Commentary: Defending Double Dipping?

The problem of double dipping into the pension system is a huge problem that the legislature and reformers have fought hard to address.  Unfortunately, Davis Enterprise columnist Bob Dunning is defending the double dipping of the new UC Davis police chief which, is allowing him to take in an unconscionable $435,000 per year.

Why does Mr. Dunning defend such a practice?  “The answer is easy,” he says.  “(N)ew police chief Joe Farrow served at the California Highway Patrol for 37 years, the last nine as statewide commissioner overseeing 11,000 employees and a $2.5 billion annual budget … as such, he drew a salary of 245,000, which does not seem even remotely excessive considering the responsibilities involved.

“I mean, he’s not a newspaper columnist, but he does deserve to be compensated for his efforts,” the columnist quips.

He then proceeds to defend the system.

Mr. Dunning writes, “In recognition of those 37 years with the CHP, he is eligible to immediately retire at 90 percent of his final salary, or about $220,000 … again, completely reasonable given that this was the deal he was offered when he agreed to work for the CHP …”

He adds, “When added to the $215,000 UC Davis will pay him for his promise to never, ever let one of his officers use pepper spray, he’ll be pulling in a cool $435,000 a year … fair enough … Farrow has put in his time in service to all of us and will simply be collecting a well-deserved retirement that will not affect his duties at UC Davis in any way, shape or form … we’re lucky to have him …”

That last line remains to be seen, but Mr. Dunning is inexplicably defending a system that is not only wrong but killing the public pension system in general.

The irony is that the people who get hurt by this are actually the lower wage earners.  The average benefit is about $34,000 per year for state employees and about $19,000 for school district employees.  The median state pension is about $14,000 per year.

The problem is that when people see employees making six figure retirement pensions, they turn against the system.

But there is a more fundamental problem that Bob Dunning is failing to recognize in his overt support for the largesse of the current system.  As the Press-Enterprise put it in a 2014 editorial, “Pensions should provide retirement income, not a way to pad the paychecks of people still on the job.”

We can argue that the new chief is entitled to his pension in recognition of those 37 years of work with the CHP.  We might question the amount he is receiving, the fact that he can earn 90 percent of his final salary – but the reality is that that is supposed to be retirement income, not a subsidy for his new employment path.

As the Press-Enterprise put it, “Such abuses are nothing more than a taxpayer-funded giveaway to government employees, driving up public costs for no good reason.”

The practice “of retiring from a job and starting pension payouts, then returning to work is known as double-dipping. Private-sector workers generally have to wait until they leave the work force to start collecting retirement benefits, but many government workers can game the system to pocket a paycheck and a pension simultaneously. Public-sector pension reforms that legislators enacted in 2012 put some limits on double-dipping, but hardly eradicated it.”

The San Jose Mercury News pointed out another problem with the system, although some of the details have now been changed as the result of new laws.  One of the problems is that, for many employees, they top out their benefits at 90 percent.  Once they hit that 90 percent level, they have an incentive to retire.

“The problem is, there’s an incentive to retire early,” one person quoted in the Mercury News article said. “Some public employees have built up so much in pension benefits that they can’t afford to work.”

Think about it, the city of Davis faces millions in unfunded liabilities to the point where the city council is considering raising taxes on Mr. Dunning (and everyone else who lives in Davis) because the cost of pensions is going up.

By allowing double dipping, people who are already making a salary are also pulling in a few extra years of pensions.  One person might only be a drop in the bucket, but think about it – the UCD chief, if he ends up working just four years, pulled in $1 million in pension benefits just by himself.  Multiply that across the state for all the double dippers and you’re talking real money at some point.

Normally that is something that Mr. Dunning would rail against, but here he strangely applauds it.

These kind of excesses are building to the point where the system itself is either going to implode on itself due to its own inefficiencies, or be scrapped by a public that is increasingly fed up with seeing people game the system.

But the people he ends up hurting are ultimately going to be those average, low-end workers – who are not gaming the system, but rather making an honest living.

—David M. Greenwald reporting



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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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10 thoughts on “Commentary: Defending Double Dipping?”

