If you had the opportunity to make some serious cash after you retire, would you pass it up?
Some retired workers, who are getting a pension, are double dipping by going back to work.
We are talking about people with the California Public Employees Retirement System, or CALPERS.
The Center for Investigative Action went to work and found out some cities say, it actually saves money.
"DOUBLE DIPPING."
If you live in California you know I'm not referring to a cocktail party faux pas, but the hottest faux pas to hit Sacramento in recent years.
You won't hear the CA Public Employee Retirement System say "double dipping".
CALPERS calls it a retired annuitant, doesn't sound as bad. Infact, your eyes probably glazed over as soon as i said it.
This is what it means: a public employee retires and collects a pension on their highest salary earned, then goes back to work.
If a retiree returns to work for a public employer not contracted with CALPERS or in the private sector, they can continue to collect their pension while working at the new job.
But, if someone returns to work for a CALPERS employer, they must suspend their pension.
This is designed to prevent the double-dip but there are a few exceptions.
Here's the first example.
A retiree can come back to work for a CALPERS employer, still collect their pension and get paid, if they work less than 960 hours a year.
In February , I introduced you to Terry Phau who was a retired law enforcement officer.
Phau went back to work for the Monterey County Sheriff's Office as a management analyst.
"I'm "double dipping" is the term...So for the two months that I work I'm getting my retirement and the salary," said Phau.
Phau worked at the sheriff's office for more than two months, but left before he went over the 960 hour limit collecting $40,000 on top of his pension.
A second loophole: A retiree can come back, work full-time for a CALPERS employer and still collect their pension, if they act as a contractor.
"We only do it when there's a real business reason for the city to use that tool," said Monterey assistant city manager Fred Cohn.
I found out the city of Monterey has several retired employees on its payroll, including current police chief Tim Shelby.
Shelby retired at the end of 2010 and receives a pension of $167,556 a year.
In January of 2011 he signed a one-year contract for $170,472 to stay on as Monterey's police chief.
"And because these people are experienced they know the position know the community, we chose to make that trade off...Save some money, keep the expertise on board," said Cohn.
Cohn said in Shelby's case the city saved $80,000 in benefits and are using him to reorganize the police department.
In the case of former community services director Kay Russo, it saved the city even more.
Cohn said Russo retired when the city merged three departments into one.
The other department heads left and she stayed on an a part-time employee to manage the transition.
Russo kept her pension, the city didn't have to pay her benefits, and saved close to $40,000 paying her a part-time salary for close to five years.
"The retirement is really about what has occured in the past and the re-hire is about some sort of business need we use going forward."
Critics say double dipping happens way too often. I even found a website that helps you double dip. Early-retirement-plan.com gives a step by step process on how to retire early and double dip your CALPERS pension.
Now one of your local lawmakers here in Sacramento is trying to stop the double dip for a second year in a row.
Santa cruz senator Joe Simitian said taxpayers deserve better, "When they pick up the newspaper and see that somebody has retired with a pretty good pension on a Friday they've walked out the door and then they come back on a Monday and start all over again either as an employee or a contractor."
According to CALPERS it checks for fraud and if it's done legally there's nothing it can do.
"It's really a decision between employees and their employers," said Brad Pacheco with CALPERS.
Simitian disagrees.
"Look I don't fault anybody who takes advantage of the existing system...The system not only allows it the system encourages it...Who's going to go home and say 'Honey I deliberately left money on the table?'"
That's why Simitian said lawmakers need to take action.
"We need to change the rules of the game...Policy change is the way to go in this case," said Simitian.
If it passes, the bill would require retirees to wait 180 days before returning to work.
"If you want to come back that's fine but let's wait six months to make sure it's real, that the retirement is real."
Another exception to the rule: You may remember Monterey County Sheriff Scott Miller told Central Coast News he would freeze his pension, if he was elected sheriff.
But he wasn't required to do that because he took an "elected position." We checked and Miller did give up his pension voluntarily for the time he is sheriff. So, he is not double dipping.
