmative decision (by the Legislature) to treat them differently. I think that it was not addressed because there are not very many of them.”

ERB employs a total of about 460 PERA retirees among the 63,000 active employees at ERB-affiliated schools. About 410 of those workers had the school jobs before the law to curb double dipping was enacted.
— This article appeared on page C1 of the Albuquerque Journal

AlertMe

Suggested on ABQjournal

Advertisement

TOP |