Good Government

Oklahoma police and fire pensions prevent double dipping

November 1, 2018

Jonathan Small, Mike Brake

Recently we wrote about examples of pension “double dipping,” the practice of collecting one state pension while earning or even collecting on a second state pension. The topic is important for two reasons. First, the generosity of government pensions is rarely considered in debates about government employee pay. That creates a distorted picture of total compensation, making government pay appear lower than it really is. Second, it can strain the pension system. While recent reforms in Oklahoma have reduced unfunded liabilities, the state systems remain underfunded.

Concerns are not unique to Oklahoma. In 2017, Illinois enacted a law limiting post-retirement employment for police officers, since so many of them were retiring from one agency and then signing on with another. A 2015 report said New York had 2,600 workers collecting state pensions while working new state jobs. The Pew Charitable Trust found in 2015 that state and local pension systems nationwide were underfunded by $1.4 trillion.

Of course, retirees and employees are not to blame if their pension system is in the red or even if it gives them a windfall payout. For state and local employees, the responsibility to design a sustainable and fair system belongs to state legislators and the governor.

Oklahoma’s two uniformed service pension systems make it almost impossible for retirees to double dip within their chosen occupations.

The Oklahoma Police Pension and Retirement System and the Firefighters Pension and Retirement System both allow those enrolled in their programs to retire with as few as 20 years of service, although many participants remain on the job for 25 or more years.

The theory behind allowing law enforcement and firefighting personnel to retire so soon is the same one that permits 20-year military careers: hazardous duty service is primarily a younger person’s occupation, and those who place themselves in harm’s way merit an earlier pension.

“We try to prevent double dipping,” said Ginger Sigler, executive director of the police pension system. Retired police officers are not allowed to return to work in law enforcement to build or expand their existing pensions. If they do seek a second career in a law enforcement agency, it must be as a civilian or as an enrollee in the city or county pension system, not one for law enforcement.

Chase Rankin, executive director of the firefighters system, said his agency has similar restrictions on retired firefighters returning to work. “We’re pretty strict on that. We have a few go back as volunteer firefighters, but you cannot be employed in a firefighting capacity once you have retired,” he said.

Of course, many retired public employees return to work in jobs in the private sector or become self-employed, which adds to their Social Security benefits when they fully leave the workforce. But that places no added burden on state pension systems or the taxpayers who help fund them.