  1. Keith O

    I totally agree with David’s assessment here.  No public employee should ever get 90% of their pay once they retire.  It all falls on the back of average tax paying citizens who are burdened through taxation to try and maintain these high paying giveaways.  How many average retirees get 90% of their wages once they leave their job?  Even though most of us are trying to live on considerably less we are now required to pay higher taxes to support extravagant public employee retirements.  Something needs to change.

  2. John Hobbs

    “…this was the deal he was offered when he agreed to work for the CHP …”

    Exactly. Does the Vanguard favor bait and switch just to suit the needs of Davis?

    “game the system” You don’t try to maximize your income? BS.

    ” the UCD Chief if he ends up working just four years pulled in $1 million in pension benefits just by himself, multiple that across the state for all the double-dippers and you’re talking real money at some point.”

    Except of course most civil servants don’t pull down anything close to that kind of pension, so-called public safety positions are generally given more generous pensions, but lumping the folks getting $40k in with the high rollers makes a better scapegoat for you.

    Another one of your anti-labor rants.

    1. David Greenwald Post author

      There are two problems with your comments.

      The first is that I never said that the new chief was in the wrong to take the deal. My criticism is of the system.

      Second, you call this an “anti-labor” rant but ignore the point I make that this actually hurts the average worker.

      1. Paul Thober

        By implication you called the new chief dishonest:

        “But the people he ends up hurting are ultimately going to be those average, low-end workers – who are not gaming the system, but rather making an honest living.”

      1. Howard P

        Just curious… how much do you think the average worker pays for those “extravagant benefits”?
        [as opposed to what they would pay for SocSec for those same workers…]

  3. Howard P

    Interesting fact…

    Someone who worked 46 years, 23 in private sector, 23 in PERS, could see ~ $0 in SS benefits (their own and spousal/survivor)… even though they paid into SS for 23 years (gov’t pension offset)… and even though their spouse worked under SS for 46 years (reduction/elimination of spousal or survivor SS benefits.  There is also the windfall elimination provisions… they both apply.

    https://www.ssa.gov/planners/retire/gpo.html

    plus,

    https://www.ssa.gov/pubs/EN-05-10045.pdf

    No comment, just facts…

  4. PhilColeman

    This is one of those debates where every point raised is correct. There should not be a system where persons can leave employment and still make the same (or more) money than if they remained working. Law enforcement pensions and severance packages given to academic leaders are recent prime examples. I’ll avoid the academic morass, not being to apply any sense of logic to anything it does.

    So we argue that we change the system. In the case of law enforcement, “reform” the pension system. Reform is defined as substantially reducing the financially attractiveness of the current public safety system. Problem solved, that’s all we need to do.

    Well let’s all look at another contentious issue, the performance level of contemporary policing today. Everybody happy? Is everybody satisfied that the profession is able to hire, train–and most important–properly supervise the thousands of local peace officers joining law enforcement every year?

    Of course not. Even within the profession itself, there is widespread dissatisfaction among veteran officers with the recruitment pool of potential candidates to join the ranks. These ranks, by the way, have hundreds of opening in large police agencies, and few local departments are fully staffed. This crisis will not improve by reducing the public pension system benefits.

    It is also true that highly qualified and experienced law enforcement administrators are basically working for nothing in the later stages of their careers. The same with these same people leaving in their late 40’s and early 50’s, at the prime of their career. These are bright people, why should they remain? They are heavily recruited to leave for another position in both the public and private sector.

    But also note that second dip, when police administrators change jobs, is somebody who has all that training and experience, and energy, to do a full and successful career. The second dip is the best value in public administration, and the private sector. UCD is by no means going to have another pepper-spray incident.  UCD has just negotiated the best bargain in recent memory when you consider just the hard-dollar costs of that ghastly pepper-spray episode.

    Staying with the contemporary law enforcement perspective, we cannot attract the candidates we want to see police us, even with the “bloated” pensions still offered. And law enforcement administrators are, by far, much harder to attract, or keep in place (at the prime of their careers).

    There is a solution, I think. But it’s far too lengthy to explain or propose in this kind of short-burst message venue.

  5. Tia Will

    There is a solution, I think. But it’s far too lengthy to explain or propose in this kind of short-burst message venue.”

    Would you be willing to write an article for the Vanguard ? I would be very interested to hear your thoughts re a solution to this problem.

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